The Non-Profit Strategic Planning Process: A Step-by-Step Guide

Nonprofits approach strategic planning in many ways. This blog post provides a basic structure for the strategic planning process. Tailor the process to meet your non-profit’s specific needs.

Preface: What is a Strategic Plan?

A strategic plan is a one that identifies the major milestones an organization must meet in order to achieve its long-term goals. It begins with the organization’s vision, and articulates what must happen over the course of the strategic plan timeline in order to get the organization closer to its goal.

The strategic planning process includes an affirmation of the long-term vision, an evaluation of where the organization currently stands, and an assessment of the gap between the two. The plan document identifies the most important changes that need to be made, outlines strategies to accomplish those changes, and includes the action items that must be completed to succeed. Strong strategic plans also include metrics for performance evaluation.

There are few complete strategic plans that are readily available on the internet. However, the Minnesota Council of Nonprofits Strategic Plan is a good template to use as a reference. It does not include tactical detail or metrics, but is otherwise a strong framework.

Step One: Preparing for Planning

The strategic planning process is most successful when carefully structured in advance.

Evaluate Whether You Are Ready

Before you begin, review the entire process and consider whether your organization is ready to begin. Nonprofit strategic planning should be led by the board, typically with the organizational support of the CEO. If the organization is in the midst of a major transition, the board is dysfunctional, the organization lacks the resources (including time) required to complete the process, or the staff or board is not committed to strategic planning, the organization may want to postpone the process.

Assemble a Task Force

Strategic planning is time-consuming and requires thoughtful deliberation. While the board owns the strategic planning process, and is responsible for ensuring execution once it is complete, the process may be overseen by a task force or committee that includes non-board members as well as board members. In fact, many experienced strategic planning committee chairs and CEOs believe the best task forces include a diverse group of thoughtful leaders.

Outline the Approach

While the approach I recommend in this document is a common one, your approach may differ. For example, this post assumes that the organization has professional staff members. If your organization is 100% volunteer, you may need to tailor the approach to fit your needs.

You should also consider how long each step in the process will take, and map out likely time-frames for information gathering (research), meeting dates, and deliverable deadlines. This will help ensure that the process stays on track.

Envision the Final Document

Finally, it is important to envision in advance what format the final document will take. In general, a shorter document is better. It is easier for readers to understand, and more likely to be completed.

You may choose to have a summary document that outlines key objectives and strategies, but omits activities and/or metrics, for use with some audiences. For example, the Minnesota Council of NonProfits Plan referenced above contains only objectives and strategies.

Step Two:  Envision Your Future

Lewis Carroll once said “if you don’t know where you are going, any road will get you there.” This is absolutely true in strategic planning, where you are creating a plan to reach a long-term goal. It’s also why the strategic planning process begins with the vision statement.

This portion of the process should be completed with the task force, board members and key staff members, if not all staff members.

Affirm or Revise the Vision Statement

A nonprofit’s vision statement describes why the organization exists by articulating the impact the organization will have over the long term. For example, Habitat for Humanity’s vision is “a world where everyone has a decent place to live.”

It should be aspiration and inspirational. It should also be short and memorable.

Unless you don’t have a vision statement, you have already achieved it, or it is poorly worded, you probably won’t be changing your vision statement. However, you should still revisit it and reaffirm it.

If your vision statement does need fine-tuning, check out TopNonProfit.com’s list of 30 Example Vision Statements.

Affirm or Revise the Mission Statement

Your nonprofit’s mission statement describes how you will achieve your vision, but not what you do. For example, the Bill & Melinda Gates Foundation envisions a world in which “all lives have equal value.” Because they are large and diverse, they have several missions. One of these is to “ensure more children and young people survive and thrive.” This is how they will achieve their vision of ensuring all lives have equal value.

Again, your mission should be clear and concise. Most organizations retain their existing mission unless it is poorly worded or outdated.

If you do need help revising your mission, TopNonProfit.com has a list of them, too. You can find it here: 50 Example Mission Statements.

Have you ever heard of the Golden Circle?

It’s a concept described by Simon Sinek, author of Start with Why. He suggests that what makes leaders powerful is how they describe what they do.

The most inspirational and successful leaders, in both for-profits and non-profits, emphasize why they do what they do first. This is the organization’s vision, and it is at the core of what the organization does.

Then they describe how the organization does what it does. This is the organization’s mission.

Finally, they describe what they do. These are the operational activities, such as programs, the organization undertakes.

To hear Simon Sinek describe the approach, click here.

Affirm or Review Your Values Statement

A values statement (or principles statement) outlines the values that underscore any decision you make, from new programs to hiring decisions to whether you partner with another organization. The values statement usually includes three to seven attributes that are critical to achieving your mission.

For example, Fred Hutchinson Cancer Research Center has four key values: scientific excellence, respect, openness, and innovation. Childhaven lists five values: relationships, teamwork, inclusion, compassion and professionalism.

Step Three: Assess Your Current Position

Now that you have affirmed or stated where you want to go and why, it’s time to assess your current position as an organization.

One of the most common tools used to conduct an assessment is the SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Here’s what each of these are:

• Strengths are internal factors that will help the organization achieve its goals.
• Weaknesses are internal factors that are barriers to achieving goals.
• Opportunities are external trends or other factors that will help you achieve goals.
• Threats are external trends or other factors that are barriers to achieving goals.

Internal factors are generally within your control to some extent, such as the strength or weakness of your financial structure, human resources, program reputation, or marketing. External factors are generally outside of your control, but impact your success, such as the legislative environment, demographics, cultural trends, or economic environment.

Internal SWOT Analysis

The first step in assessing your current position is to conduct a SWOT analysis using your internal team members. In some organizations, this is conducted by the Task Force. In others, the initial internal SWOT analysis includes board members and senior staff members.

During this portion of the strategic planning process, the team systematically reviews the organization’s strengths and weaknesses, and discusses opportunities and threats in the marketplace. I strongly recommend inviting experts in your field to provide insight on topics that are of particular importance to the organization’s long-term success. For example, a professional association that provides continuing education may want to bring in an expert (or watch an online video of a speaker) who can speak to the rapidly changing education landscape.

Preliminary Identification of Factors Impacting Success

Once the internal SWOT analysis is complete, the Task Force (or Task Force plus board and staff) will compile a preliminary list of the factors most likely to influence success. Relative to each influencing factor, the group will then ask:

• How much can control do we have over this influencing factor? (For example, the economy might be an influencing factor, but there is little an organization can do to impact it. However, an organization can mitigate risk (and impact outcomes) through its donor profile.)
• How much impact will this influencing factor have on our ability to reach our vision? (There may be several ways to help the organization get to its goals. Which ones will help it the most?)
• How much will it cost to make the impact we want to make? (You do not need exact numbers at this point, just relative amounts. Is it something that is extremely expensive? Or virtually free? Be sure to include both time and financial resource costs.)

At the end of this process, the group will be able to develop a preliminary prioritization of potential factors you will want to influence based on a discussion of control, impact and cost. This discussion will also begin to highlight places you need more information.

External Data Gathering

Many organizations stop after conducting the internal SWOT analysis. However, this is a mistake. Assessments that are exclusively internal often miss important influencing factors that could have an even more significant impact on the organization’s ability to meet its goals.

A strong strategic planning process includes information gathering from beyond the immediate planning group, board, and staff. The task force should identify the major stakeholder groups from whom you will gather information, the types of feedback or input you want from them, and the best ways to approach them.

For example, a nonprofit school might include:

• Students and/or Parents, asking for feedback on their experience through a survey
• Alumni, asking for feedback on their experience as students, alumni and donors through a survey
• Donors, asking for feedback about governance and communications through interviews by phone
• Major donors, asking for feedback about governance and communications through one-on-one meetings
• Heads of peer schools, examining issues and trends in a focus group setting

Many organizations use an external market research firm, like MarketFitz, Inc., to help conduct the research. Other organizations manage the process internally.

This portion of the process is the most time consuming. Comprehensive data gathering efforts can take two to four months, and require a significant time commitment.

Review and Revise Your SWOT

After completing data collection and analysis, update the SWOT analysis performed by the task force, board and staff at the beginning of this step.

As you finish this step of the strategic planning process, a list of high priority strategic objectives has probably already started to emerge.

Step Four: Identify Your Strategic Priorities

You have now identified where you want to be (your vision) and where you are (your SWOT analysis). It is time to look at the gap between the two and identify the objectives that are most likely to move your organization forward toward your goal and the strategies required to achieve those strategic objectives.

The strongest strategic objectives clearly and directly address a factor that influences or impacts the organization’s success. They often include a reference to the influencing factor(s) they address. Strong objectives are also measurable, so that you know when you have succeeded in meeting your goal.

Strategies are what the organization will do in order to achieve the objective. In some cases, the objectives and strategies will be slight variations on one another.

Consider this example of a youth development organization:

Influencing Factor: lack of a stable location in which to provide services negatively impacts the organization’s performance.

Measurable Strategic Objective: Purchase a facility within the next five years.

Strategy: Conduct a capital campaign that will finance the purchase of the facility. (There may also be other strategies related to this particular objective.)

This step of the nonprofit strategic planning process is largely one extensive discussion within your strategic planning task force. At the end, your task force should have a limited set of significant, high-priority objectives and strategies.

Some organizations group objectives by function or program group, such as development, advocacy, or education services. In this case, the group narrows the objectives to the one or two that are most critical to success. Other organizations evaluate objectives across the entire organization. I recommend the latter, as many of the most significant factors influencing success will impact many different parts of the organization.

