Strategic and business planning: Why it matters for small charities and how to tackle it

Every year, Cranfield Trust has the privilege of working alongside hundreds of charity leaders, supporting many of them with the development of their strategic and business plans. We’re seeing demand for our pro bono consultancy support in this area grow year on year as more charities focus on developing their future plans.

We know that charity leaders are facing challenges like never before. The immediate pressures of generating income, responding to rising demand, and workforce issues including recruitment, retention and wellbeing, can make it more difficult for leaders to think about longer term planning.

But in periods of change, challenge and uncertainty, we highly recommend investing in the development of a strategic plan, if you haven’t done so yet, or revisiting your strategy to ensure you’re on the right track.

Why strategy matters for small charities

A well-defined strategy provides a clear direction and focus. It acts as a roadmap, guiding your charity and staff towards your mission. It helps in setting clear objectives and prioritising activities that align with your core goals.

It can also help you to think about the future as a team, aligning views and building a shared understanding of the future. Looking ahead can be scary – but considering future possibilities ahead of time is important and reduces possible shocks or surprises.

Developing your business plan to deliver your strategy means that you’re planning the resources you need, and how to allocate them – finances, time and staff capacity. It will help to demonstrate to all your stakeholders that you’ve thought carefully about the future. It will give you materials to support fundraising and income generation activities, enhancing investability and potentially attracting more support.

Your plan also provides the milestones and ambitions to measure your performance against and helps you to evaluate your impact more clearly. By regularly assessing the activities you set out in your business plan and the outcomes, you can see what’s working, what isn’t, and why. This insight is crucial for continuous improvement and demonstrating success and impact to stakeholders, including your board and funders.

Practical steps for developing and reviewing your strategy

Start with your mission and vision

Start by setting out your charity’s:

• mission: what it aims to achieve

• vision: what the world would look like if it’s successful.

These statements provide a foundation for all strategic decisions, and help you develop the key activities against which you will evaluate your progress and performance, to demonstrate your impact.

Consider the external environment

Think about the environment you’re operating in:

• What’s happening?

• What are the main factors that affect the people or cause you support?

• What’s likely to happen over the next three to five years? Consider the risks, opportunities and demands.

Review what you aim to achieve in light of the challenges you face. Consider whether your ambitions are still the right ones for you to achieve your vision:

• Are your goals focused on your mission?

• How will you know whether you’re succeeding?

• What are the questions you need to ask, and the measures you’ll introduce that will show you whether you’re making progress?

Set your goals

Over a period of time that you feel is realistic, think about where you want to get to as an organisation, and what you will need in terms of resources when you’re there.  Outline no more than three to four big goals with targets and measures.

These might include some numbers – for example, how many people you want to support. They should also relate to feedback from and impact on those people – the difference you make to them.

Ensure your goals are:

• specific
• measurable
• achievable
• relevant
• time bound.

Develop action plans

Thinking about where you are now as an organisation, plan in detail what you need to do to move towards the position at the end of your plan. Action plans in each area underpin your development.

At present, financial planning – especially cashflow forecasting - is more important than ever in managing in an uncertain environment. As well as financial plans, people and resourcing plans to describe operations or service delivery, fundraising, stakeholder engagement and communications or marketing are important. Each area should have milestones and deliverables to help you and your colleagues understand and manage progress.

Taking time to develop this information can help you to build the detail of your business plan focused on the key things your organisation does and stands for, which you will monitor and measure as you make progress through the plan.

Take a look at Cranfield Trust’s questions to ask when developing your charity’s business plan, to help you update an existing plan, or write a plan from scratch. You might also find it helpful to watch our webinar on Organisational Resilience presented by Professor David Denyer from Cranfield School of Management. He talks about how, as leaders, we can cope with disruptive events, shocks and surprises.      

It's never been more challenging to lead a small charity. By investing time in your strategic thinking and business planning you’ll be taking a step towards a stronger future.

Take a look at our resource library where you will find an abundance of tools, techniques and advice to support you.