One of the most common questions we get from clients is: Does it matter when we start our strategic planning process?
Our answer is a resounding yes. Let’s dig into why!
Your Strategic Plan in Context
Your organization’s strategic plan does not exist in a vacuum.
To be successful, your plan must be more than just a document on a dusty shelf. That’s why the process should be inclusive and participatory. By the end, your team and key stakeholders should be fully bought into a collective and inspiring vision for the future.
Your strategic planning process also takes place within a pretty complex context that can affect its success. That’s where timing comes in.
Alongside strategic planning, most organizations are also working through:
- Annual budgeting: Regardless of size, every organization needs an annual budget. Budgets follow an organization’s fiscal year, which may or may not align with the calendar year or tax year. The most common fiscal year runs from January to December, aligning with the calendar year. But it’s not uncommon for organizations to have fiscal years that start in June or September. Your annual budget should be informed by your long-term goals, as well as your annual goals.
- Annual planning: An annual budget goes hand-in-hand with an annual plan. Your budget shows how much will be spent in each line item for the next fiscal year. Your annual plan details what exactly those dollars will enable your organization to accomplish. Your annual goals and activities should also align with your long-term goals.
- Quarterly goals and evaluation: Every organization should be evaluating progress toward goals at least quarterly. That means creating quarterly benchmarks as part of your annual planning process and ensuring these benchmarks—both programmatic and individual—align with not just annual goals, but also long-term goals.
- Cash flow and budget management: Whether your organization is a nonprofit or a for-profit, actual revenue and expenses rarely follow your budgets to the dollar. However, major budget revisions (such as adding a new program), are generally done only in extreme circumstances. Effective budget management requires a clear guiding vision along with the ability to adapt strategically to still achieve core goals, even if you experience unexpected increases or decreases in revenue.
Aligning these elements in a way that supports rather than undermines your strategic planning work is key! So, considering these factors, when should you start your strategic planning process?
The Ideal: Align Your Strategic Plan with Your Fiscal Year
Based on our experience conducting strategic planning for scores of nonprofits across the country, we strongly recommend organizations plan their strategic planning process around their fiscal year.
In the ideal scenario, your organization finishes the strategic planning process 1-2 months before starting your annual budget process. This ensures your annual budgets and annual plans align with your strategic plan. It also enables you to put your plan into action as quickly as possible.
Now, this doesn’t mean hiring a strategic planning consultant two months before the end of your fiscal year!
An effective strategic planning process takes time. You will want to budget in:
- 2-4 months for selecting and hiring your strategic planning consultant, especially since the contract may require multiple levels of internal approval.
- 2-4 months for scheduling and preparing to launch the hands-on part of the planning process.
- 2-4 months to complete the strategic planning process.
All told, from the decision to invest in a strategic plan to being ready to implement the strategic plan, you should budget at least 6-12 months. Of course, only 2-4 months of this is the actual planning process. The rest is about planning, preparation, and alignment.
When and How to Get Started (at the Right Time)
What does this all mean for you?
- If you are thinking of undertaking strategic planning, be sure it goes into your budget in advance! If your fiscal year starts in January, that means adding a strategic planning line item to your budget now.
- Start conversations with your top strategic planning consultants early—ideally at the same time you put strategic planning in your next annual budget. For those with fiscal year start dates of January, that means connecting with consultants in October. If your fiscal year starts in July, you’ll want to reach out in March or April.
- When scheduling, work backward from your annual budgeting and planning process. A strategic planning process that wraps up too early leaves you with a long-term plan and vision that may not align with the next several months of your organization’s work. This can make your team and stakeholders frustrated and diminish buy-in. A strategic planning process that wraps up too late means your next annual budget won’t reflect your new, long-range vision. Timing is key!
- Be aware of how your organization works internally and add extra time to the preparation process if needed. For example, will your board want to review the strategic planning scope of work and contract before approving? Are your board and staff members’ schedules packed—meaning getting shared time on the calendar must be done many months in advance? Does your annual budget process tend to be long and painful?
Strategic Planning with Funding for Good
Here at Funding for Good, we love helping nonprofits create visionary and actionable strategic plans. If you’re interested in strategic planning services, you can schedule a free strategic planning consultation with Funding for Good.
