When one of your board members, funders, or staff members suggests something about strategic planning, you wonder to yourself, “why should we do it?”. This article lays out a number of reasons why organizations that build strategic planning into their operational DNA are more successful than peer organizations.

What am I losing If my Nonprofit doesn’t have a Strategic Plan?

If you’re a leader of a nonprofit without a strategic plan then you’re potentially missing out on a tremendous amount of both funding and opportunities to strengthen your organization.

Over and over we’ve seen how nonprofits with effective strategic plans outperform those that don’t. Among other things, executing a good plan leads to:

• Increased Funding

• Long-term Staff

• Better Board Members

• Focused Programs

• Respect for Your Leadership

As a former executive director and now a nonprofit strategic planning consultant, I’ve experienced and seen other organizations be transformed by doing this work. Let’s go into each of these benefits in more detail. 

Increased Funding

Plain and simple, when you don’t have a strategic plan then you’re losing out on a significant amount of potential funding. 

Strategic planning catalyzes your funding success in these ways:

• As you may know, fundraising is an energy game. If funders feel your team’s passion and excitement about where your organization is going, then your higher positive energy will be more attractive to more and bigger donors. A strategic plan helps your team create greater excitement and energy about your organization’s future. 

• When funders compare your nonprofit to others to see where they want to place their philanthropic dollars, having a strategic plan can help differentiate your organization as one that has its act together. 

• Every single nonprofit strategic plan that I’ve ever seen has had some sort of fund development or revenue component. As such, strategic planning helps catalyze the development of a successful funding strategy.

Here is some data that backs up the fact that strategic planning contributes to funding success. In a survey of nonprofit leaders regarding the links between strategic planning and fundraising, we found that:

• 86% of respondents said that having a strategic plan had a positive impact on generating revenue (grants, appealing to donors, earned income, events, etc.).

• Further, respondents said that, on average, between 36% and 45% of their nonprofit’s annual revenue can be attributed to the presence of a strategic plan. (A sample $500,000 nonprofit would generate a whopping $180,000 and $225,000 more each year with a strategic plan in place.)

• As indicated in the chart below, respondents that regularly reviewed, revised, and measured their strategic plan were over six times (58% vs. 9%) more likely to say that their strategic plan helps their nonprofit generate revenue.

In addition to the numbers, we have several success stories of nonprofits that have benefited financially from their planning work. One example is the Migrant Clinicians Network, whose ongoing strategic work helped give noted philanthropist, MacKenzie Scott, the confidence to provide them with a $5M unrestricted grant, effectively doubling their annual budget. 

Bottom line: creating and implementing a strategic plan provides a fantastic return on your investment. 

(If you ‘d like to learn more about how having a strategic plan will help you raise more funds, check out one of our other blog articles where we go into this topic in more depth.)

Long-term Staff

Not only is your fundraising likely suffering by not having a strategic plan, you’re also potentially losing money due to a higher than necessary staff turnover. 

It’s been estimated that losing an employee costs an organization anywhere between 1.5-2 times a person’s salary. So, when you lose a staff member making $75,0oo/year, you’re also losing somewhere between $112,500 and $150,000 in recruiting, hiring, onboarding, training, and morale costs. That’s money that you’d probably like to spend on programs.

Strategic planning can significantly help reduce staff turnover. Your strategic plan can include priorities and goals around staff culture, performance management, compensation, or any number of topics that will help your staff want to stick around. 

Further, the very act of creating and implementing a strategic plan can increase staff engagement. My friend and colleague, Scott Winter, once said to me, “People support that which they help create.” When you engage your staff in the strategic process, then they become more invested and will be more likely to want to be a part of your nonprofit for the long term. 

One of our customers, the Network of Community Ministries, leverages their strategic plan to celebrate their staff’s achievements. Every six months, strategic planning leaders produce videos explaining the progress they’ve made on their plan. The whole organization gathers to watch the video messages and celebrate their growth. 

In other words, your strategic planning process can help you create an organization with an attractive staff culture where people want to stay. 

Better Board Members

Success attracts success. If you want to attract – and keep – the best board members then having a strategic plan can help significantly. 

Board members typically come from organizations and businesses where the habit of creating and executing a strategic plan are second nature. They’ll bring that same expectation to their service on your board. Often you’ll find that board members are the ones most interested in the strategic planning process. 

I was recently talking to a leader of an organization that went to a “board match” event in an attempt to recruit new people to their board. She said that, without question, the one thing that most of the potential board members were most impressed by was the organization’s strategic plan and her ability to discuss it. 

Focused Programs

If you’re like many nonprofit leaders, you and your team struggle with mission creep. There are so many problems that you’d like to solve and it can be hard to stay focused. 

Of course, when you try to do everything then you may not do anything well. And it makes it harder to tell a clear and coherent story to your funders and stakeholders. 

With a strategic plan you can help you and your team focus on those programs that are your strengths and slowly remove those programs that are distracting and a drain on resources. 

One of our customers, Vida Verde Nature Education, created a simple strategic plan with us during the early years of their organization. In that plan they reinforced their commitment to provide just one program that they could excel at, leading to a transformational impact on those they serve. Further, their singular focus on one program helped them tell an easy-to-understand story to their funders that led them to exceed their fundraising goals year-after-year. It wasn’t until about fifteen years into their existence that they began creating a second program. 

Respect for Your Leadership

As a nonprofit leader it’s possible that you’re experiencing burnout, addressing only the urgent, seeing too many emails in your inbox, and having staff working on disparate projects without clear priorities. That sort of situation can hurt your team’s perspective of your capability as a leader. 

The success of your organization is directly related to the effectiveness of your leadership. And a key element of your effective leadership is being able to capture and communicate a compelling vision and strategy for your organization. A strategic plan is where your vision and strategy lives. The confidence that your staff and board has in your leadership is stronger when they know you have a plan. 

But having a plan isn’t enough. You’ll be able to demonstrate your leadership when you make sure that the plan is well-executed. When you don’t have a plan and process for executing it then you’re losing out on a great opportunity to provide strong leadership to your team. 

Summary

We’re dedicated to helping nonprofit leaders create and execute strategic plans, and we made that choice because we have repeatedly seen how strategic planning can transform the success of a nonprofit and its leaders. To not have a plan – or to have a plan but not use it – guarantees that you’ll miss out on funding and other opportunities that can transform your nonprofit’s impact.

If your nonprofit is ready to create a more significant impact via strategic planning, then Mission Met can help you start your journey. You can learn more about our strategic planning approach and get access to many resources that will help you along the way, or check out some of the services we offer.