Strategic planning is an essential component of nonprofit organizations, which determines how the organization will advance its goals and significantly impacts the organization’s potential for success. Strategic planning for nonprofit organizations allows for building an action plan that includes measurable goals and priorities to ensure efficient work. Considering the nature of nonprofit organizations, strategic planning and financial strategy presents an important component that should reflect the organization’s mission.
The phenomenon of philanthropy has existed for a long time in human history and includes aspects from many disciplines, such as psychology, sociology, and economics. According to Bekkers and Wiepking (2011), several mechanisms contribute to the human will to participate in charity, including awareness of need, altruism, solicitation, efficacy, and reputation concerns. Each of the mechanisms can operate simultaneously depending on the combination of other favorable factors: time, place, organizations, and donors. Therefore, the main function of nonprofit organizations is to create cooperation of mechanisms and factors that favor donations and the accumulation of financial resources for the organization’s mission and goals.
Next, nonprofit organizations present a complex form of enterprises because their strategic planning measures can be founded on a different basis, such as continuous contribution to one goal or changing goals depending on external factors. Thus, the strategic planning of nonprofit organizations can adhere to issue-based, organic, real-time, or alignment strategic models. Different planning models present different conditions for an organization’s activity, such as more or less frequent meetings. Thus, more frequent meetings and a higher level of informational awareness can be helpful for organizations with missions that relate to relevant issues.
Furthermore, considering the informational availability for nonprofit organization members, experts advise implementing measurable goals in the organization’s planning strategy and accessible visual accompaniment, such as dashboards. According to Polanco and Walker (2019), implementing dashboards in nonprofit organizations favors the intelligible reporting of important information for all stakeholders. The authors define that simple visual representation and transparency features of dashboards improve the viewers’ understanding of where the company is in the journey to achieve its goals (Polanco & Walker, 2019). Furthermore, dashboards focus on measurable aspects of the organization’s activity and therefore present a more accurate and business-driven approach to nonprofit organizations’ complex missions and goals. Lastly, utilizing dashboards metrics and key performance indicators provides a data basis for the organization to improve the decision-making process.
Lastly, although my experience in strategic planning is limited by the early stages of putting together a nonprofit organization, I acknowledge that strategic planning should be aligned with the organization’s mission. Furthermore, the direct connection between the nonprofit organization’s mission and strategic planning is more pronounced in organizations that target solutions to recent problems. In my opinion, financial management presents a substantial part of strategic planning; while strategic planning defines the basis of how the nonprofit organization will achieve its goals, financial management allows more detailed planning activities. Lastly, as measurable goals are essential for nonprofit organizations, financial management allows a precise planning process for the organization’s activities and provides a considerable foundation of critical economic indicators for the decision-making process.
In conclusion, this essay explored the role of strategic planning for nonprofit organizations. The essay defined that the role of nonprofit organizations is to create favorable conditions for charity mechanisms and factors and accumulate financial resources to support the organization’s mission. Furthermore, in order to ensure the efficiency of the organization’s activities, strategic planning should be aligned with the organization’s mission. Lastly, financial management provides an informational basis of measurable indicators which clearly represent the organization’s activity for all stakeholders.
References
Bekkers, R., & Wiepking, P. (2011). A literature review of empirical studies of philanthropy: Eight mechanisms that drive charitable giving. Nonprofit and Voluntary Sector Quarterly, 40(5), 924-973.
Polanco, H. H., & Walker, S. (2019). Models and components of a great nonprofit dashboard. Nonprofit Quarterly. Web.