Planning drives Social Change

Nonprofit Planning Drives Social Change

Since starting my consulting practice over five years ago, I have had the privilege of working with over forty nonprofit, government and philanthropic agencies. My work has been to partner with organizations to assist them with strategic planning, business planning, board development and other performance improvement initiatives.  I have led, trained, and coached nonprofit leaders and boards, helping them see the value of planning and the “return on investment” that comes from thoughtful and engaged planning. I have said more than once that Nonprofit planning drives social change and an agency that ignores planning lives dangerously.

Enter the Pacific Northwest Nonprofit Survey, a Slide1sample of 1,942 nonprofit organizations from the Northwestern United States.  A descriptive survey, with a substantive overrepresentation from one state, the survey still provides insight into the practices of many nonprofit agencies on our region.  The data that stood out to me the most was a table containing information about how respondents used (or in many cases did not use) formal written plans to guide their work.  The table insert is an adaptation of the table in the report. I had to read it twice.

Wow. Nearly a third of nonprofits don’t have a written annual budget? That number holds true of nonprofits with budgets of over 1 million dollars.  Really?  Nearly 60% of nonprofit agencies don’t have a strategic plan? Over 80% have no business plan? Only one out of ten nonprofits are guided by a theory of change or a logic model?  These are stunning numbers. Add to this discouraging data, the reality that few nonprofits are developing succession plans to manage executive transitions and the profile of nonprofit planning in our region becomes disturbing.  Is it any wonder why the average tenure of executive directors and development staff is less than five years?  Have we unearthed the answer to why large nonprofit institutions periodically end up on the front page of the paper, stalled out, burned out and imploding?  Should it be a mystery that so many nonprofits can’t demonstrate the value they add when they don’t even take the time to document the logic of their existence?  I believe that nonprofits who fail to use written plans to driving social change border on professional malpractice.

Wait. I can hear it now.  The excuse about why we don’t plan. Quoting an unnamed Executive Director, “I have never been a believer in strategic planning. It seems like an outdated notion in today’s world. I focus on is emerging opportunities combined with mission. This happens on a fast timeline with sometimes monthly adjustments. Does it work? It has worked for me.”  Luck works (sometimes) and the conviction in the voice might sound convincing to the board of  directors. However, when that executive director walks out the door for the last time (and the strategy in his head walks out the door too) then the board is left standing there without a strategic plan or a succession plan. At that moment the rationale for not planning will ring hollow.

The economic crisis that has continued to ripple for the last several years was a clear and unprecedented wake up call to the importance of nonprofit planning.  I launched my consulting practice at the time of the downturn and helped many organizations react to the seismic shocks of funding cuts and steep declines in donations caused by scarce dollars being redirected towards basic needs.  In those years, I found that those nonprofit organizations with strategy …written strategy… were better able to adapt.  It is unfortunate that the data in the table above suggests that many nonprofit organizations still live by reacting to crisis and opportunity.  With such a reactive approach to management, mission drift is a real fear and  social change is equally opportunistic rather than deliberate.  My bias, (and admittedly I pay my mortgage from this bias) is that intentional and written strategy in increasingly important to the nonprofit sector.  Let me overview four reasons why nonprofit planning is important.

1.   Planning Builds a Culture of Performance: It is my firm belief that nonprofit organizations, pulled in a million directions, need to be focused as well as disciplined. Written plans are one tool in the pathway to strategy and performance. In short, for nonprofits, what’s written down gets measured and what gets measured gets done. A written strategy is the catalyst for performance and accountability. In my twenty plus years of experience in the social sector, I could not imagine leading without the basic written tools of a strategic and business plan, an annual budget, and staff-driven operational plans.  Staff need the compass of strategy and, without it, morale and performance suffers. Written plans do not mean that strategy is “etched in stone” –never to be adapted or changed– but without such direction, performance is always a moving target. Except in the rarest of cases, nonprofit organizations that rely on intuition and opportunity will, in the long term, underperform nonprofits that spend time planning.

2.   Planning is Increasingly a Funding Expectation: The fact that the M.J. Murdock Charitable Trust asked in the survey about written plans demonstrates the growing expectation among funders that nonprofits invest in planning.  Indeed, if you have ever worked with the most forward thinking foundations in our regions philanthropy community, you already know that the submission of strategic plans, an annual budgets, and logic models, are prerequisites for funding. I have written before about the growing venture mindset of philanthropy that is increasing the demand for thoughtful, proactive strategy on the part of nonprofits. As this trend continues, the 60% of nonprofits without clearly defined strategic plans will be increasingly disadvantaged and marginalized in funding decisions.

3.   Planning is Essential to Good Governance: It is a well accepted benchmark that that “shaping the mission and strategic direction” is a core responsibility of high-performing  nonprofit board of directors (for example see here). While some might argue that shaping the strategic direction can be accomplished without putting the strategy it in writing, the absence of a written plan gives the appearance that the board of directors are driving the car without a GPS system.  I have written before about the link between budgets, strategic plans and accountability and transparency. Here, I will simply reiterate that written plans are indicators of a high performing nonprofit board.

4.   Planning Drives Social Impact: Three other data points in the survey are intriguing to me. On one hand, a high percentage of the nonprofit respondents self-report that they are engaged in program evaluation and also self rank themselves as very effective in accomplishing their mission (average of 8.5 self rating on a score where 10 is greatly accomplishing mission). Yet this self-congratulatory assertion stands in contrast to another data point that only 1 in 10 of these same agencies have a written theory of change or logic model. Let that sink in, a theory of change, and logic model are the foundations of a framework for meaningful evaluation. So the majority of nonprofits in the survey report success despite not even having a framework that success can be measured against?  In the absence of a clear written strategy and a framework for how a nonprofit creates change and social impact, any assertion that a nonprofit is effective must be suspect. Without planning any impact is a matter of random chance.

Taken together, these four attributes define the importance of nonprofit planning. Without a renewed commitment to embedding strategy into formal written plans, the nonprofit sector will continue to struggle to define our importance and relevancy to the communities we serve. Social change must be pursued with deliberation and intentionality.  Successful nonprofits are those who spend the time to plan, act, learn and adapt and are not afraid to put it in writing. May this survey serve as a wake up call the importance of planning and to the importance of strategy and may we, as a sector, learn together how to use planning to drive social change.



Photo Credit: Unsplash



Mark Fulop
Mark founded Facilitation & Process in 2009 to help organizations and communities bridge the gap between where they are today and where they want to be tomorrow. He’s led dozens of Portland nonprofits, government agencies and philanthropic organizations through complex change initiatives including strategic planning, revenue planning, board development, collaboration, and facilitation.