The research completed also shows that both subjective and quantified approaches to strategic planning for externally-oriented nonprofits also tend to create this inferred ownership of the strategic plan, its goals, and therefore increase its probability of success. Clearly having an external focus with a "customer" who is to be served is a highly effective aspect of a nonprofits' strategic planning process. Crittenden & Crittenden (2000) also make the point that nonprofit organizations researched have both instrumental and expressive tendencies at the same time, a deliberate strategy taken to make sure that individual constituencies' goals and objectives are met. This hybrid approach to strategic planning requires a nonprofit organization to be highly agile, informal, and collaborative in its information and knowledge management. Assessing Strategic Planning in Nonprofit Organizations

The differences in the strategic planning of nonprofit organizations are significant compared to their for-profit counterparts. First, strategic planning in for-profit organizations typically centers on financial projections and analysis, including measures of Return on Investment (ROI), Return on Invested Capital (ROIC) and plans for capital expenditures to increase the earning capability of the for-profit organization. Second, nearly every for-profit organization has a structured strategic planning process that is based on external market forecasts and sales forecasts that strive to minimize the risk of relying on only a few dominant sources of revenue. It can be inferred from the research completed by Crittenden & Crittenden (2000) that nonprofits often find that one or two benefactors comprise the majority of their funding, and as a result can exert significant influence on the strategic planning process and priorities defined...

Third, the hybrid approach of using both subjective and quantified methods for strategic planning also exists in many for-profit organizations, yet increasingly the quantified projections are used as the basis of financial and costing projections that serve as the basis of subjective forecasting. Rarely do for-profit organizations rely purely on subjective strategic planning alone. Fourth, for-profit organizations by nature must be externally focused and continually monitoring the markets and customers they serve, the strategies of competitors, suppliers, channel partners, resellers and services organizations, and the broader pricing trends in their markets served. Nonprofits who are externally focused use the strategic plan to create ownership across their comparable partners and constituents, galvanizing all efforts to the service of their chosen missions and those in-need. Lastly, nonprofit organizations may not have the level of accountability for results and compliance to financial reporting standards that for-profit organizations do, and also may struggle to attract experienced leaders with strategic planning experience from the commercial sector. All of these differences in the strategic planning process for nonprofits underscore the need for continually having an external focus, selecting strategic objectives that can generate high levels of ownership internally, further reinforced by circulating the strategic plan for comments and approval, leading to the eventual accomplishment of both their strategic objectives and mission as an organization.
Reference:

Crittenden, William F; Victoria L, Crittenden (2000), Relationships between organizational characteristics and strategic planning processes in nonprofit organizations Journal of Managerial Issues; Summer 2000; 12, 2; ABI/INFORM Global…