Despite the ubiquitous presence of strategic plans in the nonprofit sector, there remains a veil of mystery surrounding what exactly constitutes an effective, actionable strategic plan. In this comprehensive guide, we aim to demystify what belongs in your organization’s strategic plan, breaking down the key components you should aim to create during your strategic planning process. We also discuss the three types of strategic plans every organization needs, and share resources that will help you get started on developing your best strategic plan ever.
What is a strategic plan?
A strategic plan is a comprehensive framework that aligns the an organization’s mission, vision, and values with actionable strategies to address current challenges and seize future opportunities.
It provides clear direction for decision-making, resource allocation, and performance evaluation, fostering alignment and accountability across all levels of the organization. In addition to an organization’s mission, vision and values, an effective strategic plan outlines an nonprofit’s areas of focus (strategic pillars), objectives, key results, and strategies for creating meaningful impact in the communities they serve.
Unlike short-term operational plans, a strategic plan takes a holistic, long-term approach, and acknowledges both internal and external factors that influence the organization’s success. Most strategic plans have a timeline of 1-5 years.
The best strategic plans are built on a strong foundation of research and engagement with a nonprofit’s many diverse stakeholder, especially the people and communities the organization serves. It empowers nonprofit leaders to prioritize initiatives based on constituient input and need, allocate resources effectively, and adapt to changing circumstances while staying true to their organizations’ mission and values.
Key Components of a Strategic Plan
An effective strategic plan comprises several key components, each serving a distinct yet interconnected purpose. Let’s delve into these components in detail:
Research
The best strategic planning processes begin with in-depth research, and the best strategic plans showcase key insights from that research right upfront. In our 10+ year history of strategy work with the sector, we’ve found the following three three of research to be most essential:
- Organization Assessment: This is an in-depth analysis of the organization’s internal strengths and weaknesses, including its leadership, infrastructure, programs, and financial health.
- Ecosystem Assessment: This is an evaluation of the external environment in which the organization operates, including sector trends, regulatory changes, and a competitor/comparator analysis.
- Stakeholder Assessment: It should come as no surprise that the stakeholder assessment is, in our view, the most important research input for strategic planning. It should come from engagement (such as surveys, focus groups, listening sessions) with all of your nonprofit’s key stakeholders, including board members, staff, volunteers, donors, partners, constituents who use your protrams and services, and more to understand their perspectives, needs, and expectations of your organization over the next several years. Key findings from the stakeholder engagement process should be lifted up in your strategic plan, and whenever possible, articulated with direct quotes and insights from your stakeholders themselves.
Findings from all three assessments can be neatly synthesized in a SWOT Analysis in which key insights about your organization, ecosystem and stakeholder priorities inform the identification of strengths and opportunities to capitalize on, and weaknesses and threats to overcome in the timeframe covered by your next strategic plan.
Want more on how to conduct effective research and extract insights to inform your strategic plan? Check out this resource:
Mission, Vision and Values
What is a strategic plan without a summary of your organization’s mission, vision and values? These components should stand the test of time, and should not need to be re-evaluated every strategic planning cycle. But it’s still important to include them in every strategic plan simply because they are the guideposts by which all important decisions should be made. For the sake of clarity, here’s how we define each of these elements:
Mission: The work you are doing every day to drive toward your vision — what you do, who you do it for, and the intended impact.
Vision: What the future would look like if your organization achieved all its goals.
Values: A set of guiding principles that shape the behavior and decision making of everyone on a nonprofit’s team.
If you feel the need to reassess any of these elements (or simply gain realignment around them) during your strategic planning process, these resources can help:
Pillars
Pillars are the big picture themes around which your nonprofit’s strategic plan should be centered. They are the key areas your organization must focus on in order to advance its mission and drive toward its vision, no matter what. You should have 3-5 pillars in your strategic plan. Any more than that and you’ll end up overwhelmed and unfocused. Pillars are expressed in broad, thematic terms. Here are a few examples from real strategic plans we’ve worked on:
- Enhance operational excellence
- Strengthen parent/family programming
- Elevate our brand and thought leadership nationally
- Scale our proven program to serve more youth, families and communities
You can find your strategic pillars through a series of exercieses that leverage the Eisenhower Matrix. If you need more guidance, check out this resource:
Objectives and Key Results (OKRs)
As What Matters, the group that pioneered the OKR concept puts it: “OKRs turn missions into milestones.”
OKRs are made up of two components:
- Objectives (The “What”): Objectives are specific descriptions of the most important things you need to accomplish under each pillar, over the timeframe you are planning for. Under each pillar, you should have no more than 3-4 objectives. Objectives should be qualitative and time-bound.
- Key Results (The “How”): Key results are the benchmarks you can measure that track your progress toward each objective. Under each objective, you should have 2-5 key results. Key results must be quantitative and measurable. Let’s take a look at how these three components work together via an example:
As you can see, each key result has a timeline or deadline associated with it. In this case, those deadlines range from one year out to three years out. That’s because this example comes from a three-year strategic plan. Unlike the “traditional” (tech-oriented) approach, which hinges on setting OKRs every single quarter, nonprofits should be open to setting them on a time scale ranging from one to five years. But don’t worry, using a longer time scale for setting OKRs doesn’t need to hold you back from evolving with the times or working with agility.
Want more guidance as you set your OKRs? Take a look at our OKR guide.
Activity Plans
In order to make your strategic plan as actionable as possible, we recommend assigning an owner for each pillar, and having them plan their first quarter’s worth of activities to see through the OKRs associated with their pillar as part of the initial strategic planning process. Then, they can host a quarterly activity planning session with all those responsible for the pillar’s associated objectives and key results. Together, these owners can map out the specific action steps that need to be taken over the next quarter to move the pillar and associated OKRs forward, and break them down into more granular deadlines and deliverables.
The Three Different Types of Strategic Plans
Nonprofit organizations often develop tailored versions to meet the needs of specific stakeholders. Here are three different versions we suggest:
Staff Version
The staff version of the strategic plan is often the “main” version, or the one created first. It is designed to provide detailed guidance and direction to internal stakeholders, including staff members and sometimes volunteers. It typically includes more granular information on implementation strategies, action plans, and performance metrics relevant to specific departments or functional areas. The staff version may also include additional resources, tools, and templates to support staff members in executing their responsibilities and contributing to the organization’s strategic objectives.
Board Version
The board version of the strategic plan is tailored to the needs and interests of the organization’s governing body, typically the board of directors or trustees. It focuses on providing high-level strategic insights, priorities, and performance indicators to enable informed oversight, decision-making, and governance. The board version may include summaries or executive briefings highlighting key research, strategic initiatives, risks, and opportunities, along with regular updates on progress and outcomes.
Public Facing Version
The public facing version of the strategic plan is crafted for external stakeholders, including donors, partners, beneficiaries, and the broader community. It serves as a communication tool to showcase the organization’s mission, vision, values, and strategic priorities, building awareness, trust, and support among external audiences. The public facing version may be presented in a visually appealing format, such as a brochure, infographic, or interactive website, to engage and inspire stakeholders and convey the organization’s impact, accomplishments and plans.
We break down these three types of plans in more depth here:
A strategic plan should not be a one-size-fits-all document, but rather a dynamic and iterative framework that requires careful consideration, collaboration, and adaptability to develop and use. By embracing the process of developing the key components outlined in this guide, nonprofit organizations can chart a course toward greater impact and sustainability. Let us embark on this journey with courage, conviction, and a shared commitment to realizing the full potential of strategic planning in advancing the greater good. Together, let’s dare to dream, dare to plan, and dare to change the world.
