Non-Profit Strategic Planning with a For-Profit Mindset

By Carolyn Rammel

In the for-profit world, much of an organization’s success is tied to producing a solid return on the investments of its shareholders and continuously increasing shareholder and enterprise value. For most non-profit organizations, this concept of return on investment (ROI), or shareholder/enterprise value, gets ignored. While it is true non-profit organizations do not have traditional “shareholders,” they do have investors. And these investors are looking to understand the impact (return) their investments are making.

But before an organization can report on an investor or funder’s return, it must first determine for itself the impact its mission and work is looking to create. Until this is clearly articulated, an organization cannot measure and monitor its success and ROI. So, how can non-profits incorporate this performance and measurement based mindset? For most it will start with a strategic planning initiative.

During the strategic planning process, the mission is affirmed and adjusted and the impact of that mission is clearly defined. Determining how the organization will assess its performance against those impact goals comes next. And it is this assessment practice, as defined by the non-profit, (not its funders), that establishes a true culture of performing to outcomes and knowing if one is on or off track in achieving the mission.

Not all non-profits find it easy to shift from a purely mission-aligned strategy to one based on impact and outcomes. What is the actual financial impact of putting someone in a home of his or her own? It’s incalculable. Yet, even when impact is difficult to measure in a quantifiable way, the idea of managing to an outcome or managing to a specific action in and of itself, still counts.

Having an external consultant facilitate this process is very helpful because initially, managing to outcomes is scary. The right consulting partner preserves an atmosphere of safety and trust while simultaneously revealing exciting possibilities. As seasoned strategic planning partners we help non-profits think deeply about their mission. We help design a pathway for achieving that mission, and set up management approaches to support the collection of data to channel into quantitative claims that not only satisfy funders, but ensure organizations have a clear method for understanding whether they are achieving their mission.

Once an organization reaches the end of this process, its leaders have immense confidence and clarity. They develop a culture of alignment because everyone knows what they are doing, why they are doing it, and just how well they are doing it. And it is in this moment of clarity and alignment that outcomes and ROI become benchmarks of success rather than merely data points.

About the author: Carolyn Rammel is a seasoned executive and consultant with 30 years of experience in the financial services, travel management, non-profit and consulting services industries. She has held leadership roles in marketing and product management, executed numerous international joint venture initiatives, and served as executive director of a Philadelphia based non-profit organization. As a consultant she specializes in the areas of strategic planning, facilitation, governance and leadership alignment, while teaching an executive global leadership program in locations around the world.

How can our nonprofit address a new need without mission creep?

By Stephanie Taylor

As nonprofit professionals, it’s in our nature to help as many people as possible. When we see a new opportunity to expand services and improve the lives of more people, it’s difficult not to jump right in and set a plan into action. That’s particularly true when there’s new money available for services and your organization wants a piece of the pie.

But expanding without careful planning is a time-tested recipe for mission creep. A nonprofit with the purest intentions can suddenly find its mission diluted, its staff in over their heads, and its clients and donors upset or even angry. Fortunately, there are guiding principles and questions a nonprofit can use to ensure that a new direction is the right one.

The first question a nonprofit considering a new service should ask itself is, “Is anyone already doing this really well?” Take a look at your target population and see if there is an organization successfully providing the service you’re considering.

If that's the case, serious thought should be given to a partnership proposal. The other organization has already done the heavy work of laying an operational foundation, and can tell you what assets your organization has that would be of value. For example, an organization committed to supporting youth entrepreneurial efforts might benefit most from another nonprofit’s relationships with schools in the area.

By working together, both organizations can stay within their wheelhouse, while expanding services to new areas without encountering the perils and pitfalls of mission creep.

If the answer to the prior question is no, and there isn’t an organization already devoted to the effort under consideration, it doesn’t automatically follow that your nonprofit should be the one to lead the charge. It’s at this point that it becomes instrumental to refer back to your strategic plan, and carefully consider whether the program or opportunity fits within your nonprofit’s mission.

There’s nothing wrong with an organization evolving with the times — in fact, it’s a necessity for survival — but it must be done strategically. Providing new services should be a decision made by the board, which can consider the implications thoroughly. If the board determines the new opportunity is truly necessary in changing times, it can alter the strategic plan, put other projects on the back burner, and free up the resources needed to launch successfully in this new direction.

Seeking the board’s approval and an alteration of the strategic plan also helps guard against the slippery slope of mission creep. If it takes leadership-level consideration to add new services, it will be difficult for departments to slide too far down the mountain until somebody notices. Without this safety net, the impact of your current programs could get watered down, your staff stretched too thin, and you might be viewed as an organization lacking a clear direction or commitment.

By following this process, your organization’s employees not only will know they have the resources and approval to add new services, but donors and clients will be assured that their stakes are in good hands.

About the author: Stephanie Taylor has spent 15 years in the nonprofit sector working in almost every capacity, from program delivery to operations. She specializes in leadership, change management, and nonprofit operations, and holds an MBA in Nonprofit Management from Eastern University.

Does a change in nonprofit leadership require a new strategic plan?

By Carolyn Rammel

There are few things in the nonprofit sector that induce as much anxiety as a change in leadership. Whether it's an executive director or an influential board member leaving an organization, that individual holds influence that will leave a vacuum after departure.

While the shift may and often should prompt some soul-searching within your organization, there's no reason a leadership change in and of itself must change your strategic plan.

By design, a good strategic plan will be created through contributions from more than one individual. If created correctly, a plan collaboratively combines the ideas, perspectives and recommendations from various stakeholders. From volunteers to board members, staff members to external constituents, all voices carry the same weight. It is a leader's responsibility to execute the strategic plan, not to dictate the plan.

However, a change in leadership does present a great opportunity to revisit the strategic plan and ensure it is still functional and in line with the mission and organizational goals. Of particular importance is determining that the plan's design was not the reason for the prior director's departure, and that new leadership can still reasonably execute it.

Even if you determine the plan was created with input from stakeholders at all levels and is still executable, it may be time to revise. Strategic plans should be updated every three to five years, regardless of changes in leadership.

If your strategic plan passes review and does not require updating, it can actually be the best tool for weathering the stresses of change. As the plan is intended to be the guiding document of your organization, the individuals leading that strategic direction will be secondary to the plan itself. Even more, a completed strategic plan will offer clarity of direction for any incoming leadership.

About the author: Carolyn Rammel is a seasoned executive and consultant, with 25 years of experience in the financial services, travel management, not-for-profit and consulting services industries. She has executed numerous business, marketing and international joint venture initiatives in the corporate marketplace, and more recently served as the executive director of a Philadelphia nonprofit organization. As a consultant, she specializes in the areas of strategic planning, facilitation and leadership alignment.

What does strategic planning mean for a nonprofit organization?

By Stephanie Taylor

We've all been there before; we buy a bicycle or dollhouse or piece of IKEA furniture, and shrug off the big, bold "ASSEMBLY REQUIRED" warning. Things go well enough for the first few minutes, but suddenly one of the parts doesn't fit. Then, you realize another is sticking out at a weird angle. Before long comes the defeated sigh. Where the heck are the directions?

Similar things happen, with predictable results, when a nonprofit organization tackles the challenges that arise each day without the "directions" provided by a strategic plan. In addition to setting the direction of the organization, a strategic plan determines the best strategies for an organization to fulfill its mission and ensures there is a concerted effort from all employees to reach clearly defined goals.

A strategic plan for a nonprofit usually is developed by the organization's board or executive leadership, often in partnership with an outside consultant, who can provide an unbiased perspective. Typically, the consultant begins by conducting a SWOT analysis to ascertain the organization's Strengths, Weaknesses, Opportunities, and Threats.

To prepare the analysis, the consultant performs an environmental assessment, which involves anonymous polling and interviewing of the board, staff, stakeholders, volunteers, and the public about their perceptions of the organization. The consultant also does quantitative analysis to determine the financial health and outlook of the nonprofit, particularly in comparison to competitors.

Using this objective knowledge, a nonprofit will typically create a 3-5 year strategic plan. This leaves time enough to achieve stated goals, and guides the organizations’ responses to inevitable internal and external changes.

A strategic plan provides both internal and external benefits. Internally, it enables the nonprofit's governing body to coalesce around a few areas of focus, and informs key decisions, such as whether or not to diversify the funding pool, expand or add programs, or establish an endowment. Externally, it communicates to supporters that the leaders have well-defined goals and are united behind a strategy to reach them.

Strategic planning can benefit every nonprofit organization, regardless of age or size. A start-up will require a strategic plan to achieve financial sustainability in the tenuous first few years. Experienced organizations also need one to ensure they stay on track for continued success.

Strategic plans are most useful when they are preemptive, not reactive. The time to develop one is before your organization reaches a fork in the road, not after you've already set off down the wrong path.

About the author: Stephanie Taylor has spent 15 years in the nonprofit sector working in almost every capacity, from program delivery to operations. She specializes in leadership, change management, and nonprofit operations, and holds an MBA in Nonprofit Management from Eastern University.