3 decisions every nonprofit should make before writing an organizational plan 

One of the reasons an estimated 30% of nonprofits don’t last more than 10 years is poor organizational development. Developing an organizational plan that clearly defines your group’s objectives is key to achieving long-term success and sustainability. 

An organizational plan, the equivalent of a private-sector business plan, lays out a nonprofit’s mission, goals, programs, and strategies for raising and managing funds. Here are three elements leaders and board members would do well to align around before they draft a plan that will position the organization for success: 

1. Clearly define the social problem the organization is working to solve. 

2. Define your value proposition—why your organization is the best positioned to solve this problem. 

3. Pick a big, hairy, audacious goal (BHAG) that is clear, measurable, and accountable.  

Ensuring agreement on these elements may involve working through disagreements, engaging in constructive critique, and resolving conflicting views. This initial time investment is needed to create a focused organizational plan that enhances fundraising and prepares the organization for new challenges. Here’s a closer look at each step: 

Step 1: Clearly define what problem you’re trying to solve 

Too many nonprofits operate based on a mission, vision, or values that are vague. We often see that leadership hasn’t had hard conversations to determine the problems the organization will and will not tackle. They may feel pressured to expand into areas valued by donors to secure funding. For example, an organization with the primary mission of providing financial literacy courses and counseling for low-income families may add service areas such as providing housing or food. In trying to do many things, they may fail to make an impact on the one problem they set out to solve. 

By contrast, when an organization clearly defines the problem they’re working to solve in their organizational plan, they can build their capabilities, strategies, and implementation to address it. Consider an example we discuss in Scaling Altruism—our partner and client Treehouse™. A Seattle-based agency supporting foster youth, Treehouse’s stated mission was “giving foster children a childhood and a future.” This is lovely but led to many competing programs, such as holiday gift baskets, backpacks, clothing, and tutoring, leaving the organization stretched too thin. 

Treehouse’s leaders agreed to narrow their focus to solve a specific problem: the fact that only 40% of foster youth graduated high school, less than half the rate of other young people. The organization redirected its energy and resources, which led to 85% of the foster youth it serves graduating high school. This shows how nonprofits increase their chances of success by focusing on the problem they’re best equipped to solve. 

Step 2: Define your value proposition 

A value proposition is a short statement that summarizes why your organization is best positioned to solve the problem. While the term is very common in the business world, it is countercultural for most nonprofits, where it may be viewed as boastful and competitive. 

In our experience, we’ve found many nonprofits operate on a myth of uniqueness—the idea that they’re fundamentally different from the private sector and the rules that apply to business don’t apply to them. Nonprofit missions may be driven by unique values, but the economies in which they compete for attention are the same as with any other organization. 

Among leaders of nonprofits with succinct, evidence-based value propositions, 49% reported greater success generating revenue, and 69% reported strengthening value to supporters. Value propositions need proof points, which in nonprofits show the social return on investment by identifying and confirming the improvements and providing metrics like the percentage of the problem solved. When combined with proof points, a value proposition can transform and empower programs. 

Step 3: Pick a big, hairy, audacious goal (BHAG) 

A BHAG is a long-term, specific, measurable, and timed objective that aligns and inspires every team member toward a common vision of success, as defined by corporate strategist Jim Collins. Treehouse aimed to ensure every foster youth in their metropolitan area graduates high school at the same rate as their peers within five years. By expanding services to middle school students, they raised the graduation rate from 40% to over 80% for nearly 3,000 youths, showcasing the impact of audacious goals for nonprofits. 

So, tackle these three decisions before writing your organizational plan. With clarity on what problem you’re working to solve, a compelling value proposition, and an audacious, inspiring goal, your organization will be able to draft a plan that empowers it to achieve its goal. 

Photo credit: JohnnyGreig via Getty Images