This document provides a guide for assessing monitoring and evaluation (M&E) resources and capacity for initiatives. It outlines a 4-step process for initiatives to: 1) assess financial resources for M&E; 2) assess human resource needs and capacity; 3) assess physical resources; and 4) reflect on implications for M&E system design. Worksheets are provided to inventory available budgets, technical skills, and physical assets to identify gaps and guide the M&E system design process. Common pitfalls discussed include not properly scoping M&E plans based on available resources and capacity. The guide emphasizes the importance of a thorough resource assessment to develop an appropriate and realistic M&E system.