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.