Strategic Planning for Nonprofit Organizations: Common Models and Best Practices

A well-rounded nonprofit strategic plan is essential whether the internal or external states are critical or not. Many organizations leverage strategic planning to secure funds, increase reach, and scale services. According to BDO’s 2024 Outlook, 62% of nonprofits consider strategic alliances with other organizations in the next 12 months.

Strategic planning nonprofit organizations always have the upper hand in handling both critical and day-to-day scenarios. Having a thought-through blueprint allows for acting mindfully and leveraging every team member’s unique advantages. Thus, according to the Nonprofit Sector Leadership Report, strategically wise nonprofits have the following benefits compared to organizations without strong strategic capabilities:

• 7% more likely to engage in partnerships.
• 14% more likely to take a calculated risk.
• 15% more likely to implement annual CEO reviews.
• 25% more likely to implement efficiency evaluation practices across the organization.

However, as much as 49% of nonprofits struggle to formulate and execute strategic plans. This time, Board-room.org has explored all the vital elements of developing a solid strategic plan for nonprofits and put a white paper that you can put into practice after reading.

What is strategic planning for nonprofit organizations? 

Strategic planning is the process of creating an action course for any company or project. Although the general idea behind developing a strategy is similar across all organizations, the people and factors that contribute to the process are unique to each cause.

Compared to for-profit companies, nonprofits have drastically different goals. This means that the tools and tactics used for achieving these intentions will also be specific to nonprofit operations. And strategic planning for nonprofits means creating a detailed resume of all the instruments and techniques that will contribute to the main goal.

Definition: A nonprofit strategic plan is a summary of the organization’s specific objectives and the methods of their achievement. Such a plan will typically feature research data, people, procedures, schedules, and more.

The overall strategic planning process varies depending on the organization’s standing in the community, the external forces, and the internal dynamics. That’s why nonprofit firms might take different approaches to it.  

But at the same time, the essential strategic planning process steps for nonprofits remain constant. Here are five key phases of putting together a strong strategy:

• Outlining the ultimate goal. Commercial organizations aim to earn revenue, but for nonprofits, the money they make is just an instrument that assists with making an impact. Any earnings are reinvested into the nonprofit organization to promote its goal. Therefore, defining and comprehending the primary purpose always acts as the foundation for a nonprofit strategic plan.
• Gathering input from stakeholders and contributors. Nonprofit organizations are highly people-driven. That’s why it is necessary to consider the opinions and strengths of all contributing associates.
• Indicating a fundraising strategic plan for nonprofits. The main task of every nonprofit is to attract awareness and raise funds. There are always multiple solutions to acquiring strategic planning resources for nonprofits, and the organization’s task is to find the right one. 
• Setting objectives. A nonprofit strategic plan has to include sub-goals and objectives of the ultimate goal. The objectives are divided into short-term and long-term and sometimes don’t influence the main purpose directly but rather serve as a supporting factor.
• Finding an optimal approach to each objective. Each objective is backed by specific roles and actions to help realize it. The strategic plan will also outline the time frames and quality-measuring methods to ensure the objectives are met.

How nonprofit strategic planning differs from the corporate sector?

While nonprofits are typically 501(c) tax-exempt organizations, their operating models resemble those of corporate businesses regarding financial management, human resources, and leadership structures. However, there are fundamental differences between nonprofit and corporate strategic planning processes. Let’s check the differences in the comparative table.

Strategic planning aspect	Nonprofit	Corporate
Objectives	Mission fulfillment and maximum organization’s impact.	Market expansion, financial growth, and maximum shareholder profitability.
Sustainability	Balances long-term financial sustainability and mission fulfillment.	Emphasizes long-term financial stability and profitability.
Risk tolerance	Moderate-to-high risk tolerance driven by mission fulfillment.	Low risk tolerance driven by shareholder profitability focus.
Financing	Fundraising campaigns, donations, and grants are the primary financing sources.	Products and services are the primary revenue sources.
Resource allocation	Allocates resources to maximize social impact.	Allocates resources to maximize financial returns.
Board leadership	The Nonprofit board role in strategic planning includes mission fulfillment, community relations, and partnerships.	The corporate board role ensures shareholder profitability and communications.
Partnerships	Seeks collaboration with governments, other nonprofits, and community organizations for maximum social impact.	Seeks mergers, acquisitions, and joint ventures for market expansion, operational efficiencies, innovation, and long-term profitability.

Common nonprofit strategic planning models

The strategic planning nonprofit model defines the regularity and format of every strategizing event or activity. Once again, consider your organization’s unique attributes and most influential outside factors for the optimal path.

Below are a few approaches to strategic planning for nonprofit organizations, including the pros and cons of every style.

