Strategic Planning for Nonprofits: Benefits, Best Practices, and Next Steps to Achieve Your Mission

Nonprofits must work tirelessly to achieve their mission with limited resources and time.

Strategic planning is a critical process that guides organizations in defining their direction and developing a roadmap for success. This roadmap helps businesses identify critical actions, prioritize, plan, and achieve essential steps to reach their goals.

This process is vital to achieving the nonprofit’s mission, navigating challenges, and seizing opportunities.

Benefits of Strategic Planning

A Harvard Business Review study found that organizations led by executives who emphasize strategic planning and innovation experience an average annual revenue growth rate 10% higher than organizations that do not.

Strategic planning provides an intentional opportunity for nonprofit leaders to step back and reflect — to understand what success looks like and identify the time, talent, activities, and dollars needed to achieve it. In doing so, nonprofits can benefit from:

Clear Direction and Focus

Defining your mission, vision, and values provides stakeholders and staff members with a shared understanding of the organization’s purpose and long-term goals. This helps establish a clear path forward and aligns team members with a larger strategy.

Improved Resource Allocation

By identifying priorities, strategic planning helps you create a logical list of action items to move forward and allocate resources accordingly. This includes financial resources, human capital, and time, ensuring that efforts concentrate on activities that drive the most impact.

Throughout this process, you may also find performance gaps and opportunities for potential up-skilling to help align talent with your strategic priorities.

Enhanced Organizational Performance

Organizations with a strategic plan are better positioned to measure performance and track progress against their goals. Such planning enables continuous improvement and helps maintain accountability within the organization.

Increased Stakeholder Engagement

In addition to cultivating a shared vision, engaging stakeholders in the strategic planning process fosters ownership and commitment. Board members, staff, volunteers, and donors will feel they play a critical role in the organization's success.

Better Risk Management

A strategic plan helps your nonprofit identify potential risks associated with different initiatives and develop mitigation strategies. By anticipating challenges, organizations can proactively address issues before they become detrimental.

Adaptability and Resilience

Strategic planning encourages you to regularly review and adjust your strategies based on evolving circumstances. This adaptability is crucial for staying relevant and resilient in a dynamic environment.

Strengthened Fundraising Efforts

A well-defined strategic plan can enhance fundraising efforts by demonstrating to potential donors that your organization has a clear vision and a realistic plan for achieving its objectives. This increases donor confidence and willingness to invest.

How to Implement Strategic Planning in Nonprofits

As beneficial as strategic planning is, it doesn’t come without barriers.

According to studies, 60-90% of strategic plans never fully launch.

Many organizations face difficulties because they:

Do not understand the problems they’re trying to solve
Are not fully aware of their organization’s capabilities
Do not account for day-to-day, time-consuming initiatives
Do not obtain adequate buy-in from key players

To alleviate some of these pain points and set your nonprofit up for strategic planning success, begin with the following:

1. Establish a Planning Team

Your planning team should include board members, senior staff, and key stakeholders. This group will actively participate in the strategic planning process, providing their diverse perspectives along the way. Individuals will also serve as champions for the ongoing efforts to maintain momentum and commitment throughout the organization, using the strategic plan as a guide.

Throughout the process of strategic planning, be sure to acknowledge uncertainty. Team members may feel hesitant to dive into new projects because they are unsure of the results. Your planning team should be ready to address pitfalls as they arise and encourage individuals to lean into change with an open mind.

2. Define Mission, Vision, and Values

Clearly articulate your organization’s mission, vision, and core values. The vision outlines the long-term goals, the mission defines the organization’s purpose and activities, and the values guide the behavior and decision-making processes. These foundational elements guide the strategic planning process and ensure alignment with the organization’s purpose.

Nonprofits are often met with an abundance of noise — from stakeholder opinions to community needs. Defining your mission, vision, and values provides helpful context for what your organization should prioritize. If you receive feedback on an initiative or a request to participate in an activity that does not align with these three key areas, you can feel confident putting it on pause or turning it down.

3. Conduct a SWOT Analysis

Analyze your organization's strengths, weaknesses, opportunities, and threats.

Strengths: Understanding strengths, such as skilled staff, strong donor base, or successful programs, will allow you to better leverage them in your strategies.
Weaknesses: Identifying weaknesses, such as fragmented initiatives, outdated systems, conflicting priorities, performance management, or fund development, is crucial for preventing them from hindering progress.
Opportunities: Revealing opportunities, such as new funding sources, emerging community needs, or potential partnerships, helps you strategically position yourself to take advantage of them.
Threats: Uncovering potential threats to the project’s success, such as changes in regulations, economic downturns, or increased competition for funding, enables you to anticipate and address said factors.

With this knowledge, your nonprofit can ensure its strategic initiatives are well-aligned with internal capabilities and the external environment.

4. Set Goals and Objectives

Establish Specific, Measurable, Achievable, Relevant, and Time-delineated (SMART) goals. These goals should include metrics that align with the organization’s mission and provide a clear roadmap for the future.

5. Develop Action Plans

Create detailed action plans outlining the steps needed to achieve each goal. Consider the following:

Identify Actions: Determine what specific actions or changes need to happen.
Assign Responsibility: Decide who will be responsible for carrying out these changes.
Set Timelines: Establish when these changes will occur and how long they will take.
Allocate Resources: Identify what resources, such as funding and staff, are required to implement these changes.
Plan Communication: Specify who needs to be informed and what information they need to know.

Incorporate monitoring of goals into the timeline to encourage accountability.

6. Monitor and Evaluate Progress

Regularly review progress towards achieving your strategic initiatives using the performance metrics identified in the SMART goals. Other evaluation tools, such as surveys and quantitative data, may help assess success and guide necessary adjustments to stay on track.

To keep your board members actively involved, try linking your strategic initiatives to the board meeting agendas. Make a conscious effort to include a brief discussion about the nonprofit’s strategic direction in each meeting.

Next Steps for Nonprofits

Nonprofits that invest in strategic planning are better equipped to navigate challenges, seize opportunities, and make a meaningful impact in their communities.

However, for nonprofits feeling the strain of limited resources, time, and expertise, strategic planning can feel more like a nice-to-have, far-off goal than an organizational imperative.

At Eide Bailly, we know the ins and outs of the nonprofit industry. We’ll provide the knowledge and tools necessary so you can focus on what matters most — serving your community.