Introduction
Business planning for nonprofits is not merely about creating a written document; it is a strategic process that helps organizational leaders align their mission, goals, and resources. This process fosters strategic thinking, guiding nonprofits through both the planning and implementation phases. Below are key elements and actionable steps distilled from The Bridgespan Group’s article “Business Planning for Nonprofits: What It Is and Why It Matters.”
1. The Importance of Business Planning
Strategic Thinking: Engages leaders to evaluate mission alignment and program effectiveness.
Alignment: Connects mission to programs, resources, and performance measures.
Example: MY TURN, Inc., used a rigorous planning process to clarify its mission, refine program goals, and establish a roadmap for growth.
2. Core Components of Business Planning
a. Strategic Clarity
Define the intended impact and theory of change:
Intended Impact: The measurable outcomes the organization commits to achieving.
Theory of Change: The logic connecting activities to outcomes.
Example Questions:
- Who are we serving?
- What outcomes do we seek?
- What programs and activities lead to these outcomes?
Case Study: Larkin Street Youth Services clarified its target beneficiaries and program focus to align with its mission of helping homeless youth achieve independence.
b. Strategic Priorities
Identify key actions needed to achieve the intended impact:
Modify, add, or discontinue programs.
Determine growth goals.
Example Questions:
- How do current programs align with our mission?
- Are resources allocated effectively?
- What are the costs and outcomes of each program?
Case Study: Expeditionary Learning Schools focused on enhancing program quality before expanding further.
c. Resource Implications
Evaluate financial, human, and organizational resource needs:
Identify necessary investments in staff and infrastructure.
Align budgets with strategic priorities.
Action Step: Forecast financial scenarios to manage uncertainty.
d. Performance Measures
Establish milestones to track progress:
Program milestones (e.g., participant numbers, outcomes).
Operational milestones (e.g., staffing, infrastructure upgrades).
Financial milestones (e.g., budgets, fundraising goals).
Case Study: MY TURN tracked progress with a dashboard linked to its strategic priorities.
3. Steps to Implement Business Planning
Step 1: Assess Readiness
Evaluate organizational readiness:
Are leadership and staff aligned on goals?
Can sufficient time and resources be allocated?
Engage board members to ensure buy-in.
Step 2: Assemble a Team
Include key stakeholders:
Executive director, finance lead, program leaders.
Board members as advisors or full participants.
Consider hiring an external facilitator for rigorous discussions.
Step 3: Engage Stakeholders
Solicit input from staff, funders, and partners.
Communicate goals, questions, and processes transparently.
Step 4: Develop and Prioritize Goals
Use diagnostic tools to evaluate current operations.
Select 3-4 time-bound initiatives and 1-2 organizational enablers.
Step 5: Create a Written Plan
Executive Summary
Standard sections:
- Executive Summary.
- Mission and Strategic Intent.
- Strategic Priorities.
- Resource Implications.
- Milestones and Deliverables.
Step 6: Monitor and Adjust
Use dashboards and milestones for regular check-ins.
Adjust plans based on new information or challenges.
4. Benefits of Business Planning
Aligns staff, leadership, and board members around common goals.
Strengthens decision-making processes by integrating data and research.
Engages stakeholders through clear communication of strategic priorities.
Enhances fundraising and partnership opportunities by presenting a compelling case for support.
5. Conclusion
Business planning is a transformative process that drives nonprofits toward greater impact and sustainability. By fostering strategic clarity, prioritizing resources, and measuring progress, nonprofits can navigate challenges effectively and achieve their mission with renewed purpose.
Credit
This document equips your organization with the foundational steps to embark on a successful business-planning journey. It was distilled from The Bridgespan Group’s “Business Planning for Nonprofits” article by Kelly Campbell.