Frequently Asked Questions about Nonprofit Strategic Planning

An Excerpt from the Center's Nonprofit Answer Book: An Executive Director's Guide to Frequently Asked Questions printed in 1998. Our goal is to provide nonprofit managers and directors with a useful reference for spotting potential problems and enable further research.

A nonprofit organization will typically conduct a need assessment as part of its overall strategic planning process or in conjunction with program planning for a particular project. To evaluate the community’s needs in a particular issue or geographic area, an organization should consider both objective, quantitative data (e.g., demographic breakdowns of residents by age, gender, ethnicity, income level and so on), and subjective information, (e.g., the views and experiences of people involved with the relevant issue or area).

You can find quantitative information in published sources of data. These include the U.S. Census; government reports; statistical, demographic and market research services (such as provided by Dun & Bradstreet or other services); United Way periodic reports; professional associations, colleges and universities; and umbrella groups concerned with your field. Finding this information can require a good deal of creativity. Librarians can be very helpful in this area. It is helpful to gather information over a period of two or more years in order to be able to track trends.

Subjective information can provide a human context to the quantitative information. Current and potential clients, their families, and others knowledgeable of the problem you are studying are good sources of such anecdotal and opinion information. Techniques for gathering qualitative information include interviews, focus groups, and town hall meetings.

Note: The question of how to conduct a full need assessment is difficult to address in a short-answer format. Much will depend upon the particular issue or area studied and the organization’s approach to it. You may wish to seek assistance or consult someone familiar with facilitating the process for nonprofit organizations.

Additional Resources
Evaluation Toolbox Developed For Westminster Corporation Owner Services Programs, by Rainbow Research, Inc. This is helpful for conducting interviews and focus groups.

Quick Facts from the Census Bureau: http://quickfacts.census.gov/qfd/

For Los Angeles County, see the Healthycity website.
http://www.healthycity.org

FAQ #2. How does the Americans with Disabilities Act affect how we deliver services?

The Americans with Disabilities Act addresses three areas: consideration for hiring (see Human Resources FAQ #6), access barriers to an organization’s space and manner in which services are delivered. The latter is addressed in this question.
When an organization accepts funds from the federal, state or local government, it takes on the responsibility of meeting the Americans with Disabilities Act (ADA) program accessibility standard. Under the ADA’s standard, publicly funded organizations are prohibited from denying people with disabilities equal access to participate in programs and activities because facilities are not accessible. This does not mean that all facilities need to be made accessible. Program access can be achieved by creating physical access through structural modifications and non-structural methods.

Examples of non-structural methods for creating program access include (1) meet at an accessible location; (2) home visits and curbside delivery; and (3) networking and referral to other organizations.
The ADA requires that organizations provide their services to people with disabilities in the most integrated setting possible. People with disabilities may not be placed in a segregated or separate section solely because of their disability.

Adapted from: Americans with Disabilities Act Compliance Guide for Organizations, by June Isaacson Kailes

FAQ #3. What is an operational plan?

An operational plan provides a one-year plan of operations for a nonprofit organization. It is usually based on the organization’s long-term strategic plan. The detail in an operational plan includes specific goals and objectives along with action steps, responsible parties and deadlines for accomplishing each task. The operational plan provides staff members, volunteers, managers, the executive director, board members, and board committee chairs with an understanding of what is expected of them over the next twelve months and how their actions will contribute to the organization’s accomplishments.

The level of detail in an operational plan is greater than in a strategic plan. The operational plan should bring the full organization’s workload together into one document, addressing both continuing or ongoing work objectives as well as the critical issues addressed in the strategic plan. The operational plan should be developed at the same time as the organization’s annual budget, since they are closely intertwined.

Progress against the operational plan should be monitored by each manager on a monthly basis and by the board on either a quarterly or semi-annual basis. Staff performance evaluations should also be linked to what is listed in the operational plan.

FAQ #4. What is included in a strategic plan? Does our organization need one?

Every organization can benefit from reaching agreement on major issues facing it, establishing priorities, and defining each person’s responsibilities in helping the organization achieve its mission and goals. Strategic planning can help an organization focus its vision, assess the organization’s direction in response to a changing environment, and ensure that members of the organization are working toward the same goals. Strategic planning is a systematic process organizations use to agree upon priorities for the organization.
Strategic planning is a process, first, and a document, second. Developing and implementing a strategic plan involves:

• • Determining if the organization is ready to plan.
  
• • Articulating missions and vision.
  
• • Assessing the environment.
  
• • Agreeing on priorities.
  
• • Writing the strategic plan.
  
• • Implementing the strategic plan.
  
• • Evaluating and monitoring progress in pursuit of the plan.
  

Formats for a strategic plan vary based on the complexity of the organization and its familiarity with strategic planning. Some plans can be a couple of pages and others are extensive. In some cases, they will include the first year operational plan. Items frequently contained in a strategic plan are:

• • Executive summary.
  
• • Mission statement.
  
• • Vision statement.
  
• • Organization history and profile.
  
• • Critical issues and core strategies.
  
• • Program goals and objectives.
  
• • Management and operational goals and objectives.
  
• • Resources development goals and objectives.
  