Organic planning

This nonlinear, almost go-with-the-flow strategic planning nonprofit method helps organizations make the most relevant plans in uncertain times. An excellent example of when organic strategizing worked best was during the early stages of the COVID-19 pandemic at the beginning of 2020.

In the organic model, the nonprofit’s contributors meet up regularly to take actions based on the most relevant data and complete analysis of each team member’s advantages.

• Best for: Short-term planning during turbulent external conditions
• Not ideal for: Long-term planning, organizations with weak internal operations, large-scale external crises

Issue-based planning

When the internal instability is more substantial than external difficulties, nonprofit strategic planning needs to focus on the issues within. The task is to spot the weak elements and craft a problem-solving technique using internal and external assets.

For example, if the last fundraising event did not meet expectations, the nonprofit might want to reconsider the fundraising strategy and marketing tactics or appoint different staff to help move the cause forward.

Ideally, issue-oriented strategic planning will happen on a milestone basis until the company achieves internal balance and is ready to transition to a new strategizing model.

• Best for: New organizations and nonprofits with a past of poor management or non-strategic decision-making
• Not ideal for: Addressing an external crisis, establishing conduct between separate effective departments, long-term planning, as in a board succession plan

Alignment planning

Aligning nonprofit strategic planning and implementation is a must when the external conditions are stable and all departments function properly but fail to communicate with one another. Such disbalance might happen when the main goal is not relevant or apparent to everyone within the organization.

This way, each contributor performs well at their position but does it out of touch with the overall course. Once again, a lack of alignment can happen due to inadequate strategic management or poor strategic planning in the past.

The outcome of proper alignment is improved internal communication, meaning that most plan items will circulate the organization members on the same page, reestablishing the shared mission and employing tactics for more productive work.

• Best for: Understanding and rectifying cooperation imbalance within the organization
• Not ideal for: Major external or internal turbulence and long-term strategizing

Standard planning

The most straightforward approach to nonprofit strategic plan development is so-called vision-based or standard nonprofit strategic plan. It includes annual planning (usually for a 3-year or 5-year term). This strategizing method builds off the organization’s main goals in times of internal and external stability.

Standard style planning starts with outlining an organization’s mission, defining the supporting objectives, and then scheduling specific and measurable procedures for that mission’s accomplishment.

• Best for: Established organizations with a successful history of nonprofit strategic plan establishment during non-critical times
• Not ideal for: Turbulent scenarios and companies with a lack of internal balance

Real-time planning

The real-time approach is the most code-red strategic planning nonprofit model. Unlike the uncertainty-based organic method, real-time strategies are adopted when the crisis is already unraveling.

Force-major events, such as natural catastrophes and anything from an economic recession to a global pandemic, can serve as a reason to consider a robust nonprofit risk management plan. This crisis-management planning method calls for frequent meetings, constant reassessment of losses and achievements, and effective communication practices. 

• Best for: Immediate crisis management in all types of organizations
• Not ideal for: Times of relative external stability or long-term planning

How to create a strategic plan for a nonprofit?

Once you’ve established which strategic planning nonprofit model suits your organization best, it’s time to add value to your strategy by zooming in on several foundational elements.

1. Governance. Establish a strategic planning committee. Follow nonprofit governance best practices to ensure the optimal composition of the planning committee. It will help you accumulate diverse perspectives and formulate a comprehensive plan.
2. Research. Gather data on all possible contributors to your cause. The research stage will include getting to know other companies that operate with similar purposes, finding people and other organizations that can benefit you, exploring the major challenges of the field, and so on.
3. SWOT analysis. Take a look at your organization’s Strengths, Weaknesses, Opportunities, and Threats. A good nonprofit strategic plan has to be equally self-aware and forward-looking.
   
   Tip: You can also use SWOT analysis to assess each separate element of your strategy, including tactics and employees.
   
4. Objective establishment. A Specific, Measurable, Achievable, Relevant, and Timely (SMART) model is excellent for creating both long-term and short-term objectives. Here, it is vital to make sure that every sub-goal ultimately serves the original purpose.
5. Impact and values alignment. Your nonprofit strategic plan helps describe the correlation between the organization’s internal values and the impact you’re aiming to make. Outlining the values also lets all contributors feel unified and collaborate more effectively.
   
   Tip: Good indicators of goodwill and compassion in the nonprofit’s culture are transparency, integrity, and accountability of every member.
   
6. Input consideration. As mentioned earlier, people drive nonprofits. And even though the financial power comes from donors, it is the nonprofit’s employees who operate the whole mechanism. Therefore, consider including human resources development and deployment, enhanced communication, and uncompromised inclusivity to be a part of your nonprofit strategic plan.
7. Progress evaluation. Establish key performance indicators (KPIs) to track efforts based on your strategic goals. While KPIs may vary depending on the nonprofit and its objectives, here are a few common metrics to consider.

