Strategic planning for nonprofits is undergoing subtle but clear changes. These may be more evolutionary than revolutionary but if it’s been several years since your organization has developed a strategic plan, expect your next plan and planning process to look different.  

 “Clients want flexibility in the process, emphasizing some phases over others and using the process to reconnect and build consensus for the organization,” notes Capacity Partners Partner Consultant Margo Reid. “One third of our 1.5 million nonprofits failed during the pandemic. Clients continue to look for a dynamic strategic planning model and process that emphasizes sustainability and accountability.”   

Partner Consultant Steve Longley observes, “Nonprofits that have weathered the COVID crisis and are now looking at engaging stakeholders for longer-term impact have decided – strategically – to make diversification of revenue a top priority. This takes a new look at a broad range of sources, not all of which will fit, but upon which a dramatic jump in funding can be developed.” 

Consider these emerging concepts: 

  1. Increased focus on impact measurement and outcomes (not outputs): Nonprofits are emphasizing the measurement and demonstration of their impact through clear and measurable outcomes, enabling data-driven decision-making and effective communication about benchmarks and success. These also generate helpful data points for reporting back to funders. 
  2.  Building flexibility into the plan: Some nonprofits are moving away from rigid, long-term plans, embracing shorter-term strategies that provide room to react and respond to changing circumstances and emerging opportunities and priorities. This can include using scenario planning — considering multiple future scenarios and developing strategies to be prepared to address each. This helps organizations become more resilient and responsive to changing circumstances. 
  3.  More expansive definition of stakeholders included in the planning process: Strategic planning now frequently involves greater stakeholder engagement and a broader participatory approach. While this is not a new concept, the breadth and intentionality of stakeholder engagement have grown. Nonprofits increasingly are recognizing that effective strategic planning requires active involvement from a wider range of individuals and groups to make informed decisions, create meaningful impact, and build stronger relationships with their stakeholders. This collaborative approach helps to solidify buy-in and ownership, while incorporating more diverse perspectives and generating new ideas. 
  4.  Pursuit of sustainability and diversified funding sources: There is intensified recognition of unpredictability with governmental funding sources as the shaky economy continues to stir the revenue pot. In a difficult environment, nonprofits are committing to baking financial sustainability into their strategic plans by pursuing diversified funding sources. In terms of committing to sustainability, nonprofits aren’t focusing solely on money, although that is essential. Sustainability also requires that other resources are abundant and productive – high staff retention and successful program delivery as measured by metrics, just to name a few. 
  5. Incorporation of technology and innovation tools: Strategic planning for nonprofits is taking into account rapid advancements in technology and the opportunities they present for efficiency and growth in an array of realms, including communications, fundraising, service delivery, and overall operations. While nonprofits should proceed with some caution, the tremendous potential of AI is opening up a whole new toolkit for operations across the board, especially for small organizations. Strategic plans should take into account opportunities for efficiencies, not just through AI but through investment in CRM tools and systems that, at a minimum, talk to each other. 
  6. Increased focus and accountability on Diversity, Equity, and Inclusion (DEI):  A sense of urgency around DEI and social justice issues has had a broad impact on nonprofit management and service delivery. In the strategic planning context, nonprofits are seeking more diverse perspectives, voices, and experiences to ensure that their strategies are inclusive and can address systemic disparities. Strategic plans are establishing metrics and benchmarks to measure progress toward achieving DEI goals. Regular evaluation and reporting on DEI indicators help organizations hold themselves accountable, internally and externally. 
  7. Consideration of pandemic lessons. For direct service organizations, for example, a post-pandemic consideration is whether and how to continue providing services virtually.  The pandemic showed it was possible. Now nonprofits have to decide the right balance of in-person and virtual services to maximize cost-effectiveness and program efficacy.