Nonprofit Strategic Planning: Your Complete Guide

by | Jan 23, 2023 | Strategic Planning

Every nonprofit could benefit from a strategic plan. Funders are increasingly asking to see organizations’ strategic plans. Talented staff and potential hires are increasingly eager to work with organizations that have clear and compelling visions. And, as leaders, we’re all looking to increase our organization’s impact.

A nonprofit strategic plan can provide all these benefits and more. In this article, we’ll cover the basics of strategic planning, how nonprofit strategic planning differs from the private sector, and how to make sure your organization’s planning process is successful.

What is a Nonprofit Strategic Plan?

A nonprofit strategic plan is a written roadmap for where an organization is going, how it will get there, and specific ways to determine if the organization has “arrived” at the destination. A strategic plan is the result of a process designed to create a shared vision and strategic alignment across organizational stakeholders.

This last part is especially critical for nonprofit organizations. Strategic planning isn’t solely about the written plan. It’s about building consensus across your board, staff, and other stakeholders, so that your team is focused, driven and ready to increase impact.

The process of strategic planning is designed to create shared vision and strategic alignment across organizational stakeholders.

A written plan can be put on a shelf and forgotten. But it’s nearly impossible to set aside a shared vision for the future when your board and staff are deeply invested.

What is a nonprofit strategic plan? A roadmap for where your organization is going and how it will get there.

Is your nonprofit ready for strategic planning?

How is nonprofit strategic planning different from the private sector?

Though we don’t often think of nonprofits as businesses, they actually are. Nonprofit is a tax status, not a business model.

Even if there’s no profit involved, nonprofit leaders still need to understand how to run a business. This includes balancing income and expenses, managing risk, securing appropriate insurance, bookkeeping and financial controls, ensuring adequate human resources support, managing staff, deciding where to invest and where to pull back, and more.

But nonprofits are also different from for-profit businesses in a few ways that affect the strategic planning process:


Nonprofit vision and mission

Nonprofit organizations exist to carry out a vision and mission to make a specific impact externally in the world. While organizations need to make sure they can afford costs, there is no profit motive and no shareholders to satisfy. Which is why vision and mission should drive every aspect of nonprofit strategic planning.

Read more: What Happens When Nonprofit Business Plans Stray from an Organization’s Mission?


Nonprofit staff motivation and expectations

People generally work in nonprofit organizations because they want to contribute to change. Nonprofit staffers may even trade higher salaries in the private sector. This can mean that staff bring different expectations to working in nonprofit organizations. Staff want to be engaged in decision-making. They want to consistently feel like their work is contributing to a greater good. They want to feel supported in their career growth. All of which means that nonprofit leaders will need to think very intentionally about how staff are engaged in and connected to a strategic planning process.

Read more: Engaging Staff in Strategic Planning


Nonprofit fundraising

Fundraising is one of the most essential functions in any organization. Unlike for-profit businesses, nonprofits generally raise the bulk of their income not from selling products or services, but from individual and institutional donors. This can include grants, major gifts, small dollar donations, endowed gifts, and more. In return for their contribution, donors expect to see an organization make an impact in the world. Which is why strategic planning can be especially helpful for nonprofits, as it spells out an inspiring, impact-driven, long-term vision.

Read more: 5 Ways to Boost Fundraising with a Strategic Plan


Role of the nonprofit board

The majority of nonprofit boards are non-paying positions. Yet nonprofit boards are responsible for over an incredible amount of oversight. This means that, like staff, board members will be attracted by vision and mission. Unlike for-profit boards, which are thinking about shareholders, a nonprofit board is primarily focused on ensuring an organization is able to fulfill its vision and mission. Nonprofit board members should thus be deeply involved in strategic planning.

Read more: What is Nonprofit Governance and Why Does it Matter?

Does My Nonprofit Need a Strategic Plan?

Studies consistently show that organizations with a written plan double their likelihood of success. Yet according to research, only half of nonprofits have a strategic plan. Among those organizations that do have strategic plans, too few actually put them to use.

Investing in a strategic planning process is one of the most important things you can do to boost your organization’s impact and chance of success.

Whether your nonprofit is new or established, growing or struggling, a strategic plan can position your organization to thrive.

Are you ready to build a sustainable, impactful organization?

Why is strategic planning important for nonprofits?

Running a nonprofit organization is not easy. Many nonprofits operate on lean budgets. Leaders wear multiple hats. Staff are often overwhelmed, filling multiple roles in order to meet program deliverables (and secure that next grant). Board members are volunteers, often with their own careers to manage.

Adding strategic planning to the mix can feel overwhelming. Which is why many nonprofit leaders wonder: Is strategic planning worth doing?