Area	KPI
Donor engagement	Major donorsDonor acquisition rateDonor retention rateDonor satisfaction
Stakeholder engagement	Volunteer participation rateEvent attendance rateAdvocacy participation
Financial sustainability	Revenue diversityFundraising costProgram expense ratio

One solution to common strategic issues for nonprofit organization

Many nonprofit boards follow common misconceptions about strategic planning, often originated from the lack of financing. Here are two main misconceptions inhibiting the strategic efforts of nonprofits.

1. You can save on HR development

Statista has revealed that 43.3% of U.S. nonprofits name rising operating expenses as the biggest challenge. Many organizations, especially small nonprofits, limit staff financing, relying on volunteers, to allocate scarce resources more diligently. However, professional staff is essential to nonprofit success and should be one of the top priorities in the organization.

“If you do not invest appropriately to get the best nonprofit staff you can afford, you will have a nonprofit that is neither sustainable nor effective.” Rob Harter, CEO of CCPC, former Forbes Council Member.

2. Administrative costs should be reduced

Charity Navigator recommends nonprofits spend less than 30% of their budgets on infrastructure, IT systems, and innovations. Donors also believe nonprofits should cut these expenses as much as possible, which is a common misconception. 

The Nonprofit Starvation Cycle study has revealed that overhead spending levels should be much higher than recommended by Charity Navigator. For instance, the study suggests that 35% of overhead spending positively impacts cultural nonprofits.

✅The solution: Increase administrative spending within your strategic planning model. For this, address donor expectations and seek donors with a clear understanding of business processes who accept administrative expenses more willingly.

Free strategic plan template for nonprofits: What should a nonprofit strategic plan include?

Here’s a generalized nonprofit strategic plan example. Remember that your final strategic plan will be tailored to your organization’s unique needs and goals. However, you might still include many of the following sections:

1. Executive summary is the foundation of any strategic plan template. Sum up the plan’s key points, clarifying its purpose for anyone who didn’t participate in strategizing. It’s a good idea to write this segment last.
2. Board authorization is necessary for corporations. Here, board members officially authorize the strategy by dating and signing it.
3. Organizational description exists to inform outsiders about the history and the key achievements of your organization. There’s no need to include it during internal strategic plan template development.
4. Mission statement – this summarizes why your organization exists – its values and goals – sometimes with references to particular events or people.
5. Vision statement – this describes your organization’s operational aims.
6. The values statement outlines the culture of your organization. As discussed above, its values should be directly tied to your nonprofit’s mission and serve as a guide for all contributors.
7. Values statements outline the culture of your organization. As discussed above, its values have to reflect your nonprofit’s mission and serve as a guide for all contributors.
8. Marketing approaches describe the various ways of attracting attention to your organization and its cause. 
9. Objectives and tactics are essentially a detailed illustration of the established objectives and of who will achieve what and when.
10. One-page SWOT summary works as both a base for your strategic plan for nonprofit template and proof that techniques and objectives were set correctly.
11. Risk analysis helps minimize the possible damage of various critical scenarios and keeps everyone in the organization on the lookout for undesirable factors.
12. Financial projections are a way to quantify the strategy. Define specific amounts and deadlines and commit to meeting the established goals using all necessary resources.
13. Appendices in your strategic planning for nonprofit organizations template cover anything that can add more value, illustrate data, or support any plan element. For example, you can include things like:

• Task management framework
• Strategic planning approach description
• Research data and analysis
• HR details
• Operating budgets
• Financial reports
• Communication channels description
• Strategic plan renewal schedule

Writing a strategic plan for a nonprofit based on your organization’s unique characteristics and purposes helps to operate smoothly and achieve goals faster. Additionally, having a strategy can improve the sense of effective teamwork and take your nonprofit to new levels.

Another crucial aspect of the strategic planning process for nonprofits is developing comprehensive bylaws that outline the rules and regulations governing the organization’s operations, board structure, and decision-making processes.

You can use our guide to learn how to write bylaws for a nonprofit organization and use them as a foundation for internal governance and management. 

3 nonprofit strategic planning examples

Below, you can check three examples of strategic plans for nonprofits. You can find seven more examples in our whitepaper.

1. YWCA 3-Year Strategic Direction

• Key elements: A message from the CEO, achievements during the COVID-19 pandemic, regional context, mission, vision, value statements, and measurable objectives.
• Hallmark: Visual storytelling, concise structure, infographics.
• Link: YWCA 3-Year Strategic Direction.

2. YMCA DC Strategic Plan 2015 – 2017

• Key elements: Organisation’s description, executive summary, goals, and measurements of success.
• Hallmark: Brevity, attractive visuals.
• Link: YMCA DC Strategic Plan 2025 – 2017.

