By Salma Ravat, CEO, One Roof Leicester
In 2022 I undertook research on how small charities (income £25k – £1m) developed their strategy. This piece sets out what charities should do when developing a strategy, and what they should avoid, based on evidence from research and practice in the sector.
Developing a strategy is one of the most important tasks a charity can undertake. A clear and well-thought-out strategy helps charities set direction, make better decisions, and use limited resources wisely. Research shows that charities without a strategic plan often struggle to grow, lose focus, and in some cases risk closure. Yet my findings found many small charities found strategic planning difficult, confusing, or overwhelming.
What charities should do
1. Set a clear long-term direction
Charities should start by being clear about where they are going. A strategy should provide long-term direction and help the organisation achieve its goals. This means clearly setting out the charity’s mission, vision, and values, and ensuring these guide all strategic decisions.
For charities, success is measured by achieving social impact, not profit. A good strategy keeps the mission at the centre and translates it into clear objectives. This gives staff, trustees, and volunteers a shared understanding of priorities and purpose.
Trustees should lead this work. Their role is to set direction and ensure the charity remains focused on its purpose. Without strong trustee involvement, strategies are often weak or poorly used.
2. Understand the internal and external environment
Effective strategy is based on understanding. Charities should take time to understand both their internal situation and the wider environment they operate in.
Internally, this includes finances, staff capacity, volunteers, skills, systems, and current services. Externally, it includes funders, partners, service users, competitors, and wider social, economic, and political factors.
Using analysis tools can help structure this thinking. However, charities should aim to understand the issues, not just complete an exercise. The goal is insight, not paperwork.
3. Involve the right people
Charities should involve people beyond the trustee board and senior leaders. While trustees and CEOs must be central to the process, involving staff and other stakeholders can greatly improve the quality of the strategy.
Staff often understand operational challenges better than anyone. Volunteers and stakeholders can bring fresh perspectives and highlight risks or opportunities that leaders may overlook. Involvement also builds ownership, making the strategy easier to implement.
There is no single right way to involve people. Some charities use workshops, others use surveys or small working groups. What matters is creating space for meaningful input and dialogue.
4. Link strategy to delivery
A strategy should be practical and realistic. Charities should think about implementation from the start, not as a separate step.
This means setting clear goals, identifying actions, and being honest about resources. Time, money, and skills are often limited in small charities, so priorities must be realistic. A smaller number of achievable goals is better than an ambitious plan that cannot be delivered.
Strategy should guide everyday decisions and activities. It should help managers decide what to focus on and what to say no to. Planning without thinking about delivery often leads to frustration and wasted effort.
5. Monitor progress and review regularly
Strategy should not be treated as a one-off document. Charities should monitor progress and review their strategy regularly.
Monitoring helps charities understand what is working and what is not. It supports learning and accountability and helps demonstrate impact to funders and stakeholders. While many charities monitor performance, the frequency and quality of this varies widely.
Simple measures used consistently are often more effective than complex systems that are rarely reviewed. Regular review also allows charities to respond to change without losing strategic focus.
What charities should avoid
1. Avoid developing a strategy in isolation
One common mistake is developing a strategy with only one or two people involved. Strategies written by a single individual or a small group often lack buy-in and miss important insights.
Charities should avoid treating strategy as a private or technical exercise. Without wider involvement, staff may not understand or support the plan, making implementation difficult.
2. Avoid copying business approaches without adaptation
Many strategic tools come from the business world, and they can be useful for charities. However, charities should avoid applying them without adapting them to their mission and context.
Charities exist to create social value, not profit. Strategies that focus too heavily on financial measures or competition can distract from purpose. Tools should support mission delivery, not replace it.
3. Avoid relying on a single planning tool
Research shows that many small charities rely heavily on a basic SWOT analysis. Whilst this can be helpful, over-reliance on just one tool can limit understanding.
Charities should avoid treating any single tool as sufficient. Strategy requires a rounded view of the organisation and its environment. However, tools should support thinking, not replace it.
4. Avoid unrealistic or unfunded plans
Another common issue is developing strategies that assume more time, money, or capacity than the charity actually has. This can lead to plans that look impressive but are never delivered.
Charities should avoid setting goals without clear consideration of resources. Unrealistic strategies can demotivate staff and undermine confidence in leadership.
5. Avoid treating strategy as a static document
Finally, charities should avoid seeing strategy as something that is written, approved, and forgotten. The world changes, and strategies must be flexible.
Covid demonstrated how quickly circumstances can shift. Charities that treated their strategy as fixed struggled more than those who saw it as a living guide.
Conclusion
Developing a strategy is challenging, especially for small charities with limited resources. However, the risks of not having a strategy are significant. Lack of direction, poor decision-making, and even closure are real threats.
By setting a clear direction, understanding their context, involving people, planning for delivery, and reviewing progress, charities can develop strategies that genuinely support their mission. Equally important is avoiding common pitfalls that weaken strategy and limit impact.
A well-designed strategy does not guarantee success, but it greatly improves a charity’s ability to grow, adapt, and make a meaningful difference.