Nonprofit Strategic Planning 101: Your Guide

You’re not alone if you find nonprofit strategic planning confusing. You may wonder how to strategic planning it well. That’s why you will find this nonprofit strategic planning guide valuable. It’s crafted to blow fluff away and clear the clutter around your nonprofit strategy and strategic planning.

You can use it to guide a nonprofit’s strategic planning process. If you follow this guide, your strategic plan won’t sit on a shelf and collect dust. Instead, you can create a nonprofit strategic plan that becomes ragged from use. You and your supporters’ will return to it constantly to move your nonprofit onward and upward.   

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Nonprofit Strategy Planning 101 Contents

• What is a Nonprofit Strategic Plan?
• How Will You Know That You Created a Successful Nonprofit Strategy? 
• When Is It Time to Develop a Strategy for Your Nonprofit?
• Why is the Strategic Planning Process Especially Valuable for the New CEO?
• Whom Should You Invite to Participate in a Strategic Planning Process?
• Who Selects Your Nonprofit’s Strategy?
• What Happens in a Nonprofit Strategy Selection Session?
• Watch Out: The Biggest Nonprofit Strategic Planning Hazard
• What Tools Do You Recommend to Monitor Implementation?

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What is a Nonprofit Strategic Plan?

Your nonprofit strategic plan is a customized-designed master plan that lays out how you grow your revenue and supporters and achieve more mission results. A nonprofit strategic plan includes two parts:

•  the strategy and
• a document that outlines how you will use your strategy, AKA the strategic plan.

Your strategic plan includes objectives, the results you seek, and how you will achieve and measure them. 

The objectives are what you hope to achieve. Some people prefer to label these goals. For example, you select one goal to grow your members, donors, and volunteers.

Key results reflect what success looks like and how you will measure it. You might decide that the outcome you seek is to increase your membership by 100 percent over three years.

Methods are the tactics you will use to achieve your objectives and the success you plan to measure. They are the “hows.” You might improve your membership packages by adding “insider benefits.” Your “hows” are your methods. 

How Will You Know That You Created a Successful Nonprofit Strategic Planning Process?

Your process is how you create your strategic plan, the steps you will take, the order in which you will take them, and who will be involved. Knowing what you want and what’s possible will motivate you and others to develop a strategy and strategic plan. So, this section lists the success criteria of a top-notch nonprofit strategy process.  

• Using your strategic plan, you can see how it will increase your resources, supporters, and revenue.
• The strategic plan outlines specific ways you will sustain and grow your revenue.
• Your stakeholders (board, staff, active members, funders) embrace the strategy.
• The plan identifies staffing needs and board growth activities and pinpoints critical performance indicators.
• The plan incorporates realistic, concrete, and ambitious approaches that uplift your nonprofit. (Anyone reading the plan will believe you can do it, but it will be a stretch.)
• You use the plan immediately. You start the programs and enhance current activities before the plan becomes “official” because the process energizes you, and the next steps are clear.

Ultimately, your nonprofit strategic planning works if you and your nonprofit emerge stronger from the process. And your goals as leaders are met. “Before the strategy retreat, board members were emailing, calling, and texting me—even on the weekends. After the event, that stopped. The board now knows its job. They understand it includes fiduciary responsibilities. It’s not only about showing up at meetings or micromanaging the staff.” (Sarah Pallone, Executive Director, Highland County Habitat for Humanity

How Will You Know That You Created a Successful Nonprofit Strategy? 

Successful strategies provide the framework for overcoming the critical roadblocks that restrict your nonprofit’s three bottom lines: growing supporters, generating revenue, and growing mission.

How can you test this? Your board and even strangers on the street agree that your strategy has the potential to succeed. The strategy is logical, solves multiple challenges, and is forward-looking. 

Successful nonprofit strategies: 

1) Outlines How You Will Win

Successful strategies provide the framework for overcoming the critical roadblocks that restrict your nonprofit’s three bottom lines: growing supporters, generating revenue, and growing mission. How can you test this? Your board and even strangers on the street agree that your strategy has the potential to succeed. The strategy is logical, solves multiple challenges, and is forward-looking. 

2) Is Clear, Succinct, and Gets Used a Lot  

Successful strategies get used every day. You want the front-desk volunteer to understand the larger framework of what you’re doing so she can prioritize her task when the front desk gets busy. Likewise, dynamic strategies become a sieve to prioritize work, make decisions, and measure progress. Therefore, you’ve created a great strategy when you can explain it in a tweet-length sentence that a newcomer finds easy to grasp and repeat. Over time effective strategies generate “earworms.” People ask, “Which option reflects our strategy?” 

