A nonprofit is not a business. However, that doesn’t necessarily mean it shouldn’t operate like one—especially when it comes to developing a strategy. Entrepreneurs in the business world go to great lengths to develop a strategy that will set them up for success. Unfortunately, many nonprofit leaders never take the time to develop a strategy at the beginning. For some, they simply saw a need and started doing things to meet it. For others, they were so overcome with the potential impact that they never took the time to identify and include each essential element of a successful strategy.
Whether you’re just starting out or you’re re-evaluating your nonprofit’s strategy, it’s important to understand each aspect of a successful strategy and how they work together in your nonprofit’s overall strategic agenda.
9 Foundational Elements of Your Nonprofit’s Strategy
Here are nine elements every potential (or current) nonprofit should include in its strategy for the future:
- Mission Statement: Ideally, a mission statement reveals who the organization is serving, the broad problem or need it is addressing, and the societal contribution it desires to make. It rarely, if ever, changes, because the mission of the organization is substantial and ongoing.
- Core Values: These are the values a staff emphasizes in its work with customers and donors, and with each other. Along with the mission statement, they are what make the organization unique. They are part of its core identity, essentially representing the “sign on the building.” A great way to identify your organization’s values is to ask, “What values do we turn to when making difficult decisions?
- Target Customers and Donors: The customers are the people an organization intends to help, as identified by its mission statement. Donors are those who are attracted to the organization’s mission and how it’s chosen to solve the identified societal problem or need, thereby encouraging their engagement and their financial and personal support.
- Customer and Donor Profiles: Organizations need to not only understand their customers’ needs and interests intimately, but also have some ability to meet those needs effectively and/or efficiently. Similarly, nonprofits must understand the nature of the donors who support them.
- Key Distinctives/Core Competencies: These are the unique, deeply rooted skills and abilities possessed within an organization, which it will use to create distinctive products/services. Core competencies are not created overnight. They typically require extensive effort to develop—effort that results in tremendous expertise that is valued by society and an organization’s donors and customers.
- External Landscape: This addresses “external issues,” which include competitors, as well as environmental issues such as the economy, regulatory issues/concerns, and technological developments. Anything else going on outside the organization’s four walls which could influence interest in or use of the nonprofit’s offerings should be included.
- Vision: No element is more important than vision for raising funds, motivating staff, and driving the strategic focus of an institution. It is the key tool for any organization that desires to accomplish something significant. If one’s mission describes what will be the same about an organization, then a vision states what will be different—what inspirational goal will be accomplished that will ultimately define success.
- Organizational Strengths/Weaknesses: These are any special internal capabilities, capacities, and constraints worth noting. What unique abilities do we have? What systems or processes could be of value in achieving our vision? What needs to be strengthened?
- Annual Strategic Plan: This is a comprehensive document describing the nonprofit’s funding, program/service goals, and administrative/operational plans for at least the next fiscal year. The strategic plan should define each functional department’s expected contribution to the overall vision. More than anything, an annual plan helps ensure across-the-board alignment to the organization’s vision and direction.
Identifying These Elements Is Only the First Step
When it comes to developing a strategy for your nonprofit, “filling in the blanks” is the first step. Where successful nonprofits distinguish themselves from those just trying to get off the ground is in aligning these elements to maximize their energy and efforts.
Does your nonprofit’s strategy include each of these elements? If not, why not?