Strategic Issues In Nonprofit Management - Presentation Transcript 1.

Nonprofit Organizations Organizations which enjoy tax exempt status as a result of being organized to serve a broad public interest. Nonprofits and profits o Nonprofit organizations are permitted to generate a profit o However, nonprofits may not distribute their profits to their staff or directors nondistribution constraint o Surplus must be used to further the mission of the organization the nonprofit world has been experiencing significant changes o Increasing privatization of government services (education, health care, social services, the arts) o Increasing financial pressure on nonprofits o Increasing concerns about the efficacy of nonprofits o Increasing corporate social responsibility initiatives and funds Some of the management challenges of the nonprofit enterprise o Defining and measuring success (economic stability and growth is a subsidiary goal). o Raising funds cannot sell the company shares o Attracting and motivating people given the often limited resources and the nondistribution constraint (no profit-based incentives) strategic Planning o The process of developing a comprehensive document that sets forth what and organization is working to accomplish and how it intends to succeed The Strategic Plan o Connects the mission and the programs o Establishing performance measures that are understandable to all o Encourages strategic thinking the best allocation of scarce resources o 2. The four main components of strategic planning Strategic clarity Mission statement Intended Impact Theory of Change o Strategic priorities: What specific actions and activities must take place to achieve the intended impact o Resource implications: To pursue the priorities, and the plan to secure them o Performance measures: Establishing the quantitative and qualitative milestones to measure progress 7. A nonprofits theory of change: o Theory of Change : Explains how the organizations intended impact will actually happen. In other words, why will the organizations approach bring about the desired change. 8. To clarify a nonprofits theory of change, ask: o What are the most important elements of our programs? o What assumptions led us to choose these particular program element? o Are there other ways to achieve the desired outcomes? Why are we not taking that approach? 9. Performance measures o Need to collect data INDICATORS o Program milestones Quantity Quality o Operational milestones Human resources Infrastructure o Financial milestones budget o

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Strategy converts a nonprofit institutions mission and objectives into performance. Despite its importance, however, many nonprofits tend to slight strategy. It seems so obvious to most of them that they satisfy a need, so clear that everybody who has that need must want the service the non-profit institution has to offer. Peter Drucker, Managing the Nonprofit Organization, Principles and Practices

Step #1: Agree on a Strategic Planning Process: This may be done at a Board meeting with key staff present, or may require a special meeting or retreat, including Board members, key staff, and some external stakeholders Step #2: Define or Review the Organizations Mission Be sure there is consensus on why the organization exists, the goals or outcomes it seeks to achieve, and whom it serves Step #3: Conduct an Environmental Scan This helps provide an understanding of how the organization relates to its external environment This process is often referred to as a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Step #4: Identify Key Issues and Choices Specify strategic issues that the organization should address, and set priorities in terms of time or importance. If there is little disagreement about issues and priorities, it may be possible to move immediately to the organizational vision and then goals. Step #5: Develop a Shared Vision for the Organization Step #6: Develop a Series of Goals Develop a series of goals or organizational status statements which describe the organization in a specified number of yearsassuming it is successful in reaching its mission. It is usually a short step from the vision to goalssometimes the statements describing the vision are essentially goal statements. Step #7: Agree Upon Key Strategies Agree upon key strategies to reach the goals and address key issues identified through the environmental scan. The major emphasis should be on broad strategies, including current and new programs, advocacy, collaboratives, or other approaches. These strategies should relate to specific goals. The process requires looking at where the organization is now, where its vision and goals indicate it wants to be, and identifying strategies to get there. Step #8: Develop an Action Plan Develop an action plan that addresses goals and specifies objectives and workplans on an annual basis. Strategic planning recognizes that strategies must reflect current conditions within the Step #9: Prepare a Written Statement Step #10: Build in Procedures