3) Long-Term Potential

 Your strategic plan–the planning document that lists your strategy goals, methods, and dashboards might get completed (you used all the methods), or the plan might need to be revised as the market condition change. Still, you might recycle your strategy if the approach continues to provide wins, growing supporters, revenue, and mission results. Super-successful strategies get used for decades because they still guide nonprofit organizations to more and more success. Even if you need a new strategy every few years, a successful strategy has heft and uniquely fits you and your situation.

Test Your Understanding of the Nonprofit Strategy

“Strategy” is one of those words. It’s used frequently and imprecisely in the sector. Even people active in strategy work misuse it. Watch for the word. Whether you hear or read it, the odds are greater than 50 percent that the term will be misused.

Here are four quotations from recent articles that mention strategy. Which of the four quotes uses the word correctly?

1. “In their strategy, nonprofits must acknowledge the hardships that people are experiencing and then make fundraising asks from a place of empathy.”
2. “A nonprofit executive leading in times of uncertainty ramps up their stakeholder engagement strategy, providing empathy and selfless help to all around them, while cutting both their burn rate and all nonessential business activities.”
3. “In short, the transition strategy is the best available. “The market is winding down the coal industry, and these workers are going to need jobs to support their families. We can provide good-paying jobs to these skilled workers while restoring the land to productive use . . .”
4. “Needless to say, in reimagining your organization, you’ll need to determine how much it will cost to do what you want, and you’ll need to develop an intentional revenue strategy.”

Answer

If you guessed three and four, you’re correct. Congratulations!

In number one, the word tactic or technique would be a better word choice. In number two, the sentence would be more precise without the word. Stakeholder engagement is a tactic. The third and fourth correctly reflect an overall game plan to win.

Four Challenges Caused by Using Strategy Incorrectly

Why does misusing the word strategy matter? When you or others misuse it, your nonprofit risks:

• Looking unprofessional
• Failing to generate the masterplan to needs to win
• Confusing donors (When donors get confused, they don’t give.)

Learn more about mistakes nonprofits make talking by watching this video.

When Is It Time to Develop a Strategy for Your Nonprofit?

Many nonprofits embark on strategic planning on a routine basis creating a new strategy every two or three years. Others plan only when someone, usually a grant funder or donor, requests it.

But when do you really need a new strategy? 

• Still provide a masterplan to win,
• It remains easy to understand,
• It helps you to decide on priorities and tough choices.

If your current strategy meets these criteria, you need a new strategic plan, not a new strategy.

Successful nonprofits preserve the same strategy for years to build momentum and simplify operations.

For example, while I wrote 7 Nonprofit Income Streams, I interviewed Kumar Mahadevan near the end of his 35-year tenure. Under his leadership, Mote Marine Laboratory grew from a small research lab into a major institution.

One secret of Mote’s success under his leadership was their financial strategy. In the late 1970s, Mote’s leaders realized that Mote needed to obtain individual donations from the community to fund research- the Laboratory’s mission. This realization became the financial strategy of Mote for decades.

In the 1970s, Mote began youth programs using this community donation strategy. They developed science education resources and summer camps for local children. In the 1980s, Mote added an aquarium. This facility provided over one million dollars in operating support and 352,000 visitors. Later, using the same master plan, Mote added limited-time exhibits to the aquarium, including visits with penguins and sea lions. While the programs, aquariums, and special exhibits look like mission-earned revenue enterprises, their strategic function is to create and renew relationships with local donors.

Mote’s example brings us back to your strategy. You need a new strategy when your current isn’t helping you win, can’t be rapidly understood, and fails to help with decisions.

When Is the BEST Time to Begin the Strategic Planning Process?

When should you start? Here are three ideal times to begin strategic planning:

1. Now, if Your Strategy’s Ineffective 

Running an organization without an effective strategy is like randomly walking thru Chicago O’Hare Airport, looking for your gate without checking which concourse and gate you need. You might miss your flight, and you miss a lot of opportunities to do flight prep. If you lack an effective strategy, create one now.

You might need a new strategic plan even if you just created one.

You might even need to create a strategy if you just completed one. A new nonprofit arts organization CEO called. His predecessor invested in a strategic planning process as his final act.

The result was a list of platitudes applicable to any organization. The strategy wasn’t helpful for decision-making. It failed to outline how the organization would win, and everyone was confused about what to do next.

Even though the board fussed at the expense, the CEO invested in creating a master plan. To make an effort acceptable, we gave the process a new name, added some missing elements,  and built on the previous work. Our new strategy empowered the nonprofit to double its revenue in two years more than making the time and resource investment a bargain. 

