Nonprofit Planning Strategy Considerations
The following strategies are applicable to both the organizational and program levels, adapted from Alan Andreasen’s and Philip Kotler’s Strategic Marketing for Nonprofit Organizations (Prentice Hall). This list helps generate ideas and goals about how your organization can reach its vision. As you review this list, take note of what strategies you’re currently employing or ones that you can.
Surplus maximization: An organization runs in a manner that increases the amount of resources on hand. Usually, this strategy is adopted to accumulate resources for expansion or growth.
Revenue maximization: An organization manages itself to generate the highest possible revenues, perhaps in an effort to establish a reputation or critical mass.
Usage maximization: Organizations work to serve the highest number of users of their services. This strategy can be used to position the organization or program for funding or budgetary purposes.
Usage targeting: An organization provides services in a manner that encourages serving a specific number or type of constituents. This strategy is used to address unmet needs of specific populations or to cover the costs associated with providing services.
Full cost recovery: An organization manages its programs and services so that it financially breaks even, providing as much service as the finances allow. Many nonprofits adopt this strategy in an effort to provide services without entering fiscal crisis.
Partial cost recovery: Organizations operate with a chronic deficit every year, providing services that are critical and can’t be provided at a breakeven level of costs (for example, mass transit or the post office). These organizations rely on public and private foundations, individuals, and governments to cover the annual deficit.
Budget maximization: An organization maximizes the size of its staff, services, and operating expenditures regardless of revenue or cost levels. Organizations concerned with reputation and the impact of trimming services or infrastructure on that reputation employ this strategy.
Producer satisfaction maximization: An organization operates toward a goal of satisfying the personal and/or professional needs of a founder, staff, or board of directors instead of the established needs of external clients and customers.
Fees for service: An organization provides services to clients for a fee. The fee is typically below market rates and doesn’t cover the full cost of providing the services.
Retrenchment strategies: An organization emphasizes efforts to reduce internal costs to offset the potential or real loss of revenues or grant monies. Examples include increasing staff workloads, increasing use of part-time or volunteer staff, eliminating services or programs, or reducing non-fixed expenses, such as training or supplies.
Whew! Is that it? No doubt you’ll have all these strategies in place by tomorrow. In all seriousness, pick one or two strategies that you think can be the most effective in your organization and use them to develop the basis of your strategic plan.