3. Doctors Without Borders / Medecins Sans Frontieres Canada Strategic Plan 2020 – 2023

• Key elements: Mission and vision statements, values, and strategic priorities.
• Hallmark: Conciseness, attractive visuals.
• Link: MSF Canada Strategic Plan 2020 – 2023: In Essence

Tip: You can use a sample strategic plan by nonprofit organizations described in our whitepaper.

Strategic planning for nonprofit organizations: Two best practices

Extra research coupled with robust stakeholder communication campaigns will help you maximize your strategic efforts. Below, you can check the two best practices to extend research and mission alignment aspects.

Peer organization research

Successful nonprofit leaders conduct extensive peer research while developing strategic plans. It helps to establish performance benchmarks within scenario planning, align expectations, and reveal effective but overlooked approaches. Here are the ways to conduct benchmarking:

• Conduct benchmarking interviews. Nonprofits can interview similar organizations with similar challenges to share experiences and access networking opportunities.
• Research case studies and industry literature. Case studies, research papers, and meta-studies reveal hidden risks and opportunities in specific scenarios. A researched example of a strategic plan for a nonprofit organization can also help you build realistic expectations.

Communication planning

To ensure effective execution, one should communicate the strategic plan effectively. Here are a few practices to update key stakeholders on strategic initiatives and align their perspectives:

• Invest in workshops and presentations. Walk your stakeholders through the strategic plan. Answer the questions and promote discussions.
• Tell a compelling story. Present the plan as a relatable narrative. Use graphs, charts, and infographics to provide information in a digestible format.
• Leverage communication channels wisely. Distribute the executive summary of your strategic plan alongside the full document in the channels your board and staff regularly use. Besides emails, use corporate chats and social media.

Tip: Develop an executive communications plan to ensure mission alignment among C-suite employees.

What tool to use for creating and sharing nonprofit strategic plans?

A board portal is a management tool that boards can use to securely collaborate and share board materials, including strategic plans. This helps to ensure board of directors cybersecurity, avoid strategic issues, and increase efficiency. This is possible due to a variety of features that providers offer:

Document management features:

• Drag-n-drop to upload documents quickly
• Bulk upload to upload many files simultaneously
• Storage to store all confidential data in one place absolutely securely
• Sharing to distribute board documents and worksheets safely and have paperless board meetings 

Document management features:

• Scheduling to choose the date and assign participants quickly and easily
• Agenda builder to choose a board meeting agenda template, complete it with the required data, and share it with board members 
• Minutes to choose a board meeting minutes template, fill it in after the meeting, and share it with the rest of the team

Collaboration features:

• Voting to get answers and make decisions fast
• E-signature to get signatures and approvals in one click
• Task assignment to create a task, set a deadline, and assign an expert
• Progress tracking to monitor the team’s performance

Communication features:

• Chats to discuss business-related questions securely and n real-time
• Video calls to gather board members online and conduct virtual board meetings

You can have a look at the board portal comparison and choose which provider suits your needs the most.

Tip: Implement a comprehensive nonprofit board development plan to enhance directors’ capabilities, including digital and cybersecurity skills.

The bottom line

• A strategic plan summarizes the organization’s goals and outlines actionable achievement steps. Common strategic planning models include organic, issue-based, alignment, standard, and real-time.
• Successful organizations develop strategic plans in six steps: governance, research, SWOT analysis, objective establishment, impact alignment, and progress evaluation.
• The most common misconception about nonprofit strategic planning is to allocate minimal resources to staff development and administrative management. Studies reveal that nonprofits’ infrastructure and human resources are chronically underfinanced.
• Peer research helps nonprofits broaden strategic perspectives while strong stakeholder communications improve execution. Board management software is one of the best strategic planning tools for nonprofits to improve communications.

FAQ

How to develop a strategic plan for a nonprofit?

There are five fundamental components to a strategic plan for a nonprofit: research, SWOT analysis , SMART objectives outlining, impact and values alignment consideration, member and community input examination.

What are the strategic planning goals for nonprofits?

Any nonprofit’s goal is to make an impact. And all the strategies have to align with reaching that goal. For example, if a nonprofit focuses on delivering housing options, the strategies can involve fundraising events, networking with real estate companies, and communicating with communities to explore their unique needs.

What are the essential components of strategic planning for a nonprofit?

Once the ultimate goal is outlined, the directors must gather input from stakeholders and contributors. Based on the collective vision, the board will then indicate the most fitting marketing and fundraising strategies, set long and short-term objectives, and outline the exact steps for achieving these objectives.

Why is strategic planning important for nonprofits?

Because nonprofits are often driven by volunteers. This means the most time-saving and effective way for them to approach governance is by strictly adhering to a thought-out strategy.

Who is responsible for strategic planning at nonprofit organizations?

Strategic planning work is executed by members of the board. However, strategic planning should also include the best practices for managing the board of directors, including training and succession planning.