Why Planning is Important for Your Nonprofit

By Stan Hutton, Frances N. Phillips

No organization has unlimited funds. Even the largest, wealthiest nonprofit needs to decide how to allocate its resources effectively. Planning helps you make decisions about how to align your organization’s mission with its resources by answering questions such as “Is now the best time to invest in a new program?” or “Is our tutoring program still filling a community need?” or “Is our service center convenient to the people we’re trying to serve?”

A nonprofit organization undertakes planning for the following reasons:

  • To build a structure that guides its activities in pursuit of its mission
  • To allocate organizational resources in the most effective ways
  • To create a framework against which the organization’s performance can be evaluated
  • To adapt to changes in the external environment
  • To reach agreement among board, staff, and supporters on desirable goals for the organization and well-considered ways to meet those goals

Think of a plan as a blueprint or scheme describing what needs to be done to accomplish an end. In an ideal world, if your organization completes every step of its plan, you achieve your goals. However, not all plans are written as recipes that — if followed closely — will serve up a perfect meal. Scenario plans, for example, help an organization think through alternatives it may choose among; other planning approaches invite organizations to assess and revisit their strategies frequently.

The act of planning has value apart from the written document that’s ultimately created. That’s because, in theory, the planning group comes to a shared understanding of the organization’s mission, and the decision-making process ensures that everyone understands what needs to be done and agrees that it’s worth doing.