How Competent Are Nonprofit Boards In Strategic Planning?

By: Eugene Fram

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“Unfortunately, boards of directors have no clear model to follow when it comes to developing the strategic roles that is best suited to the (organization) they oversee. … More importantly, the board must play a role that matches the strategic needs of the (nonprofit) and the state of its (mission’s) sector.” (http://bit.ly/16e4kT8) For both nonprofits and for-profits the strategic plan needs to be updated or revised every three to five years in a 21st century environment.

Three Strategic Dimensions

1. Nonprofits define strategies in many different ways. A great deal depends on whether or not the board has several directors who might be described as being “strategic compliant.” Their backgrounds include having worked on strategy efforts at a high level in other environments. Consequently they are aware of the bumps in the road in the process. They will not be content to substitute a statement of strengths and weaknesses as a strategic plan. They will find ways to incorporate qualitative measures into the plan, a necessary assessment for nonprofits that have impacts that are difficult to measure. (http://bit.ly/OvF4ri) To get the process rolling, the strategic compliant directors and the CEO will need to do initial process planning, such as determining whether or not an outside consultant is needed to bring a neutral view into the effort.

2. The Board’s Role. Nonprofits board interests vary widely. Because many directors are not deeply knowledgeable about the mission field, the management and staff take responsibility for the plan’s development and implementation. That becomes a rubber-stamping process that can be completed quickly, often with the plan remaining on the shelf, as other staff operational priorities intervene. The advantages of forward critical thinking are lost. Maintaining a viable strategic plan is a board responsibility, but the staff must be employed in its development. The ideal process is to develop a partnership between the two entities, with the CEO representing the staff and calling upon its expertise when needed. In my opinion, only in crises situations should boards develop strategic plans on their own. In one extreme situation with which I had contact, the board developed the plan and subsequently refused to share it with the new CEO it hired!!

3. Many Environments. Nonprofits cover a wide range of organizations in mission and size. – from charities and human services nonprofits to professional and trade associations. Each group has a cultural norm that must be considered in strategic planning. Example: Trade associations often rotate the volunteer presidency annually, while in a charitable organization the volunteer president’s term is commonly about two years. Consequently the trade association will likely have to depend more on management for knowledge of continuity in strategic planning that takes place every three to five years.

Recent survey research from BoardSource shows that about 42% of nonprofit directors serve their boards less than 6 years or less. (http://bit.ly/1DNeipS) It seems that a substantial proportion of nonprofit board members will only have one opportunity to formally help frame the future of the nonprofit. In my decades-long contacts with nonprofit boards, I have encountered many without any directors with strategic compliant qualifications. Consequently every board nominating committee needs to be certain that the board rosters always have some forward looking directors on board to help colleagues moving through the strategic planning effort for the first time.