While there are countless books and websites about strategic planning, the process often seems overly structured, rigid, and out of touch with the dynamic nature of nonprofit organizations. But it doesn’t have to be that way. A strategic plan should be personalized to outline how your organization will navigate its environment to increase its sustainability and gain a competitive edge. The plan details how the organization will put this strategy into action at all levels in a repeatable way over time.
Strategic planning isn’t a one-size-fits-all approach. Nonprofit organizations are in different lifecycle stages, have varying focus areas, different capacities for new projects, and face unique external influences. This is a key reason why many strategic plans fail: they overlook the unique circumstances of each organization. In our experience at C&A, where we’ve facilitated hundreds of nonprofit planning processes, we’ve recognized that developing various types of strategic plans is essential to address your organization’s needs in competitive environments effectively.
In fact, a study by the Bridgespan Group found that only 50% of nonprofit strategic plans are successfully implemented, often because they fail to consider the organization’s unique context or because they’re too rigid. This underlines the need for a flexible, tailored approach to planning.
We’ve found that determining the most suitable type (or combination of types) of strategic plan for your organization is a delicate balance of art and science. As you continue with your strategic planning efforts this year, we encourage you to refer to the information below to chart the best path for your organization.
ACTION PLAN
An action plan is all about getting things started the right way and in the right order. It’s created when launching a new organization to ensure that smart decisions are made or when an existing organization needs a quick boost. For start-ups or those without a previous strategic plan, a quick one-year action plan can help build discipline around planning without the hassle of a complicated and costly process. We also use action plans to kick off new ventures or objectives within an existing strategic plan.
According to the Nonprofit Finance Fund’s 2022 State of the Nonprofit Sector Survey, 60% of nonprofits expected to see an increase in demand for their services. Startups and organizations without prior strategic plans can benefit significantly from action plans, which provide a framework for meeting immediate needs without overextending resources.
SUPPORT PLAN
A support plan is put in place when a company hits a roadblock in its growth due to operational or staffing issues. This usually happens when the organization is gearing up for future growth. Business experts have observed that large companies, like those in the Fortune 500, alternate between periods of growth and plateau. During the plateau phase, organizations focus on strengthening their foundations and addressing growing pains before moving into the next growth phase. It’s a time for organizations to take stock and ensure their operations are running as efficiently as possible based on best practices.
Research from McKinsey & Company shows that companies that successfully manage transitions between growth and plateau phases are twice as likely to deliver superior shareholder returns over the long term. For nonprofits, applying this principle through a support plan can ensure they remain sustainable and mission-focused during periods of transition.
REINVENTION PLAN
A reinvention plan is like an extension of the current strategic plan. It’s used when there’s uncertainty about future funding or leadership, making it difficult to create a new strategic plan. This plan involves reviewing the results of the current plan and finding new areas to add. Many nonprofit organizations planned to start a strategic planning process in 2020, but when the pandemic hit, they switched to a shorter-term reinvention plan. Because of all the unknowns and the extra work needed to meet community needs during the pandemic, a reinvention plan was a great way to focus on strategic issues without overwhelming the organization or making unrealistic plans.
A 2021 survey by the Center for Effective Philanthropy found that 67% of nonprofits adjusted their strategic plans due to the pandemic, highlighting the importance of flexibility and the need for reinvention plans to navigate unprecedented challenges.
SCALE PLAN
A scale plan is all about growth, whether it’s in programming or expanding into new areas. It’s like a next-level move for an organization or community. To pull it off, you need things to be running pretty smoothly, and you’ve got to find out what the community actually needs.
For a long time, people thought a strategic plan had to be a huge transformation. But in the real world, we’ve learned that going big isn’t always the way to go in the nonprofit sector. Nonprofits can grow in two ways: 1) broadening their reach (more places, more programs) or 2) getting really good at what they’re already doing. Both have their perks, but they each come with their own challenges.
According to research from the Stanford Social Innovation Review, nonprofits that strategically scale by deepening their expertise in core areas often achieve greater impact than those that expand geographically or add new programs without solidifying their existing strengths.
TURNAROUND PLAN
The turnaround plan kicks in when an organization hits the skids and needs to take quick action. It’s all about aligning the mission with the financials, often called “right-sizing.” This plan involves checking out the competition and assessing the impact on the community.
Amidst the challenges posed by the pandemic and economic downturn, many nonprofits find themselves having to consider a turnaround plan. This isn’t necessarily a reflection of poor management but rather a response to external forces. Instead of using the term “turnaround,” we often refer to this process as “right-sizing.” Due to the financial challenges brought about by the pandemic, many nonprofits need to regroup, consolidate, and undergo a renewal. As a result, the organization that emerges may be more efficient and better equipped to address challenges with greater creativity.
A 2020 report by La Piana Consulting noted that 33% of nonprofits anticipated needing to downsize or restructure due to financial pressures from the pandemic, underscoring the importance of turnaround plans that align mission and resources during tough times.
Today, nonprofits face many changes and challenges. It’s really important to pick the right plan. Whether you’re worried about money, trying to make a bigger impact, or turning things around for your organization, the plan you choose will make or break your success.
A good plan that’s just right for your organization is not just a map—but it’s the base for long-term success. By understanding what kinds of plans are out there and picking one that fits where you are now and where you want to go, you’re setting your nonprofit up to not just survive, but to do really well in a competitive world.
Remember, the right strategic plan isn’t about using a template; it’s about dreaming big and making it happen. There’s a lot at stake, but with the right plan, your organization can handle today’s challenges with clarity and confidence. Now, more than ever, the choices you make in your planning will shape your mission’s future. Choose wisely.
Check out these extra resources for anyone interested in learning more about strategic planning for nonprofits. These resources provide a deeper understanding and different perspectives on strategic planning within the nonprofit sector.
The Nonprofit Strategy Revolution
by David La Piana
This book offers a modern take on strategic planning, focusing on continuous strategic thinking rather than static plans. It’s a must-read for nonprofit leaders looking to stay agile and adaptive.
by W. Chan Kim and Renée Mauborgne
Although not specific to nonprofits, this book provides valuable insights on creating uncontested market space and making the competition irrelevant, which can be adapted to the nonprofit sector.
Scaling Up Excellence: Getting to More Without Settling for Less
by Robert I. Sutton and Huggy Rao
This book explores how to scale organizations effectively, a crucial consideration when developing scale plans for nonprofits.
Strategic Planning for Nonprofit Organizations: A Practical Guide for Dynamic Times
by Michael Allison and Jude Kaye
This is a comprehensive guide that provides step-by-step instructions, real-world examples, and tools for creating and implementing strategic plans in nonprofits.
The Nonprofit Business Plan: The Leader’s Guide to Creating a Successful Business Model
by David La Piana, Heather Gowdy, Lester Olmstead-Rose, Brent Copen, and Tim Wolfred
This book goes beyond traditional strategic planning, offering a framework for developing a robust business model that supports the mission and sustainability of a nonprofit.
Harvard Business Review’s 10 Must Reads on Strategy
While focused on for-profit businesses, these articles offer valuable insights on strategy that can be adapted to the nonprofit context, especially in competitive environments.
The Five Most Important Questions You Will Ever Ask About Your Organization
by Peter F. Drucker
Drucker’s classic text helps organizations of all types, including nonprofits, ask the critical questions that lead to effective strategy and mission alignment.
