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Strategic Planning – at the heart of successful Charities

1st October 2013

The Importance of the Strategic Business Planning Process!

Why bother with strategic planning?

Strategic Planning is the key for any charity to achieve sustainability and financial security, to make the charity relevant to its stakeholders and to ensure that the charity is best positioned for growth. If the trustees/governors have not given sufficient thought to the charity’s strengths and weaknesses it will not succeed, regardless of the validity of its activities.

Many trustees and governors believe they have a vision for the charity, but is it strategic?

Unfortunately having a strong vision is not enough. The trustees/governors need to have a very clear understanding of how the organization will achieve its aims, what internal and external resources are at its disposal and where the charity needs to focus its efforts in a constantly changing economic and political environment.

How can trustees justify investing charity resources in strategic planning when the money can be better spent at the front line?

Whilst trustees/governors have a duty to manage the charity’s finances prudently, it is critical that resources are used in the most efficient way. Effective governance needs to be put in place to ensure that front line staff and volunteers are properly supported in their work. Resources spent appropriately on properly channelled governance and strategic work will pay dividends for the charity, protecting not only the trustees/governors themselves but also the charity’s beneficiaries and staff.

Is this level of planning not just the preserve of the national charities?

All charities have to operate in a difficult and complex trading environment, where charities are not necessarily favoured over commercial companies. This is regardless of size. All trustees/governors have to ensure that they are looking ahead at least 3-5 years, rather than just dealing with day-to-day survival.

How do the trustees and their team find time to address these issues?

Because trustees/governors are usually unpaid and providing their time in a voluntary capacity, time is of the essence. However, trustees/governors should bear in mind that their role is to oversee and direct the charity, not necessarily to get involved in the day-to-day operations. If trustees/governors genuinely do not have time to address strategic issues, they are probably desperately in need of professional guidance.

Are trustees legally bound to have a strategic business plan?

Whilst there is no legal requirement to produce a business plan, trustees/governors are legally obliged to carry out formal risk analyses and to prepare an annual report for the regulator. This would be much simpler with a business plan in place.

To what extent are the financial people involved or leading this process, Auditors, Accountants, Finances Officers?

Financial advisers and staff have a role to play in advising and preparing financial information and projections. However, the responsibility for financial direction rests fully with the trustees/governors and they are the ultimate decision-makers. They should, however, bear in mind that auditors are under a legal obligation to report on anything in a charity’s finances that is of ‘material significance’

How can H3 Solictors make it happen for you?

H3 Solicitors can provide a tailored approach to effective governance and strategic planning for any size of charity, ranging from one-off advice on a particular issue through to a full mentoring programme. The aim is the development of a strategic business plan that will direct the trustees/governors through the challenges facing the charity. The tangible benefits will be a better understanding of stakeholders’ needs, enhanced confidence in the charity’s services, a better market position and an agreed route to financial sustainability and growth.

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