2. Four  to Six Months Before the Plan for Your Current Strategy “Runs Out.”

Whether you engage in a complete strategic planning process or an update, start the process four months before your current implementation plan ends. You will not need all this time. (You can complete a valuable process in a day! (Chat with me about how this might work for you.) Ninety days is ideal for letting ideas sprout, take root, and blossom.

Just as leaving early for the airport reduces stress in traffic and security line delays, starting four or even six months out promotes thoughtfulness, flexibility, and less stress. Four months provides a chance to clear the decks and deal with naysayers. (Watch: Nonprofit Strategy for Strategic Planning Haters.) It includes time for lots of stakeholders to engage. You can have it ready to implement before your old plan expires.

3. When Your Stuck, Confused, or Experiencing Struggles

At times, instead of moving forward, nonprofits get stuck. Even if your strategy is sound and implementation tasks remain undone, the strategic planning process asks questions that help you to blow up roadblocks and find clarity. At its heart, the strategic planning process is about listening to many different voices to hear the underlying music. The experience can clarify if conflicting visions exist or if the disagreement is about tactics. The process can identify missing steps and move you from stuck to flow and compromises that give everyone something they want that is greater than the sum of everyone’s wish list. 

Why Is the Strategic Planning Process Especially Valuable for New CEOs?

First off, you’re new. Strategic planning when you start is brilliant. So it’s never your fault, but it is about to be your problem.

The process allows the new CEO to:

• Connect with stakeholders
• Reveal what’s in the shadows
• Collect the insights needed to lead
• Weave old ways of thinkings with your way of doing.

Who Should You Invite to Participate in a Strategic Planning Process?

Okay, you decided your organization needs a new or updated strategic plan. Whom might you invite to contribute to it? As many people as possible!

The following groups of people will help you to identify prospects you might want to include in your strategic planning process. They can share perspectives, insights, and clarity about your community’s role and opportunities.  

1. The Usual Suspects

The usual suspects include your board members, major donors, founders, staff, volunteers, and customers.

2. Your Nonprofits Friends and Partners

Leaders from other entities can provide insights, recommendations, and trend updates. Consider asking individuals from these organizations to participate:

• Friends of your organization and people in your network
• Individuals from organizations to whom you send or receive customers
• Trusted partners in cooperative endeavors, for example, a partner from a joint grant project
• Representatives of your state, province, or national industry association
• Past and current vendors such as bankers, CPAs, and graphic artists, especially if they service multiple nonprofits.

3. Past Friends and Prospects

Look back and forward in time to identify other individuals to invite. Consider including people with who you’d like to refresh a relationship or build a stronger connection. Looking back, you reach out to retired and former leaders, including directors and board members. Looking forward, you contact prospective board members, donors, and funders. For example, one client reached out to a former Ford Foundation executive to gain insight into the Foundation’s perspective on needs in the nonprofit’s focus area.

As you’ve already realized, this is a lot of people!

Why is engaging a lot of people worth the effort? According to Scientific American, “by asking someone to share his or her personal wisdom, advice seekers stroke the advisor’s ego and can gain valuable insights.” Your organization will receive ideas, buy-in, positive branding, and an understanding of how others see your nonprofit. Most importantly, you gain clarity about your options on how your nonprofit might win and wisdom to insert into your strategy and implementation plans. Moreover, people invited to participate have more buy-in in the outcome. Plus, there is the nonprofit adage, “Ask for money, get advice. Ask for advice, get money.” 

Does this mean that everyone I ask has to participate the same way?

No. You have lots of options on how to engage people. Some individuals might receive a telephone call, others an invitation to join a focus group, and still, others fill out a survey about specific questions. You can ask others to review draft documents or send them an email or text asking for information on a method or measurement to use. Failing to cast a wide net is one of the seven common mistakes that nonprofits make when they undertake strategic planning. For more about this error, watch Failing to Cast a Wide Net. 

Who Selects Your Nonprofit’s Strategy?

During the community listening phase of your nonprofit strategic planning process, you’ll ask many people to participate in your work. You don’t, however, need or want a crowd to pick your strategy. For this activity, you need your top leaders, especially those with strategic thinking skills.

Your board is the most logical group to select your strategy. However, another option is a task force comprised of community, staff, and board members. For community efforts, consider creating a streaming committee comprised of leaders with a stake in the outcome, connections to help with the plan’s implementation, and analytical thinking skills to guide the effort and decide on the strategy. Your invitation list for a steering committee will include business, civic, foundation, nonprofit, and government representatives.

What Happens in a Nonprofit Strategy Selection Session?

You’ve gathered the stakeholders to meet and select your strategy after listening, organizing, and analyzing all you’ve heard and discussed during your strategic planning process. What work can you accomplish in your nonprofit strategy selection session?

