Strategic Decision Making Framework for Nonprofits

by | Dec 13, 2022 | Strategic Planning

There are no shortcuts when it comes to creating a strategic decision making framework for your nonprofit. But luckily there are best practices we can all apply.

At Funding for Good we talk quite a bit about strategic decision making—which we define as a decision making process that is guided by long-term goals and shared values. One of the best tools in your decision making toolbox is your strategic plan.

But what if you don’t have a strategic plan or aren’t sure how to use it for better decision making? That’s where a strategic decision making framework comes into play.


Case Study for a Strategic Decision Making Framework

A New York Times feature about rural hospitals posed a perfect, albeit painful, example of why a strategic decision making framework is so critical. Under the headline, A Rural Hospital’s Excruciating Choice: $3.2 Million a Year or Inpatient Care, the article explores the many factors a rural hospital in Idaho, Cascade Medical Center, is grappling with. As the New York Times explains:

For 46 million Americans, rural hospitals are a lifeline, yet an increasing number of them are closing. The federal government is trying to resuscitate them with a new program that offers a huge infusion of cash to ease their financial strain. But it comes with a bewildering condition: They must end all inpatient care.

… But in rural towns like Cascade, general inpatient services are at the core of the community’s needs.

It’s easy to understand why this particular choice is excruciating. Each rural hospital must now evaluate dozens of factors—from financial viability to community needs—when deciding whether to accept federal aid. And the potential impacts of each choice may not be clear for years to come.

When faced with such a choice, using a strategic decision making framework is essential.


Step 1: Lay Out Your Options

The first step in any decision making process should be to understand your full scope of options.


  • What are the obvious choices? In the case of Cascade Medical Center, there are two immediate choices. They can accept federal aid and eliminate inpatient care. Or they can reject federal aid and keep in patient care, hoping to find another way to balance the budget. For Cascade, however, financial stability is a major issue since it’s already “operating at a loss of around 20 percent for the third year in a row.”


  • What are alternative, less-obvious options? This is where you’ll want to set aside time for brainstorming. Are there any other options besides the most obvious ones? For Cascade, this is particularly challenging as healthcare billing and coverage are generally immutable factors. But when it comes to your organization, you may be able to brainstorm a range of alternatives. For example, say your communications team and development team are both struggling with capacity issues that are affecting outcomes, but you can only afford one hire. You might consider investing instead in consulting support for both teams, with the aim of increasing fundraising in order to hire full-time staff members within the next year.


The key in this step is making sure you spell out all the potential options. This will help you not only evaluate them but prevent you from jumping to whichever solution seems easiest or most obvious in the moment.


Step 2: Assess Impact on Stakeholders and Constituencies

As opposed to for-profit businesses, nonprofit organizations are in the business of generating programmatic or community impact rather than profit. So while you will need to consider the financial implications of each choice for your organization, nonprofit leaders must also weight the impact on their constituencies.

For Cascade Medical Center, the impact on their constituency is significant:

This former lumber mill community is home to less than a thousand people, but the hospital serves patients from across 2,800 square miles; patients travel up to eight hours round trip from homes without addresses.

…Residents are routinely admitted for chronic conditions like congestive heart failure; others need rehabilitation after accidents before they can return to isolated houses to live on their own.

Giving up in-patient care would negatively impact residents’ health. But unless the hospital finds another path to long-term financial sustainability, it may ultimately close. Leaving residents in even worse shape.

As you undertake your own strategic decision making, your second step will be to write down each of your constituencies and stakeholders. Then you’ll want to consider the impact of each choice on each group.

Nonprofit stakeholders and constituencies can vary widely. For example, if you lead a direct service or community-based organization, you’ll want to consider how different choices will affect individuals and families in your community, as well as your community as a whole. If you lead an advocacy or policy organization, you’ll want to consider your specific role in your sector and who relies on your unique expertise.


Step 3: Map Potential Options to Your Vision, Mission, Values and Objectives

This is where you’ll want to pull out your strategic plan. Your plan should articulate your vision, mission, values and objectives. All of which you’ll need to make a final decision.

Start by mapping each choice and its impacts against your organizational mission and objectives. Assess whether each option advances your mission or works against it.

You may find that the first choice you were instinctively drawn to is the best, or you may realize that it undermines your organizational values. The key is taking the time to think beyond the obvious.

Webinar: Engaging Stakeholders to Drive Decision-Making


A Strategic Decision Making Framework Helps You Go Beyond the Obvious

When you tackle hard choices using a strategic decision making framework, the goal is not to pick what seems like the path of least resistance. And it’s certainly not a process that should reinforce pre-determined decisions.

Instead, a strategic decision making framework is designed to help you understand the potential effects—including long-term unintended consequences—of each path.

And there won’t always be one single right choice. It’s about finding the choice that’s right for your organization.

Read more: Strategic Decision-Making: Lessons from California’s High Speed Rail Project

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