A nonprofit organization may be most successful in completing a strategic planning process by using one or both of the resources mentioned at right. In addition, assistance from a consultant familiar with strategic planning for nonprofits may be helpful.

Additional Resources

Mission Possible: Strategic Planning for Nonprofits in a For-Profit World, by Jude Kaye and Mike Allison.
Strategic Planning Workbook for Nonprofit Organizations, by Management Support Services.

FAQ #5. What is outcome-based evaluation?

Outcome evaluation focuses on the benefits that result from your program services, principally for your program’s clients. It may also look at collateral benefits for families, organizations, institutions or communities if it is reasonable to expect your program to produce changes for these entities. Outcome evaluation can be distinguished from evaluation of program process, which simply evaluates program activities and perhaps outputs (e.g., units of service).
The fundamental principle of outcome evaluation is that change should be expected only in areas where the program has provided a meaningful, strong and substantially related intervention (e.g., intense tutoring for academic achievement), which, in turn is assumed to be consistent with the organization’s mission and goals. Common outcome measures are new knowledge, skills, attitudes, values, behaviors or conditions.

In evaluating complex programs, it may be very important to involve an outside consultant familiar with facilitating evaluation processes.

FAQ #6. How should we approach collaborating with another organization?

Collaboration should be a mutually beneficial and well-defined relationship entered into by two or more organizations to achieve common goals. A collaborative relationship should include a commitment to mutual goals; a jointly developed governance structure; shared responsibility; mutual authority and accountability for success; and sharing of resources and rewards.

Getting Started
Before collaborating with another organization, you should take time with appropriate staff, volunteer and board members to define the following:

• • What is the goal of the collaborative project?
  
• • Who are potential partners for the collaboration?
  
• • Why will the project be more effective if it is conducted as a collaborative instead of by one single organization?
  
• • What resources might each party bring to the collaboration?
  
• • What additional resources are needed?
  
• • Is there enough time to decisively affect policies related to the issue?
  
• • Is each potential member adequately organized?
  
• • Are there adequate leadership links between potential members to the collaboration?
  
• • Is there adequate funding?

Adapted from: The Art of Coalition Building: A Guide for Community Leaders and Collaboration: What Makes It Work, by Cherie R. Brown.

Additional Resource
Beyond Collaboration: Strategic Restructuring of Nonprofit Organizations, David La Piana.

FAQ #7. How can we assess the viability of a potential business venture?

Nonprofit organizations can operate businesses through which they sell products or services. These businesses can be either related or unrelated to the organization’s tax-exempt mission (see Legal FAQ #19 and #20), with these characteristics presenting different tax and level of activity limitations.

The first issue a nonprofit organization should consider is its motives for pursuing a business venture. Will the business activity itself contribute toward accomplishing the organization’s charitable mission; such as by providing job training experiences for clients, or is the purpose of running the business solely to raise revenue to support the organization’s other charitable activities? Nonprofits should be careful in deciding to launch a business venture solely for income purposes. For example, if the primary reason an organization is planning to run a fast-food franchise is to raise funds, the organization must decide in advance whether it is willing to run the business in the way that may be necessary to compete with others.

Ed Skloot, editor of The Nonprofit Entrepreneur (Foundation Center, 1988), encourages the board and management of a nonprofit organization to answer the following fundamental questions before further exploring a proposed business venture:

• • What are the risks involved, and can we afford to take them?
  
• • What are the resources, skills and knowledge required, and can we supply them?
  
• • How do our values, goals and attitudes differ from those required to support the venture, and can we adapt them?
  
• • What are the timing requirements for launching the venture, and can we meet them?
  
• • How will the pursuit of this venture affect our mission-related performance?
  

Aside from stating initial assumptions about expected effort and potential revenue, stakeholders should take care to determine that pursuing the proposed business venture will not seriously damage the nonprofit organization’s public image or support. Potential board member conflict of interest should be considered as well.

The organization must thoroughly and objectively research the viability of the endeavor. This involves assessing the underlying market demand and understanding what is required to be successful in that enterprise. At this point the organization may have sufficient information to choose not to proceed on this endeavor or any other business venture.

If the organization decides to continue, it should develop an extensive business plan that describes the venture in the context of the nonprofit organization’s own need for management and oversight. The business plan should address the product/service production process, the marketing plan, finance plan, operating and control systems, and plans for meeting the venture’s marketing, finance and long-term growth needs.

FAQ #8. Can we find support for our program in its initial stages without incorporating?

You do not necessarily need to form an independent nonprofit corporation to pursue a new project’s program and fundraising activities. Some nonprofit organizations are willing to serve as fiscal sponsors for new projects whose goals are similar to the sponsoring organizations. Further, for some organizations providing such support is a core feature of their charitable mission. In Los Angeles, for example, Community Partners serves as an “incubator” providing a supportive environment to nonprofit organizations during their initial stages of development. Services include planning, financial management, personnel and legal assistance. Under the auspices of Community Partners, organizations can develop their programs and raise funds using its federal tax exemption status.

DISCLAIMER:

The answers provided can deal with complicated and sensitive legal issues. These answers are only intended to give general guidance and does not contitute legal advice. The law is constantly changing and its application always depends on the particular circumstances involved. We strongly urge readers to seek legal counsel in the event they are confronted with a possible legal problem.