Tips for a successful not-for-profit strategic plan

Strategic planning can be difficult at a not-for-profit.

There’s often a concerted effort amongst not-for-profit donors, employees, and even executives to devote every possible resource and every ounce of energy to the beneficent goal of the organisation.

Yet, without a well-constructed strategic plan, resources can be wasted, and the organisation may never develop the focus and mechanisms needed to accomplish its goals. Worse, an organisation without a strategic plan might never even figure out exactly what its goals are.

As an organisation develops a strategic plan to guide its direction, it’s important for the CFO or someone from finance to be involved, said Bob Mims, CPA, CGMA, controller and director of investments at Ducks Unlimited, a membership organisation with more than 450 employees devoted to wetlands preservation.

Mims participated in a strategic-planning process with Ducks Unlimited in 2011. During a session at the American Institute of CPAs National Not-for-Profit Industry Conference in June, he shared the process that was successful during approximately four months of planning.

If you ask ten people for a definition of a strategic plan, Mims said, you are likely to get 15 answers. He likes to think of a strategic plan as a successfully implemented marriage of desired programme achievement and long-term financial or budgeting goals.

“A strategic plan, already at the core of its definition, begins to have some details and some budget parameters that have to sync to [it],” Mims said. “Because if they don’t connect, it will fail.”

The early steps in a strategic-planning process can include:

• Pick a strategic-planning team. It’s important for the team to represent the whole entity. Groups that are not represented may feel left out and fail to embrace the plan. Representation from finance is critical because the finance leader has a broad view of the organisation and a critical understanding of the resources needed and available to accomplish the plan’s objectives.

• Choose a team leader. The leader should be the person in the organisation who can bring the group together. If a programme representative becomes the leader at a not-for-profit, it may be important to remind him or her of financial constraints. The CEO has the most at stake in the strategic plan but may not be the best leader of the planning team unless he or she is someone who employees feel very comfortable sharing honest feedback with. At this point, a timeline for completing the plan should be finalised.

• Build consensus on the team. This can be one of the most difficult parts of the process. Everyone’s thoughts must receive careful consideration because the plan may fail if somebody on the team whose input is ignored starts complaining to co-workers and criticising the plan. Ultimately, the goal is to develop fundamental objectives for the plan.

The objectives are the key to the entire plan, and Mims advises keeping them simple.

“Do three objectives,” he said. “And only do three. And make sure to include every part of the organisation.”

Ducks Unlimited’s three objectives for 2012 through 2016 encompassed the organisation’s programme, fundraising, and administrative missions. They were:

• Conserve landscapes capable of sustaining North American waterfowl populations through sound science, public policy, and partnerships. (programme)
• Perpetuate the waterfowl hunting tradition and broaden support for the North American Model of Wildlife Conservation. (fundraising)
• Strengthen Ducks Unlimited’s long-term sustainability for mission delivery through fiscal conservatism, sound operational decisions, and a commitment to fundraising. (administrative)

After arriving at the strategic objectives, Mims said, an organisation can move towards a business plan for achieving them. Ultimately, the goal is to develop metrics that will define success in striving towards those objectives. Benchmarking with other, similar organisations may be a part of this process.

Mims said metrics should conform to the often-repeated “SMART” characteristics (specific, measurable, attainable, results-oriented, and time-bounded). Ducks Unlimited set its metrics at protecting or restoring at least 480,000 acres of wetlands over five years, reaching 700,000 members, and achieving a $2 million annual operational surplus.

“We acronymed it,” Mims said. “Mud, for wetlands. Members. And money. And we would have board members saying, ‘Mud, members, money. Mud, members, money.’ We coined it into one word for each strategic objective.”

In some ways, though, the planning is the easy part. Anybody can create ambitious goals. The challenge is to effectively implement a plan. Implementation requires building budgets that will result in achievement of financial goals and determining how to hold people accountable for operational goals.

Mary Legakis Engel of The Management Coach, a business coach who helped Ducks Unlimited develop and implement its plan, said this is where plans often fail. She said it’s important for employees to understand and embrace their duties related to the plan and be motivated to achieve the goals.

“Why do people fail to implement?” Engel asked. “Because people fail to understand what they specifically need to do and by when to make the strategic plan a reality. And why do people fail to know that? Because nobody took the time to engage their mind and heart to understand what they need to do.”

Engel said an organisation’s leaders must communicate to employees the changes that the strategic plan will bring for them; make sure they understand the changes they need to make; and give employees an opportunity to figure out how they are going to accomplish the new goals and get approval on their methods.

Ideally, job duties and merit pay increases will be tied to the accomplishment of the strategic plan. At a not-for-profit, a strategic plan should successfully integrate volunteers and staff and encourage co-operation between departments.

Ultimately, the plan for 2012–16 worked out for Mims and Ducks Unlimited. This year, in the fourth year of the five-year plan, all of the objectives and metrics have been achieved.

Which means it’s time for another strategic plan and a reboot of the process that was successful before.

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine editorial director.