Strategic planning does require both financial resources and time from staff and board leadership. But research and first-hand experience working with dozens of nonprofits shows that there are incredible benefits to nonprofit strategic planning.

  • Save time by getting aligned: The strategic planning process brings together board and staff leadership to co-create a vision for your organization’s future. This includes strategic direction, programmatic and financial priorities, and measures for success. Because the process itself is based on consensus building, it creates valuable buy-in—which will ultimately save time and reduce friction.
  • Save money with smarter spending: Your strategic plan will make clear where you need to invest to achieve your 3-5-year goals. This saves you from spending precious resources in non-core areas. And because your plan includes measures of success, you’ll be better able to assess when spending is paying off, and when it isn’t, enabling you to quickly course correct.
  • Get your team invested: Did you know that 95% of employees don’t understand their company’s strategy? At the same time, one of the top things workers find demotivating is “a lack of meaning in their work.” A strategic planning process that engages employees and creates buy-in can transform how staff members feel about their day-to-day work. A strategic plan that employees feel invested in can re-energize your team, break down silos, and increase productivity.
  • Boost your impact: A strong strategic plan leaves no doubt about what your organization is trying to accomplish. Combining ambitious goals with actionable strategies, your plan will be designed to increase your success. For nonprofits, this means increasing both impact and sustainability. By providing clear benchmarks, your plan will also help you better evaluate your progress toward goals—catching challenges before they become costly missteps.
  • Raise more money: Donors want to invest in organizations with a strong vision, a commitment to sustainability, and a focus on creating and measuring impact. Which is exactly what a strategic plan provides. In addition to directly sharing your strategic plan with major contributors, your fundraising staff can repurpose it into language for grant proposals and supporter emails. Quarterly strategic plan progress reports for the board can be quickly transformed into compelling impact reports for donors. A strategic plan is one of the most valuable gifts you can give your development team.
  • Kickstart strategic decision-making: A strategic plan is more than simply a document. It’s a tool that should guide nonprofit board and staff leaders in making strategic decisions. Whether it’s which programs to expand or which to cut, a strategic plan spells out a set of shared values and priorities. So instead of debating major decisions from scratch each time, your team can align more quickly by asking: Which choice will best advance our organization’s stated goals and values?

While it’s easy to think of a nonprofit strategic plan in terms of how much it will cost, strategic planning isn’t simply a line item in a budget. It’s an investment in your organization’s future.

The real question nonprofit leaders should be asking is: Can my organization afford to keep operating WITHOUT a strategic plan?

How is strategic planning different from other planning?

Nonprofit leaders often feel like they’re swimming in plans. At any given moment, we’re either creating, editing or approving annual plans, department plans, and project plans. We hone our mission statements. We work with development or marketing staff to refine proposals and brochures. And that doesn’t even include the individual development plans we craft with our direct reports.

But despite all this planning, leaders and staff can still end up feeling rudderless. That’s a sure sign that you’re spending time on the wrong plans or creating your plans in the wrong order.


Start with a strategic plan

A nonprofit strategic plan is a roadmap for where you’re going—and the types of plans you need to create to get there. Your strategic plan does four important things that other plans are simply not designed to do:

  • Provide a 3-5-year vision for your nonprofit, including goals, objectives and benchmarks to evaluate success.
  • Articulate an overarching strategy for the organization as a whole. Each program, project and department within your organization needs to be contributing to the organization’s overall goals.
  • Align stakeholders on a shared vision for success. This includes your board of directors and staff leadership from every single department.
  • Guide decision-making at all levels of the organization.

Once you have a strategic plan in place, then annual plans, project plans, proposals and more will all flow from that overarching vision.


Annual plan vs strategic plan

Ideally, your annual plans will flow from your strategic plan. A strategic plan covers a 3-5-year period, with a focus on a clear vision and roadmap to get there. In contrast, annual planning is about the nuts and bolts of how you’ll be implementing your strategic plan in a given year, including who is responsible for specific deliverables.

Your annual plans will also go into more depth about the ongoing activities that keep the organization operating, but aren’t necessarily detailed in your strategic plan. Consider bringing the same curious and creative approach you used in the strategic planning process to assess these ongoing functions. Is there a way to handle basics like budgeting and bill payment more effectively and efficiently?

Read more: What is an Annual Plan vs a Strategic Plan?


Project plan vs strategic plan

Where a strategic plan covers vision and strategy for an organization overall, a project plan focuses on goals, objectives, activities, and outcomes for an individual project. The scope of project plans varies significantly. A single project plan could cover anywhere from two weeks to two years, and involve one person or dozens. The key to a successful project plan is making sure that everyone involved in the project understands their individual roles, deliverables, and deadlines.