Step Five: Break the Strategies into Tactics

Many organizations stop the strategic planning process once they have identified objectives and strategies. However, this is one of the key reasons strategic plans fail. (For the others, see this blog post on the topic.) Driving the plan from strategies into tactics ensures that the organization isn’t committing to a scope of work that is beyond what the organization can handle. It also allows the organization to evaluate whether the objective is feasible.

Consider this example:

Vision: Eliminate preventable chronic diseases impacted by food choices.

Objective: Reduce the number of people in Washington State who do not have adequate access to fresh food and vegetables 15% over 5 years.

Strategy: Provide fresh vegetable delivery to ten additional urban food deserts.

From here, the organization should break the plan into broad tactics along with shorter-term, measurable goals. For example, some of the tactics for the example above may include:

Tactic 1: Identify the appropriate food deserts and potential distribution partners by 12/31/17. (Executive Team)

Tactic 2: Expand distribution capacity to be able to serve the 10 locations by 12/31/18. (Operations Team)

Tactic 3: Increase sustainable fundraising by $1 million to cover additional costs by 12/31/18. (Development Team)

Make it Measurable

Note that each tactic is measurable, has a date associated with completion, and is assigned to a team within the organization. Often, it is when the organization drives the consequences of plans to this level of detail that someone in the organization flags a significant problem. For example, if the organization above has a current operating budget of $250,000, the development director might object when he hears that his commitment is to increasing the budget five-fold over two years. On the other hand, if the budget is $100 million, the development director may suggest that the objective be increased to be more ambitious.

This portion of the process is critical, and it is almost invariably handled by the executive director/CEO and his or her staff.

Step Six: Conduct a Reality Check

Once the plan is driven to this level of detail, frame budgets and financial projections to ensure that the organization can handle the financial requirements of the plan. This process is typically managed by the CFO/Controller and/or Treasurer.

Next, evaluate the additional time required of paid and volunteer team members. Another common reason plans fail is that the organization heaped new workload on existing, over-burdened team members. Even if they are initially supportive and enthusiastic, it is important to have discussions about how they will handle new workload, or which other projects might be dropped to accommodate the new strategic priorities.

Finally, the task force should have a conversation about contingencies. In particular, the task force should address major areas of risk, such as funding or external partnerships. For each of these areas, the task force should develop a brief, written plan about what type of action will be taken to address failures, when a decision will be made, and by whom.

The task force should also talk about positive variances. If an unexpected opportunity arises during the period over which the strategic plan extends, how will it be handled?

Once this internal reality check is complete, the plan is ready to be presented to the board for approval.

Step Seven: Board Approval

Six or more months after the strategic planning process launch, the final draft is ready for board review. While the tactical detail may not be appropriate for board review, the task force should present the finalized vision, mission, values, strategic objectives, and strategies. The task force should also explain the portions of the strategic planning process designed to ensure success, such as the tactical detail, financial evaluations, human resource capacity, and risk review.

Expect the board to push back and ask for more information or question whether the objectives are realistic. This is the board’s responsibility, and it is important to address such questions before the plan is put into action.

Once the task force completes required edits, the board approves the plan and it is celebration time!

Congratulations! You have completed your strategic plan. Thank your task force for their hard work, but don’t expect the work to end. In fact, it is just beginning.

Step Eight: Execute and Evaluate

This is when the hard work truly begins. It is the board’s responsibility to monitor execution. I suggest that the task force develop a reporting tool that can be used to provide updates the board.

For many boards, a simple stoplight tool works well. For example, the board is provided a Word document with the objectives and strategies highlighted in green, yellow and red. Green means everything is on target. Yellow means the strategy is behind schedule. Red indicates serious problems. Some boards prefer a dashboard that shows progress against key metrics and activities. For others, the executive director’s written update includes a strategic plan status report.

Regardless of what tool is used, the board should actively monitor progress. If the organization slips off track, the board should evaluate why the problem exists and determine how the variance should be addressed.

Active progress evaluation ensures the plan stays on track. It also improves the board’s planning skills for the next round of strategic planning.

Got Questions?

Reach out. I’m happy to answer questions, if I can. I’ve been facilitating strategic planning processes for 20 years, and participating in them for even longer. I am happy to help.

You can also sign up for my blog. I’ll send you a monthly summary of the articles I write, all of which are related to some aspect of planning for non-profits, including strategic planning.

Finally, please check out other articles on related topics. For example, my first blog post covered the 4 Reasons Non-Profit Strategic Plans Fail (& 8 Steps to Ensure Success). I’ve also written about Game-Changing Macro Trends that nonprofits should consider while planning. I’ll be publishing a new post soon that will talk about how to create an effective strategic planning task force.

Good luck with your strategic planning process!