As well as publishing forthcoming annual objectives, the vision, mission and values to stakeholders, it’s useful for charities to develop & publish a Charity Strategic Plan. This is usually posted on the charity website. The Strategic Plan communicates to stakeholders, the future focus of the charity, ideally with some content about :

• building unrestricted reserves (to improve ‘black swan*’ resilience and ensure financial going concern),
• creating designated reserves (1) for future infrastructure improvements, (2) as seed funding to diversify income sources and (3) for anticipated cost increases. These could be caused by dramatic changes in the supply chain or extra government regulations,
• where the future focus will shift from legacy activities. An example in the Hospice charity sector might be to shift from providing beds & care onsite, to provide community support as a hub entity as well.
• what expectations the board has about future expansion or growth (widen the territories, merge with other charities, form strateic alliances etc)

The Strategic Plan needs to be more than just a list of goals or intentions. Instead it’s useful to include some broad information about HOW those goals will be met. One area are frequently omitted from Charity Strategic Plan documents is a section on plans to build or broaden the net income from various commercial sources.

*An example of a black swan event is something large, fast moving and novel, like the Covid pandemic.

Charity Vision and Mission

If the charity operates only in specific domestic, geographical territories, then rather than have a vision stating something like ‘A world in which X beneficiaries are able to realise their potential as equal and active citizens in control of their lives’, it’s better to recast the vision as ‘Improve the quality of life for X beneficiaries in our community.’ To elaborate, donors are more likely to align to the vision, when they relate to that community in some way.  After agreeing the Vision, Mission and Charity Values, the Strategic Plan can use them as its reference point.

Charity Competition

Competitive action can affect your plans. However, charities often don’t think about competition. The reality is that most fundraising charities operate in competitive markets, competing with other charities for funders’ grants and donations.

Many charities, including fundraising charities and professional membership bodies, experience competition for event sponsorship monies.

There is also competition in the labour market (the ‘war for talent’). And even competition in providing beneficiary or member services – especially where beneficiaries or members have choices about who to contact for support.

Charity Strategic Positioning

The strategic challenge for a charity is to position itself at the centre of three overlapping circles;  its values, its opportunities and its capabilities. To elaborate, there is little sense chasing opportunities that conflict with the charity’s values. Equally, there is little sense chasing opportunities, when the charity capabilities are not up to the task.

Having established its strategic position, there are multiple ways to achieve charitable impact, including through some combination of; advocacy, beneficiary empowerment, beneficiary support and beneficiary direct aid. Using a fishing analogy, advocacy might be about lobbying for sustainable fisheries management, empowerment might be training people how to run an entire fishing operation (fish farming to can), support might be providing fishing skills & equipment (training, rods and boats) to the people, while aid would be providing fish to the people.

In the following example 3 charities, X, Y and Z choose a different strategic position to differentiate themselves. Stating in your Strategic Plan that your charity will continue to position itself in providing beneficiary empowerment and support, while seeking operating excellence (efficiency) doesn’t reveal anything commercially sensitive, but does clarity your strategic positioning to stakeholders.

Charity Strategic Analysis informing the Strategic Plan

A good Charity Strategic Plan is based on strategic analysis. This can be done using a range of strategy tools; SWOT analysis with stakeholders, analysing the industry structure (Porter’s 5 forces), PESTLE analysis, analysing the value chain and the organisation’s capabilities, analysing competitors (competitive positions), identifying ‘natural allies’, identifying strategic alliance partners and producing some strategy maps. It’s well worth paying an expert to do this analysis, to help the board, its committees and the senior leadership team align and play to the organisation’s strengths.

Lastly, fundraising should become considerably easier, if the funder can be assured that robust strategic analysis was done to support the published Strategic Plan. Budgeting to update the strategic analysis once every few years, is also a risk mitigation for the risk that the charity’s relevance and impact fall short of stakeholder expectations.

Strategy Development

At the risk of sounding controversial, many charities recruit board members for their functional experience (marketing, investment management, legal etc). Or to represent a geographical stakeholder group. Sometimes charities also recruit board members to get them to sit on their commercial subsidiary boards, because of the specific commercial insights and experience they bring. 

Rarely do charities hire board members because they have strong strategy skills. Strategy is its own function, like finance or IT.  Board members can over time learn how to think strategically, but it’s important they (1) retain stewardship oversight, (2) can assess strategic options when presented with them and (3) form a consensus view on next steps.

In the author’s view, strategy development can be done best when it involves three parties – the senior leadership team, an outside strategist and the board.  The outside strategist helps shape and structure the discussion to remain strategic, the senior leadership team provide valuable information on internal resourcing, skills and financial impacts, while the board assess and sign off on the strategic plan to be executed.  When all are involved, the organisation can understand the strategy (the why and the how) and own the plan.

Shelf Life of the Strategic Plan

In a rapidly changing external environment, it’s worth updating the Strategic Plan (updating the analysis) every 3 or 5 years. A good example is that a Charity Strategic Plan written and approved in 2020 won’t include the rapid impact of generative AI, on either the charity operations, or the beneficiaries’ lives.

Finally, does Culture really eat Strategy for breakfast?

Arguably culture is about values and behaviours. Strategy is about how the goals will be met and how competitive advantage will be maintained. Culture and strategy are therefore complimentary aspects, not rivals. Culture may be vocal and colourful. But strategy quietly pays the bills!

Simon