There’s a big hidden cost that nonprofits often ignore: the opportunity cost of decisions. Failure to consider this can result in poor decisions and/or allocation of resources. Fortunately, there are clear methods to incorporate opportunity cost into strategic decision-making and planning.

PIMG conducted applied research on management practices employed by 43 nonprofits. The best practices - those most closely associated with success - might surprise you. They concern organizational strategy with several specific characteristics. These practices outshine most others in clearly distinguishing successful from unsuccessful nonprofits.

Conventional strategic planning in the nonprofit sector is often ineffective. PIMG's Data-Driven Strategic Planning approach aims to remedy this gap. Rather than focusing primarily on alignment of people within the organization, it’s principally about identifying a strategy that will focus the organization on successful performance. Informed by hard financial and market data, nonprofits are empowered to move confidently toward ambitious, attainable goals.

Having a strategic plan in and of itself does show a statistical correlation with success. Public Interest Management Group has studied a variety of nonprofit organizational success factors, part of our Success Factor Analysis methodology. The most successful organizations are clear about what they’re trying to accomplish and why, and the validity of the methods they’re employing. 

Posted
AuthorScott Schaffer

Starting and growing an organization is no simple matter. Learn how Public Interest Management Group helped Harold Pearson, founder of Student Program for Athletic and Academic Transitioning, use financial modeling as part of a strategic planning process. Thanks to financial modeling, Pearson could chart a successful and sustainable course for his new organization dedicated to enhancing high school graduation rates for student athletes and preparing Oakland youth for college.

Nonprofit leaders have expressed frustrations about strategic planning, for example that it is often time-consuming, overly-vague, and quickly out-of-date. While newer techniques address some of these concerns, the real issue is too much time spent on strategic planning, and too little (or no) time spent on business planning.

Posted
AuthorScott Schaffer