Five Anchors of a Nonprofit Strategic Plan
In this article, I outline five anchors to a nonprofit strategic plan. There are many models of strategic planning used by nonprofit consultants. Unfortunately, many of these models are hopelessly genetic, come out of a textbook, and provide little useful management guidance. It is no wonder that so few nonprofit leaders invest the time in developing a written strategic plan.
I have recently updated this article that was originally written a few years ago. It was the outline of a four-session webinar series on strategic planning that I conducted for nonprofit leaders. The ideas remain relevant today. Nonprofit leaders to understand the anchors of an effective strategic planning process. In this article, I wanted to review a framework for developing a strategic plan that references the anchors of effectiveness. More recently, I have written additional articles to expand our thinking about nonprofit planning (see here, and these two article series – on nonprofit investments & courageous nonprofit thinking).
The premise for nonprofit strategic planning is that it is different than planning in for-profit businesses. While sales and profits underscore the bottom line for commercial enterprises. nonprofit organizations are driven by social impact, they work in an increasingly complex and inefficient financial capital market, and they are required to demonstrate, through evaluation, outcomes that are consistent with their mission. These accountabilities are in addition to maintaining financial stability and ideally, a positive margin from year to year. This type of planning requires more than textbook solutions to strategic planning. A true understanding of nonprofits demands a strategic planning process anchored to five practices.
1. Develop a strategic planning approach: Strategic planning does not have to be as complex, and many books, models, and online PowerPoint slide presentations make it out to be. In essence, creating a strategic planning approach boils to developing a team, a timeline, structured process, and jumping into the process. Strategic planning is thinking about where you are today, where you want to be tomorrow and creating a plausible roadmap to get there.
2. Discover where you are today: Strategic planning begins with a clear understanding of the context in which your organization operates. An assessment is taking a systematic look at your nonprofit organization’s internal and external environments to identify themes, data, and trends that may influence your current and future plan. The purpose of the assessment is to create a shared information base that can inform your strategy development. Assessment is concerned with what is the same, what is different, and what is coming at you (trends). Discovering where you are today also means wrestling with the direction of your nonprofit growth. (see here)
3. Build an Impact Model: Elsewhere I have written about social impact and logic models (here & here). I mention it again because it is an critical concept. Every organization must be based on a clear model of how the programs, services, and capacity create change. Start with the compelling need your organization seeks to address, your vision of a different tomorrow, and then fill in the “white space” in between the need and vision. The central question is “What are the organization’s mission, programs and services, operating capacity and outcome measures that create change?” Developing a visual impact model is an anchor for all strategies & priorities associated with your strategic plan. Yet in one annual survey, of nonprofit leaders in the Northwest, less than 10% of survey respondents report having a written theory of change to guide their organization. Indeed, I have argued that understanding your theory of change is a core competency of nonprofit organizations.
4. Create a nonprofit revenue and capital model: In the context of how programs and services are managed over the course of the strategic plan, every organization needs to develop a sustainable revenue model. Balancing, autonomy, reliability, diversity and creating an intentional strategy will increase your chance of building a sustainable revenue and capital model. I have written extensively about nonprofit revenues (see here).
5. Plan for Impact: The final anchor to a strategic plan framework is to build a framework for evaluation and performance. This is where the rubber meets the road. Delivering on a strategic plan is predicated on being able to demonstrate not only your outcomes and impact (more on evaluation: see here & here) but also the degree to which you can build your evaluation capacity and to increasingly develop stronger impact data (see here).
I have followed too many a consultant who has left a nonprofit agency with insipid and mundane strategic plan. More than once, I ask, “Why aren’t you using the same consultant you used last time you invested in planning?” The response I often get includes rolling eyes, a reference to hell freezing over, and then I am handed the last written document. Often, the plan that I am handed is technically correct. It might dutifully include a SWOT analysis, carefully worded SMART goals, and planning milestones. Unfortunately, the document fails to grasp the real world complexity of managing a nonprofit organization and offers a shallow understanding of the anchors that defines nonprofit relevancy and success. Conversely, a deeper understanding and use of the anchors of a nonprofit strategic planning process results in something entirely different. Knowing what makes a nonprofit relevant and successful infuses a planning process with relevant questions and an action-oriented framework. Applying the anchors helps your nonprofit agency discover, dream, design and deliver and ensure that your nonprofit strategic plan is built on a solid foundation.
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The roles that Facilitation & Process can play in helping your nonprofit through strategic planning that of facilitator, content expert, coach, guide, and impartial observer. If you are thinking about strategic planning contact us for a free initial consultation.