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Strategy blog 2: What is a strategy and why are they important for charities?


This blog is part of a series of blogs and research about charities and strategies. This one looks at what a strategy is, and why a strategy is so important – and in particular for not-for-profit organisations.

The first blog in this series looked at what I call the super-powers of charities – the features that help charities punch above their income – of which strategy is one.

The future blogs in the series will look at some examples of great and poor strategies, what the structure of a strategy might be and the results of our survey on strategy in charities.

The reasons for having a strategy

The first thing in the creation of any strategy is to look at what the reasons for having a strategy are, and what the benefits might be. So here are some reasons I have identified

No charity can do everything

Almost every charity has a vision or a mission that is bigger than its resources. It can’t do everything. As a result, it has to make choices about how to use its limited resources, which of the options open to it, it wants to take up, and which to ignore or do less of. A strategy should be the document that guides an organisation to make the best use of its resources: the roadmap to having the maximum impact with the resources that it does have.

The world is changing so priorities should also change

Two big external events have impacted on many charities recently: The Covid 19 pandemic and the cost-of-living crisis. Any strategy drafted before 2020 is almost certainly out of date, because the external world has changed the pressures on charities and their beneficiaries. In other words, Covid and the Cost of Living crisis changed what resources charities had – typically by reducing income and increasing costs – meaning that how a charity delivers its mission needs to change.

A strategy should be the foundation of accountability

A strategy is also important because it lets all the stakeholders (staff, volunteers, donors, beneficiaries, funders, etc) of an organisation know what the organisation plans to do. How it will be different in future years. Without a strategy it is much harder to hold an organisation to account. For this reason, it’s really important that charities publish their strategies, and hold themselves to account on that strategy through their annual report. Without a strategy it’s easy to just highlight any achievements, rather than those that were believed to be most important.

A strategy looks forward, while the annual reports look backwards

I have heard people say that they don’t need a strategy because their annual report covers that same territory. This is wrong for two reasons. Firstly, an annual report by definition is backwards looking – it looks back at a particular year in question – rather than looking forward which is what a strategy does. Secondly a strategy will typically cover several years, while an annual report just covers a single year.

A strategy makes decisions easier and individuals less important

A good strategy helps make decisions easier: about investing in people or new ventures or digital infrastructure or a host of other things. This is because the strategy should make clear which are the priorities from among the different options. Similarly, a good strategy should reduce the importance of the oracle-like wisdom of a CEO, or Chair of trustees, because the priorities are set out. Conversely without a strategy all decisions need to be referred upwards because there is no guidance about what should be done.

Charities don’t need to be large or have lots of staff to have a great strategy

Any charity should have, and can benefit from, a strategy. Almost every charity has choices to make about what it does (and doesn’t) do and a strategy helps to set out those choices and the decisions that should follow. Indeed, smaller charities have more limited resources and greater difficulty in meeting the challenges they face. I would hate any small organisation to think it can’t have a strategy, just because it is small. Yes, it will have less resources but it’s just as importance for key staff and trustees to focus on the big challenges it faces and how it will tackle them.

A great strategy is like having a bigger income

Having a strategy, one that an organisation is guided by, and sticks to, should allow it to do more: to be more effective, and have more impact. In this sense a strategy is like having a bigger income.

The challenges of defining a strategy

Having read over 100 charity strategies, one of the challenges is defining what a strategy actually is. Some strategies read more like a mission and vision document, and are almost timeless in their approach. While others are much more granular in setting out what will happen month by month. In the end a strategy is for you and your organisation – so it should do the job you want it to do. Here are some of the things that in my view a strategy needs to do:

The issues that a strategic plan needs to address – four pointers

How will the organisation or its work, be different in three or five years’ time? At the heart of any strategy is how an organisation wants to be different, or what it wants to prioritise over the period of the plan. Sometimes this is set out in the form of a set of goals, and sometimes in the form of component parts of a plan.

How will an organisation get from where it is now, to where it wants to be? The biggest single weakness in a lot of the plans I have read is that the goals are great, but it’s not the least bit clear how the organisation will make them a reality. Even less clear is how either the goals, or the progress is going to be measured.

What will remain constant over period of plan, and what will reduce and what will change?

A simple way to divide up progress towards any goals is to set out what aspects of the organisation or its work will need to change. All too often a strategy appears to a kind of conjuring trick. We will achieve this goal, but we won’t do less of anything but we will do more of all these things. A strategy needs to make clear what will be the same, what an organisation will do less of, and more of, in order to reach its goals.

In the next blog on strategy, I will look at all the different components of a strategic plan and the process behind putting a strategic plan together.



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