Karen’s Six Tasks to Manage at Your Nonprofit Strategy Session

Here are the six recommended steps I include in nonprofit strategy selection sessions:  

1. A Review of Your Mission, Vision, and Values

You’ve been busy listening to the community. Summarize the highlights of your discoveries. Your leaders will be eager to know what you learned and your key takeaways.

2. What You Learned Listening to the Community

You’ve been busy listening to the community. Summarize the highlights of your discoveries. Your leaders will be eager to know what you learned and your key takeaways.

3. Present Strategy Options 

Present the collection of five to seven strategy options. Each option represents distinct choices. One way to think of these strategy options is like different directions on a compass. All possibilities should fulfill your mission, move you toward your vision, and allow you to win–that is, be feasible and distinct. For instance, expanding services in another city differs from adding a new line of service to your current offerings. While both require you to add staff, the new town will usually require finding an office location and finding new customers. Adding a new service, say adding weekend hours for childcare, may allow you to continue to serve your current customers (parents who have weekend hours) in your current location.  

4. Establish Evaluation Criteria

The options you present will generate discussions of which options are best. Before your leaders dig in, you want to establish your criteria for comparing options so that all your musts are met and as many as possible of your wants get covered.

5. Evaluate the Options and Select Your Strategy 

You will ask the group to evaluate the strategic options using the criteria you established together. During this step, nonprofit leaders often discover ways to merge choices that maximize the benefits and result in a unique and customized strategy. While this step seems complicated from the outside, in well-executed strategic planning processes, the best strategy is often apparent, and leaders unite around it.  

6. Assign the Next Steps 

Before closing the strategy decision session, the leader’s breakout is to draft some initial goals and methods for the strategic planning document. The leaders are assigned teams to support the development of a strategic plan. 

Karen’s Six Steps focus on selecting a strategy. Of course, you’ll incorporate a welcome, introductions, relationship-building opportunities, breaks, and gratitude for the hard work that’s been done and will be done in your session.

Hazard Warning: The Biggest Nonprofit Strategic Planning Hazard

Failure to Solve the Key Roadblock

A client called me to partner with their organization to create a strategy. The underlying driver for the process was underfunding—as is often the case.

As we worked together during the community listening phase of the strategy work, I frequently heard how previous funding efforts failed. While everyone desperately wanted to solve the challenge, they were more fond of obsessing about what didn’t work instead of brainstorming solutions.

Over time, by directing their conversations, the leaders understood that they had successfully discovered hundreds of ways that didn’t work–like Edison and the light bulb. Since they were determined to succeed, we built on these lessons. Using techniques I pioneered, we generated new strategic options. These approaches, the addition of a solving mindset, and work changed their organization’s revenue trajectory and increased revenue threefold in less than five years.

If you leave your strategy selection session with a clear direction to solve your critical roadblock, you’ve succeeded. If not, you created a strategy that will collect dust bunnies and breed cynicism among your supporters about future strategy efforts. 

Trash strategic options that fail to solve your challenges and that you believe won’t work. Better yet, run your proposed strategy through the following three tests before you leave your strategy decision session.

1) Will we win with this strategy?

Your strategy outlines how you will achieve your goals, stand out from your competitors, and gain financial independence.

2) Is it succinct?

The strategy you create will have many nuances. Still, to make it work for you and your supporters, the essence of your strategy needs to be a word, phrase, or at  the most, a short sentence, such as “make art more accessible to more citizens” or “help people build houses they can buy,” or “negotiate with lenders to reduce medical debt and pay them off.”

3) Is it an earworm, that is, can we imagine using it to make decisions?

Boards, staff, and supporters use dynamic strategies daily to make decisions. The strategy needs to be brief, memorable, and actionable; that is an earworm that sticks with you as you work.

For more, watch: Not Solving the Nonprofit’s Key Roadblock.

What Tools Do You Recommend to Monitor Implementation?

Here are the two approaches I recommend to clients:

Approach 1: Take Some Time to Think about It 

1. Print out the strategy tool collection from the Bridgespan Group.
2. Cross out columns and eliminate pages you don’t need. The leftover is your draft template.
3. Sign up for Cascade Strategy (top reviews, reasonable price—maybe free, reviews “geared for nonprofits”) 

 Import your strategic plan. Pick and choose between your Bridgespan templates and what Cascade offers to create your documents. 

OR

Approach 2: Get it Done ASAP

Sign up for Cascade and use the Bridgespan Group tools as a backup. 

If you want to know even more about nonprofit strategy, please don’t hesitate to reach out. I’d love to help you create a dynamic approach to help your nonprofit thrive. Schedule a time for a discovery chat here. -Karen