The Vital Connection Between Strategic Planning and a Board’s Fiduciary Responsibilities
One of the core fiduciary responsibilities of a nonprofit board is the duty of care. This duty requires board members to act thoughtfully, responsibly, and in the best interests of the organization in all their decision-making. If the organization were ever under legal scrutiny (which can happen!), a judge would apply the “business judgment rule” to evaluate the board’s actions. This rule doesn’t question the decision itself but focuses on how the decision was made. A well-documented, rigorous decision-making process demonstrates that the board acted in good faith, safeguarding both the organization and its mission.
Strategic planning is key to fulfilling this duty, empowering the board to shape the organization’s strategic direction effectively. However, this process must not occur in isolation. Meeting the duty of care requires a board to draw from diverse sources of relevant information. So, what sources are essential to guide high-level, mission-aligned decisions? Here are some of the critical inputs every nonprofit board should consider:
Staff Insights: Staff members bring invaluable, on-the-ground perspectives as they implement programs and engage directly with beneficiaries. Their expertise and daily experiences provide critical insights that shape realistic, effective strategic decisions. This is why including staff and board members as equal partners in strategic planning processes is essential.
Community Feedback: Input from community partners, program participants, and volunteers introduces multiple perspectives into the decision-making process. This feedback—often from individuals who understand community needs deeply or in ways board members may not—enriches and grounds strategic planning.
Evaluation Data: Past performance data allows the board to see what has worked, what hasn't, and where improvement is needed. This data-driven approach enables evidence-based decision-making, ensuring the board can build on successes and course-correct when necessary.
Research and External Resources: Staying informed about external factors, such as research on health disparities, housing challenges, or other social issues the organization addresses, provides essential context. This understanding helps the board align the organization’s mission with current needs, trends, and best practices.
By integrating insights from these sources, a board can fulfill its duty of care, leading the organization in a direction that optimizes resources and strengthens mission impact.
While strategic planning is indeed time-intensive, a well-facilitated, inclusive process reaps long-term benefits. Bringing in external facilitators, like The Nonprofit Strategy Group, can help ensure a balanced process that mitigates internal biases, equitably includes all perspectives, and eases the planning burden for both the board and staff.
With a wealth of experience in nonprofit strategic planning, The Nonprofit Strategy Group can guide your board in achieving a rigorous, informed planning process that aligns with fiduciary responsibilities and mission objectives. Ready to transform your strategic planning? Contact us today!