June 14, 2017

Strategic Planning in a Nutshell: 4 Key Steps

Have a question about foundations? Ask the authors. They might answer it in the next installment of their monthly column on running effective foundations.

As more and more foundations seek to increase their impact by concentrating on a limited number of priorities, they often adopt a strategic plan to guide them. Written by staff members or a joint staff-board task force, sometimes with the help of an outside consultant, a strategic plan lays out the foundation’s goals and its strategies to reach them over a specified period (five years is common).

Developing a strategic plan often takes up to two years. But it doesn’t have to be such a time-consuming, complicated process. It is, in fact, conceptually quite simple, and should take less than a year from start to finish.

The key is asking and answering four questions. These will help you determine where your foundation can have the most impact and identify the steps to take to effect change — the essence of a strategic plan.

1. What are the most pressing needs that fall within your foundation’s mission?

You can choose from a variety of approaches to answer this question, such as:

  • reviewing relevant literature and analyzing existing data on issues that relate to the foundation’s mission.
  • commissioning surveys.
  • holding focus groups among nonprofit staff members, policy makers, or others working on your issues.
  • interviewing board and staff members, donors, clients, and experts in the field.

The Foundation for a Healthy Kentucky found a creative way to identify the state’s most pressing health needs. To supplement state health statistics and findings from large-scale population surveys, it hired an experienced journalist-analyst to travel the state and interview people — some identified by the foundation staff, others encountered randomly at truck stops and diners. This quasi-journalistic approach revealed issues that a more formal survey or focus groups might have missed.

2. Who else is addressing the needs?

Foundations don’t work in a vacuum; they need to find out what nonprofits, government agencies, businesses, and other grant makers are doing, or are planning to do, to address the needs identified in step 1.

For example, after a needs assessment revealed a gap in access to dental services for poor children in its state, the Missouri Foundation for Health commissioned an inventory of oral-health resources. The study revealed that scant attention was being paid to this urgent problem. The foundation took steps to improve oral-health services, teaming with other grant makers to pay for the new position of state dental director.

By contrast, when the Community Foundation for the Land of Lincoln set out to boost the nursing work force in central Illinois and enable nurses to play a greater leadership role in health policy, it discovered that other community foundations and organizations around the state were interested in the same issues. As a result, what began as a regional partnership was greatly expanded and wound up having statewide impact.

3. Once you know the needs and available resources, what should your goals be?

Foundations have finite resources. Their leaders must make hard decisions about what their priorities are — that is, they must set goals.

Goals can be aspirational or easy to reach, general or specific — there is no right way to do it. And they should be commensurate with the scope of the problem. If a foundation is, say, trying to reduce a drug-abuse problem affecting 100 communities, it will barely make a dent if it targets only three of them. Planning tools from business, such as SWOT (strengths, weakness, opportunities, and threats) analysis, logic models, theories of change, and systems analysis, can help — as long as they don’t become overly complicated.

Of course, a foundation doesn’t have to achieve its goals all by itself. Humility about what’s doable is a philanthropic virtue. Even the Bill & Melinda Gates Foundation seeks partners to reach its ambitious objectives, such as lifting people in developing countries out of poverty.

On the domestic level, in 2014, as part of the so-called "grand bargain" that helped lift Detroit out of bankruptcy and preserve the outstanding collection at the Detroit Institute of Arts, the Community Foundation for Southeast Michigan organized an extraordinary collaborative philanthropic effort that included the Ford, Kellogg, Knight, and Kresge foundations, among others.

4. What strategies should you use to reach the goals?

Once the goals are set, the next step is to devise strategies to reach them. While this may sound self-evident, some foundations — even those that think of themselves as strategic — simply haven’t thought about this step.

A strategic foundation should be prepared to make a series of related grants or investments that can collectively help achieve the goal. For example, in its work to curb youth smoking, the Robert Wood Johnson Foundation adopted a multipronged approach that included research, demonstration programs, policy initiatives, advocacy, communications campaigns, and the creation of a coordinating center.

Lately, there has been a lot of discussion about the strategic use of low-interest loans, loan guarantees, and equity investments. This effort to generate both a financial and a social return — called "impact investing" — is becoming increasingly popular as a component of foundations’ strategic planning. We will return to it in a later column.

The writers are founding partners of Isaacs/Jellinek, a consulting company that works with foundations, and the authors of "Foundations 101: How to Start and Run a Great Foundation."