A strategic plan is one of the most powerful tools nonprofits can develop. Strategic planning can help your nonprofit organization increase impact, reduce internal friction, align stakeholders, and raise more revenue.
In this article, we’ll dive into everything you need to know to ensure your nonprofit’s strategic planning process is a success. We’ll look at:
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.
At Funding for Good, one of our specialties is strategic planning for nonprofit organizations and public agencies. We’ve seen firsthand how 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 an organization’s board and staff are deeply invested.
How nonprofit strategic planning is unique
Nonprofit organizations differ from for-profit businesses in a few ways that affect the strategic planning process
Vision and mission: Nonprofit organizations exist to carry out a vision and mission to make a specific impact externally in the world, and this should drive every aspect of strategic planning and decision-making.
Fundraising: A nonprofit strategic plan presents an inspiring, impact-driven, long-term vision—exactly what donors are looking for when making decisions about their giving. That makes your organization’s strategic plan one of the most powerful tools in your fundraising toolkit. To learn more about how to use your strategic plan to raise more money, check out our article on 5 Ways to Increase Fundraising with a Strategic Plan.
Staff expectations: Nonprofit leaders should think very intentionally about how staff are engaged in and connected to a strategic planning process. Nonprofit staffers often trade higher salaries in the private sector for the chance to contribute to social impact. In exchange, many deeply value the opportunity to be involved in developing vision and strategy—and connecting their daily work to shared goals.
Role of the nonprofit board: The majority of nonprofit boards are non-paying positions. Yet nonprofit boards are responsible for an incredible amount of oversight. 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.
Does My Nonprofit Need a Strategic Plan?
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.
Studies consistently show that organizations with a written plan double their likelihood of success.
In the private sector, research has found that companies with written business plans grow 30% faster (Journal of Management Studies). In the nonprofit sector, research from the Concord Leadership Group shows that organizations with a strategic plan are also more likely to collaborate with partners and more likely to have boards open to taking calculated risks, among other benefits.
Yet according to research, only half of nonprofits have a strategic plan. That means half of nonprofit leaders are operating without a crucial tool that can increase their own and their organization’s success.
The real question nonprofit leaders should be asking is: Can my organization afford to keep operating WITHOUT a strategic plan?
How a strategic plan benefits nonprofit organizations and leaders
Running a nonprofit organization is not easy. Many nonprofits operate on lean budgets. Leaders wear multiple hats. Staff are often overwhelmed, filling multiple roles 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 financial resources and time from staff and board leadership. But research and first-hand experience working with dozens of nonprofits show 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 ultimately saves time and reduces 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.
Increase your impact: A strong strategic plan leaves no doubt about what your organization is trying to accomplish. Combining clear goals with actionable strategies, a well-crafted strategic plan uses research-backed tools to increase your chance of success. By providing measurable benchmarks, a strategic plan also helps 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. This is exactly what a strategic plan provides. In addition to sharing your strategic plan with major funders and partners, your fundraising staff can repurpose it into language for grant proposals, supporter emails, and even your website. 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 determining 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?
How is strategic planning different from other planning?
As a nonprofit leader, it can feel like you’re swimming in plans. There are annual plans, department plans, and project plans. There are mission statements, marketing materials, and grant proposals to review and refine. And that doesn’t even include the individual development plans you craft with direct reports.
But despite all this planning, nonprofit leaders and staff can still end up feeling rudderless.
Strategic planning makes other nonprofit planning EASIER
A strategic plan accomplishes four important things that other plans are simply not designed to do. A nonprofit strategic plan:
- Provides a 3-5-year vision for your nonprofit, including goals, objectives, and benchmarks to evaluate success.
- Articulates an overarching strategy for the organization as a whole. Each program, project, and department within your organization then contributes to these shared goals and strategies.
- Aligns stakeholders on a shared vision for success. This includes your board of directors and staff leadership from every single department.
- Guides decision-making at all levels of the organization.
Once you have a strategic plan in place, then annual plans, project plans, grant proposals, marketing materials, and more should all flow from and be aligned with your strategic plan. This makes all kinds of planning easier, more efficient, and more effective. It reduces internal friction and increases internal focus.
The Nonprofit Strategic Planning Process
Many nonprofits choose to work with a skilled consultant for their strategic planning. This enables board and staff leadership to focus on strategy, rather than running a planning process. As a neutral third party, consultants can also garner unexpected insights from staff and other stakeholders through surveys, one-on-one interviews, and focus groups.
When working with a consultant, a nonprofit 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 your 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. Your team will need to be focused and ready to actively participate in this part of the process.
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.
Key considerations for nonprofit strategic planning
Many nonprofits prefer to work with consultants who specialize in strategic planning FOR nonprofit organizations, rather than for-profit companies. That’s because nonprofits have several unique considerations that should be included in the strategic planning process.
Stakeholder engagement: Nonprofit board and staff at every level are part of your organization because of your mission. This often brings much higher expectations of participation in decision-making processes. Nonprofit leaders launching strategic planning processes should work closely with 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 strategic or business planning should focus on sustainability. When it comes to attracting the best staff and raising the organization’s budget, a strong and sustainable nonprofit is like a magnet. It’s where staff want to work and donors want to invest. This is very different from the private sector, where short-term wins that increase shareholder profits are rewarded.
Fundraising strategy: Fundraising is central to the nonprofit sector, and it should be an important element of your strategic plan. Every single employee’s salary depends on your fundraising team to do their job effectively. Your strategic plan should be designed to be a fundraising tool—one that creates internal clarity and focus, feeds into annual fundraising plans, and inspires donors to give.
Is strategic planning long, expensive, and difficult?
No! Many of us in the sector have experienced the dreaded “never-ending planning process.” But you can prevent this scenario in your organization by selecting the right consultant. Focus on finding consultants who understand the nonprofit sector, are familiar with organizations of your size or growth stage, and are skilled facilitators.
Remember that skilled facilitation is key: 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 nonprofits. Here at Funding for Good, we provide strategic planning services for nonprofits and public agencies.
To help choose the best consultant for your organization, check out our Complete Guide to Strategic Planning Consultants, where we pull back the curtain on approaches to strategic planning and pitfalls to avoid.
