Strategic and Business Planning for Nonprofits

Strategic planning for nonprofits

The “new normal” for strategic planning engages the staff and board in defining strategy, committing to measurable goals, approving strategic objectives as well as practical and realistic implementation plans, and on an ongoing basis revisiting the strategies as the organization's internal and external environment changes. For information and assistance with strategic planning, contact your state association of nonprofits.

Why should nonprofit organizations plan? (BoardSource)

At the start-up phase and periodically during the ongoing life-cycle of a nonprofit, boards and staff may want to engage in “business planning” as an exercise to analyzes the anticipated financial support needed to fulfill its strategic  plan and remain sustainable.

Basic information on business plans for nonprofits

• The Nonprofit Business Plan: A Leader's Guide to Creating a Successful Business Model
  by David La Piana, Heather Gowdy, Lester Olmstead-Rose, and Brent Copen
  Turner Publishing (2012)
• Nonprofit Sustainability: Making Strategic Decisions for Financial Viability
  by Jeanne Bell, Jan Masaoka, and Steve Zimmerman
  Jossey-Bass (2010)
• Business Planning for Nonprofits: What It Is and Why It Matters (Bridgespan)
• Elements of a business plan for nonprofit organizations (About.com)
• Should your nonprofit use a business model statement to complement its mission statement? (Blue Avocado)
• Four Elements of Business Plans: (Bridgespan)
  1. Strategic clarity: Developing a concrete description of the impact for which the organization will hold itself accountable over some specified period of time (its intended impact) and the cause-and-effect logic explaining how its work will lead to that impact (its theory of change).
  2. Strategic priorities: Determining what specific actions and activities must take place to achieve the intended impact.
  3. Resource implications: Understanding the resources—financial, human, and organizational—needed to pursue these priorities and mapping out a plan to secure them.
  4. Performance measures: Establishing the quantitative and qualitative milestones.

Nonprofits with a business plan that anticipates potential fluctuations in revenue are generally better able to weather the storms of economic upheaval. The following business planning resources offer strategies nonprofits can use to reduce their susceptibility to the negative impact of economic downturns.

Additionally, some nonprofit business plans address risk management (What if the planned activities fail or the environment changes dramatically? What is your Plan B?)

Business Continuity Planning

Are you ready for the sudden loss of revenues or your nonprofit’s inability to conduct programs because of a weather disaster or other unexpected reason?

• Learn the basics of Business Continuity Planning with this on-line tutorial from the Nonprofit Risk Management Center.
• TechSoup has a great Disaster Planning and Recovery Toolkit on its website with a special focus on technology (think about life without computers!)
• If worse becomes worst, the Nonprofit Risk Management Center offers this Check-List for Winding Down.
• Operating reserves: Where do they come from? How much is needed? The Nonprofits Assistance Fund offers a great primer on operating reserves.
• Operating Reserves Policy Toolkit - The National Center for Charitable Statistics, Center on Nonprofits and Philanthropy at the Urban Institute, and United Way Worldwide offer this toolkit to help nonprofit boards first understand operating reserves, and secondly, craft appropriate written policies about operating reserves for their organizations.

Resources

• Sample business plans for nonprofits (Bridgespan)
• Tools for business planning, creating a theory of change, a case for support, and building a revenue plan (for purchase from Social Velocity)
• What are the benefits of business planning? Business Planning for Nonprofits: The Organizational and Leadership Benefits (Bridgespan 2006)
• Read all about developing a business plan for your nonprofit in this helpful report, Nonprofit Business Plan Development: From Vision, Mission and Values to Implementation (Terri Theissen, Healthcare Georgia Foundation, Publication #24, March 2008).
• Case studies on business planning, including the tough decision that has to be made when a popular program is no longer financially viable CEOs Delve into Business Planning (Bridgestar 2008)
• Basic background on business plans is available from the Free Management Library’s section on Nonprofit Business Planning