The How and Why of Strategic and Annual Planning

To plan or not to plan? On a personal level, planning is an essential aspect of everyday life. What do I need to get done today? This week? This month? In many ways, planning helps us prepare for the challenges and tasks that may lie ahead. Think of the to-do lists that you make. Whether you physically write tasks down, use an app to organize your to-do’s, or arrange them in your mind, you are planning what needs to get done. In a sense, you are mapping out your future by addressing things that require your attention in the present. It stimulates your mind to embrace the future and envision yourself doing something to reach a desired result. Planning is a necessary activity in setting goals for yourself.

For human service organizations, whether small or large, planning is equally essential. As an organization that provides goods and services to individuals and families with varying levels of need, it is imperative that forecasting is done. This helps to create a roadmap for the direction in which the organization is headed. This is where long-term planning comes in.

Strategic planning, which is synonymous with long-term planning, is about establishing goals to sustain the future of human service organizations. Why is it called strategic planning? Strategy is the operative word from which strategic is derived. Historically, strategy was associated with the appointment of a general in the military to provide guidance on defeating enemies within battle. To serve as an advisor, many things had to be considered, including the size of the opposing army, weaponry, level of skill, landscape at battle locations, etc. in order to develop a winning strategy. Essentially, knowledge on competing factors had to be gathered to make informed decisions about next steps.

Strategic planning for nonprofit organizations follows a similar concept. Since the late 20th century, strategic planning has been used in the nonprofit sector to gather knowledge in order to determine strategy for advancing an organization’s mission. While creating a strategic plan involves levels of complexity and can be overwhelming to think about, it is critical to have a process in place for developing the plan.

Some people ask, “why should we establish a multi-year plan, when organizations are working under the pressures of an ever-changing economic, social and political climate?” While this may very well be true, in the words of Yogi Berra, “if you don’t know where you are going, you might wind up someplace else.” Human service organizations need something to which they can ascribe and push themselves to continuously evolve for the purpose of fulfilling their missions. So, if the organization is operating in a fast-paced environment, strategic planning supports the need to stay on a particular course rather than change paths so frequently that the direction in which the organization is headed is not clear to anyone within the organization.

Strategic planning is about creating a strategy where the end product is a long-term plan to be implemented over the next four years, at minimum. It isn’t just about identifying broad goals to be realized, but also key strategies for how the organization will meet those goals. The traditional strategic planning methodology involves getting feedback from different internal and external stakeholders, such as staff, clients, and community partners; obtaining information on the environment, such as with a community needs assessment or environmental scan; and conducting an analysis of the strengths, weaknesses, opportunities and threats (SWOT) of the organization.  Many organizations tend to omit a SWOT analysis from their strategic planning process; however, it is beneficial because it provides an assessment of the internal (strengths and weaknesses) and external (opportunities and threats) landscape. Since the strategic planning process includes perspectives from various types of stakeholders, an organization can incorporate feedback in these categories to inform strategic decision-making.  Mind Tools, Inc. offers some great resources on conducting a SWOT analysis.

As is the case with for-profit organizations, typically the owners, board members, and leadership in nonprofit organizations lead the strategic planning process. Strategic planning is a critical activity within human service organizations because it provides a sense of direction in which the organization is headed.

If my organization develops an annual plan, should we still develop a strategic plan?

To put it simply, yes. Your organization should still create and implement a strategic plan, even if annual plans are developed; each plan has a different purpose.

The strategic plan identifies the framework for the organization on how to build and sustain programming over time. Should the organization pursue a new funding stream, provide new services aligned with its mission, adopt a trauma-informed model? The strategic planning process allows the organization to determine ways to advance its mission and consider the resources needed to do this. If the organization wants to build a new, state-of-the-art training facility, the strategic plan would include strategies to secure funding, such as a capital investment grant.

The annual plan can include goals that are directly or indirectly related to the strategic plan and are specific to the department or program. So, essentially, the strategic plan influences the annual plan; it is usually not the other way around. Annual planning is largely connected to the budgetary approval process for the next fiscal year. Therefore, it usually involves department and program directors since they project anticipated revenue and expenses, and ways the department is expected to grow. For the annual plan, organizations need to consider where they want programs to be within the next year and the strategic priorities shape those annual goals. Does the organization want to increase the number of clients served by 15% or offer support groups to survivors of human trafficking? The annual plan is operational and considers the daily tasks needed to run a program or department. If one of the organization’s strategic goals is to provide trauma-informed care to clients in all 3 counties where services are provided, then providing new support groups to trafficking survivors seems more closely aligned with the organization’s strategic plan than increasing the number of clients served in programs. This is an example of how an annual plan goal is supported by a goal outlined in the strategic plan.  The strategic plan should guide the organization’s yearly objectives.

In order to successfully implement both strategic and annual plans, the organization should identify opportunities to track progress over time. Establishing clear metrics to demonstrate whether goals have been accomplished allows the organization to periodically verify implementation of either type of plan. Determining how progress is measured is equally as important as developing the plan and should be outlined within procedures. Once a clear mechanism has been established, it should be outlined in the strategic and annual planning procedures.

Benefits of strategic planning

• Provides a roadmap to stakeholders on organizational advancements
• Fosters a mission-driven culture within the organization
• Demonstrates a commitment to excellence
• Engages staff in forward-thinking
• Advances the impact of fulfilling organization’s mission

Benefits of annual planning

• Establishes short-term gains to enhance programming
• Provides a deeper connection to the strategic plan
• Reinforces the mission of the organization in daily practice
• Gives staff a clear direction on their responsibilities within the program/department 

So, back to the original question, to plan or not to plan? If you are likely to plan out your day, week, or even the next month, hopefully, you see the value in planning the priorities for your organization over the next year and especially how the next several years could potentially look. In addition to creating an opportunity to explore new avenues for the organization, strategic and annual planning can foster a sense of hope in your staff about what may be on the horizon for your organization, despite all the external pressures that organizations continuously face.

A few resources

• National Council for Nonprofits strategic planning tools
• Strategic Planning for Nonprofit Organizations: A Practical Guide for Dynamic Times by Michael Allison and Jude Kaye
• Example of strategic and annual plans and how they interact: