January 11, 2022

Stating the Obvious is Not Strategic

Recently, I read a strategic plan from a nonprofit that was built around the following four strategic imperatives:

  • Increase awareness of your organization through a comprehensive marketing plan.
  • Ensure fiscal sustainability by diversifying revenue sources.
  • Strengthen community and partner relationships.
  • Enhance impact by expanding the range of services offered.

My question to the nonprofit – and to the consultant that guided the planning process – is this: under what strategic scenario would a nonprofit not pursue these four “imperatives”? In other words, where’s the strategy?

On their own, the four statements represent a set of important goals that guide any organizational development effort. But let’s not confuse the important with the strategic. Strategy is about positioning your organization so that you can create the greatest mission impact in the most sustainable manner. An effective strategic position is one in which:

  • You are doing the right things, for the right people, for the right reasons.
  • You are clear and intentional about how you relate to and differentiate yourself from others.
  • You have an appropriate and stable mix of revenue.

Unquestionably, the best strategic vision means nothing without the activities needed to support it. However, detailed plans are predicated on a clear understanding of where you are going. To test this, ask yourself this question: If every tactic in our plan is completed, will we have progressed strategically? The fact is that we cannot answer that question without a clear strategic scenario (or vision if you prefer) to provide context. Consider these scenarios:

  • We are a startup organization trying to solidify our place in the community.
  • We have an established program with growing demand that exceeds our capacity.
  • We have grown significantly over the past ten years and may have strayed too far from our core purpose.
  • We are a mature organization but anticipate significant changes in our industry.

Nonprofits have lifecycles. Each lifecycle brings with it a specific set of questions related to the relevance, impact, and sustainability of the organization. This grand scenario shapes the questions that will in turn give substance to priorities for program development, organizational capacity, and external relations. Typical questions include:

  • Should we maintain focus on our current target population?
  • Should we pursue partnerships to achieve our mission aspirations?
  • Are we efficient in our resource development efforts?
  • Do we have the board and staff skills to support our aspirations?

To illustrate, consider a large nonprofit that decides to reposition itself from a residential program built on county agency referrals, to a community-based service provider (i.e., no referral needed). Unlike a comprehensive marketing plan, which assumes that everyone is a potential client, referral source, or funder, the strategic marketing needs of this organization revolve around the need to reframe its image in the minds parents, school counselors, and peer providers. There is nothing generic about this.

The same is true for revenue diversification. Notwithstanding the “eggs in a single basket” parable, significant revenue diversification is not possible or even appropriate for some nonprofits. For example, recent research shows that large nonprofits achieve long-term stability by homing in on one major revenue source that is connected to the mission. For others, diversification is difficult due to the nature of their work. Tinkering around the margins of a significant – and perhaps reliable – revenue source is not diversification and can waste a lot of valuable time and money that could be better spent on direct mission impact.

Those of us of a certain age remember the “where’s the beef” commercials. The point of the commercial was to point out that it’s not the lettuce, pickle, or special sauce that makes the burger. It is the meat. Likewise, I advise you to not mistake the dressing of data tables and formal documents for actual strategy.

Need Additional Assistance?

If you are interested in going deeper into your nonprofit strategy or if you wish to review your organizational strategy more broadly, click the link below to schedule a 30-minute phone or zoom consultation with Mike Stone.

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