Once you’ve created your strategic plan, you’ll likely need many project plans as you start implementation. For example, as part of a goal to increase small dollar donations, you’ll need a project plan for your year-end appeal, as well as ongoing donor communications. If you’re organizing events, you’ll certainly need project plans for those. And if you’re executing on organizational changes that will affect staff, such as shifting to a four-day workweek, a project plan will be critical.

Read more: What is a Project Plan vs a Strategic Plan?


Prospectus vs strategic plan

A prospectus is a printed booklet or brochure that serves as a promotional piece. In the nonprofit sector we tend to think of this as a marketing piece. We might call them “one-pagers,” “collateral,” or the “leave behinds” for a donor meeting.

Regardless of the name, a prospectus is the abridged, polished, and outward-facing version of your strategic plan. It’s the kind of language you use on the “about us” or “what we do” pages of your websites.

Ideally, once you have a new strategic plan, you’ll start updating all of these various materials to reflect your organization’s updated vision, direction, and impact goals. Just keep in mind that, where your strategic plan might delve explicitly into internal organizational changes, a prospectus or similar materials will focus on external impact.


The Nonprofit Strategic Planning Process


What are the steps in nonprofit strategic planning?

Many nonprofits choose to work with a consultant for their strategic planning. This enables board and staff leadership to focus on strategy, rather than running a planning process. It’s also especially helpful to have a skilled consultant who can advise on how to best engage staff members. As a neutral third party, consultants can garner unexpected insights from staff and other stakeholders through surveys, one-on-one interviews, and focus groups.

When working with a consultant, your strategic planning process should include at least three steps:

  • Step One: Preparation. This is the getting started phase. Your consultant will create a work plan and timeline, set roles and expectations, gather and analyze stakeholder input, conduct an organizational assessment to identify internal and external challenges and opportunities, and ensure that the organization’s vision and mission are clear.

  • Step Two: Strategic planning sessions or retreat. This is where the real consensus-building work happens. Your strategic planning consultant will facilitate one or more intensive strategy sessions with your board and staff leadership, and any other stakeholders you’ve agreed to include. Make sure your team is focused and ready to actively participate.

  • Step Three: Strategic plan creation. The final stage is where your vision comes together on the page. You’ll work closely with your consultant as they prepare and finalize your written strategic plan. You’ll also want to be proactive about building internal awareness, alignment, and buy-in across your organization. Your consultant can help you develop and implement a thoughtful roll out strategy.

What is unique about the nonprofit strategic planning process?

While nonprofit and for-profit strategic planning may follow a similar process, nonprofits will want to carefully consider a few additional areas:

  • Stakeholder engagement: Nonprofit board and staff at every level are part of your organization not because of money, but because of mission. That often brings much higher expectations of participation in decision-making processes. Nonprofit leaders launching strategic planning processes should work closely with their consultants to make sure staff are engaged at the appropriate level to create authentic buy-in.

  • Sustainability: Where businesses will be thinking more about increasing revenue and decreasing costs, nonprofit financial planning should focus on sustainability. When it comes to attracting the best staff and raising consistent money, a strong and sustainable nonprofit is like a magnet. This is very different from the private sector where short-term wins that boost shareholder profits are rewarded.

  • Fundraising strategy: Fundraising is pretty unique to the nonprofit sector, and it will generally be an important element of your strategic plan. The closest for-profit parallel might be entrepreneurs pitching investors or applying for loans. But unlike business entrepreneurs, nonprofit fundraising never ends. Grants are for one year terms. Some aren’t renewable. Donors have to be asked to give every single year, sometimes multiple times before you land that gift. Fundraising is high-stakes, deadline-driven, and unrelenting. Every single employee’s salary depends on your fundraising team to do their job. So creating a strong and diversified fundraising plan is a must-do.

Is strategic planning long, expensive, and difficult?

No! An effective nonprofit strategic planning process doesn’t have to be painful and drawn out. Though many of us in the sector have experienced the dreaded “never-ending planning process.” You can prevent that scenario from playing out in your organization by selecting the right consultant. Focus on finding consultants who understand your sector, are familiar with organizations of your size or growth stage, and are skilled facilitators.

Because a strategic plan is only as strong as the consensus-building process that creates it.


How do I find a nonprofit strategic planning consultant?

Many strategic planning consultants work with both for-profit and nonprofit organizations. We recommend being sure that your consultant has at least some experience working with organizations like yours.

Read more: Complete Guide to Strategic Planning Consultants

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