There are two main ways many nonprofits go wrong when aligning their funding and strategic plans. 

• On the one extreme, nonprofit leaders don’t think about funding until after their plan is complete. This leads to revenue and fundraising goals being separate from organizational strategies.
• On the opposite end of the spectrum, an excessive focus only on fundability during strategic planning has its own challenges. This can lead to opportunistic goals that put money ahead of meaningful community well-being and ecological outcomes.

There is a better way. When you seamlessly integrate revenue opportunities and fundability throughout your strategic planning process, you end up with impactful, mission-aligned goals. You also end up with a financially feasible plan that is appealing to funders.

We identified six key steps where you can integrate financial considerations into your strategic planning process. This allows for more efficiency and better change management.

Step One. Have someone from your development and finance team on the strategic planning task force. 

Why this matters

Your development team members know what the opportunities and challenges are in approaching, securing, and stewarding your donors. Ask those team members regularly during the planning process: “How does this feel? Is this compelling? What could we improve to make it easier for donors to increase their commitment to the organization?” Meanwhile, your finance team has access to data on trends for each category of funding, so hearing their perspective earlier also helps identify problems early and coordinate across teams. This in turn can help inform the strategic plan. It is easier to make small adjustments to goals and strategies as you go than to present a final draft and only collect feedback at the end of the process.

Step Two. When setting your vision and long-term goals, be clear about the problems you are trying to solve and how you will have an impact.

Why this matters

The greatest gift you can give your organization to improve your fundraising is to have compelling “Why Statements” that increase your donors’ commitment to the organization. Make your strategic pillars your “Why Statements” that tell donors “why” you are doing the work. Use your goals to describe the problems you are going to solve, and what success looks like. Avoid setting goals like “Achieve funding sustainability” or “Raise revenue.” If you truly want mission-aligned outcomes that solve a problem for the world, you should not let funding be the most important driver of long-term outcomes that matter for communities. 

Step Three. Seek branding insights from your stakeholder interviews. 

Why this matters

Stakeholder interviews are now a widely-accepted component of most strategic plans. Use these candid conversations to assess how the organization is perceived, what differentiates your organization from others in the sector, and what associations they have with your brand. You can apply these insights as you select strategies that have the potential to enhance your brand, and as you write the plan in language that will resonate with stakeholders. An inspiring strategic plan that aligns with stakeholders’ needs is a key element to accessing new funding and expanding existing funding sources.

Step Four. Financial feasibility matters most at the strategy level.

Why this matters

Most nonprofits end up with too many good strategies during strategic planning, and it is crucial to narrow the number of strategies, prioritizing areas where your team can achieve the most impact. As you prioritize strategies, fundability is an important criterion to help you narrow. At this stage, you want to incorporate feedback from funder interviews to help determine which strategies are most likely to be fundable.

While we recommend avoiding funding as a long-term goal, it can be useful to include as a strategy. However, even at the strategy level, “Achieve funding sustainability” is too vague to be actionable. You want to tease out the details: If you want to diversify funding, is there one primary new source your nonprofit is best positioned to pursue? Are you primarily focused on expanding your major gifts? Being specific at the strategy level sets your team up for success.  

Step Five. Build revenue planning into the scope of your strategic planning.

Why this matters

When you have clarity about your strategic goals, and the tactics you will employ to get there, you can now ask yourself “How much will this cost? Where can we reliably attract the funding we need for this work?” This is a good time to consider your organization’s fundraising assets and capabilities, which should indicate where you are poised to attract new sources of revenue and what kinds of staff and board skills you need to add to your team. 

Step Six. Test your messaging and then develop a communications plan for the strategic plan. 

Why this matters

During the last phase of strategic planning, we recommend you test your messaging. This can be done in several ways, such as via a member survey, a community workshop, or by presenting a draft of your plan to key donors. Whichever method you choose, listen to the questions your audiences ask and the words that they use. These are insights into what the audiences care about. Then, mirror the language used by your audiences in your messaging and your communications plan.

Specifically for donors as a key audience, a one-on-one conversation can help build trust. One of the best ways to increase donors’ commitment to your organization is to ask them for advice, and some of the most critical pieces of advice you need are about your strategic direction. Take the time to talk with key donors about your new strategic direction and ask them what they like and what they might change. This will give your organization valuable “third party” review and will improve your ability to communicate your strategic goals, and more, to your communities.

A great strategic plan can create clarity, excitement, and optimism for your organization and your supporters. In some ways, it is the plan itself that ultimately leads many nonprofits to access new funding sources after a strategic plan is completed. That’s because you stand out more when your team can identify the challenge you are solving and your organization’s unique contributions, and clearly communicate how you benefit communities and nature.

Thinking about funding as an integrated part of your strategic planning process takes you to the next level, ensuring you can convert that clarity to funding and, most importantly, impact.