Almost twenty percent of employees in Canada work for non-profits, including governmental organizations. A study conducted by Johns Hopkins University in 2013 shows that in eight countries, including Canada, US, Australia and Japan, the non-profit sector grew more than the total economy. In Canada, specifically, the nonprofit sector grew by 6.4% compared to 5.6% of total growth in GDP. The same study shows that non-profit (paid) employees contributed to 7.1% of total Canadian GDP. Volunteers included, contribution amounts to 8.1%.
Interestingly, setting goals and measuring them for businesses could be more straightforward than for non-profits. That is because the ultimate goals for businesses are selling more to target customers, and making the highest profits for shareholders. In addition, the same person who pays, receives the value, and the person who invests has the clear intention of profiting from his/her investment. In non-profits, interactions, transactions, and intentions are not as straightforward and clear.
In a non-profit, the person who pays for the service to be rendered is not necessarily the same person who receives the benefit. Non-profits do not have investors. The donors, who fund the non-profit, do not contribute in hopes of future gain and growth in their investment. They have other intentions; they might donate simply because they value the cause, because of taxing reasons, regulatory obligations, or sometimes for personal (political or other) interests. I would categorize the impact of these complexities on the strategic planning in two folds: 1) multitude of clients with different interests and priorities, and 2) loyalty to mission without being influenced by the interests of specific groups or individual donors. It should also be heavily considered that the less concerned a non-profit is with fundraising, the more it can focus on the fulfillment of its promise to the community.
Non-profits have a multitude of customers, who should all be kept satisfied at the same time, or else the organization cannot survive. These customers (or as they are called for non-profits, clients) include donors, program participants, volunteers (including staff who offer their services for free or at a considerable discount), and the public or –to be more specific- the beneficiaries.
Each customer group is a totally different demographic, with very different needs and priorities. So, goal congruence among the very different stakeholders is key to survive, while remaining legitimate, accountable and ethical. Non-profit leaders need to: 1) remain loyal to their mission by offering promised services to their beneficiaries, 2) keeping their participants involved by offering interesting, decent and engaging activities and services, 3) raise funds by determining the interests and priorities of their donors, and 4) retain the most valuable staff and volunteers to achieve their goals. This should all be conducted at the LOWEST COST, and in the most efficient way. Therefore, innovation, creativity and learning become the inseparable and inevitable elements to the successful orchestration and growth of a non-profit.
The common notion that strategic planning is not essential to non-profits, simply because they do not need to be profitable, is totally wrong. Quite the opposite, non-profits are in much more severe need to follow a very well-thought strategic plan. Such plan should reconcile the (sometimes conflicting) goals and objectives of very different stakeholders, establish the most innovative and keen methods of fundraising, offer the most efficient operational approaches, and attract and retain the most valuable, knowledgeable and dedicated resources. Yet, and to make the tasks even more arduous, all these contradicting assignments should be fulfilled without compromising the mission and objectives of the organization.