Nonprofit SWOT Analysis: A Strategic Management Tool
In the nonprofit sector, there is a finite number of donors and a limited amount of money destined for organizations. So, how can you lead the pack and attract more donors? You work on effective branding, messaging, programs, staffing, and essential things a nonprofit organization needs to make positive change. And then you’re done, right? Not so fast. A nonprofit SWOT analysis can help you become the organization that figures out how to strategically reach and manage its donors.
It’s time to take an honest look at your organization to see what’s working and what could be better. It’s time for a SWOT analysis.
What is a SWOT Analysis?
SWOT Analysis is a straightforward technique that lets you examine your nonprofit’s Strengths, Weaknesses, Opportunities, and Threats. It’s a relatively easy way to dig down deep into your nonprofit’s operations and ferret out the truth, allowing you to determine just how effectively you’re working.
Strengths are advantages that you have over your competition internally at your organization. Access to a large community of rabid supporters, celebrity endorsement, or especially skilled staff is all internal strength.
Weaknesses are shortcomings within your organization that may impact your ability to compete. Poor organizational structure, vacant key staff positions, and limited budgets are weaknesses.
Opportunities are external situations of which your organization can take advantage. Being able to spot and exploit opportunities can make a massive difference to your nonprofit’s growth.
Threats are external situations that could negatively impact your organization. Changes to laws or regulations in your region, economic recessions, rising taxes, even changes to social media platforms could be threats. Threats are often completely outside of your control.
The critical thing to remember is that strengths and weaknesses are internal factors and opportunities and threats are external situations.
Why Your Nonprofit Needs a SWOT Analysis?
SWOT Analysis lets you look critically at your organization and how it is performing. By breaking your operations down strategically and honestly examining the various parts, you can get a clearer picture of how you’re doing compared to others.
Some other things that SWOT Analysis can help you with include:
- Postmortems – evaluate what has worked, what hasn’t, and why
- Goal setting and identifying the tactics and tools needed to reach those goals
- Annual strategic planning
- Aligning your team around a unified strategy
Before you get going on your analysis, it’s a good idea to make some decisions on timing. If your organization typically plans annually, you may be able to conduct a SWOT Analysis as part of your planning sessions.
However, you may find it more useful to analyze before and after new programs or campaigns, or before making significant decisions, when information is fresh in your staff’s minds and ready to be applied to enhance your next program.
How to Conduct a SWOT Analysis
Fortunately, you don’t need much to perform a SWOT analysis, which is a boon for cash-strapped and time-crunched organizations. A computer is a nice thing to have, but you can get away with a legal pad, a pencil, and a calculator in a pinch.
And you’ll want coffee. Probably a lot of coffee.
Start by determining what you’re analyzing: a program, a campaign, your nonprofit marketing strategy, or maybe a new business venture. Don’t be afraid to start small until you get the hang of it—trying to analyze your entire business could spiral out of control pretty quickly.
Next, list out everything you can think of that will affect the outcome. If you’re doing your analysis as a retrospective, list the factors contributing to your success or failure. Interview staff, hold a brainstorming session, whatever it takes to get to the core issues.
As you come up with factors, fill them in on a matrix like the one shown here. Try to list three to five items per category to prevent your lists from being too short or too long. Two items aren’t going to give you much to work toward; a hundred items will be overwhelming.
Last, it’s time to create an action plan. Which of your identified weaknesses can you resolve? Will any of your strengths help to mitigate upcoming threats? How can your organization take advantage of current opportunities?
Determine what needs to change to keep your organization moving forward, then attach action items (like hiring new staff, tightening the budget, expanding into a new donor group) and a timeline to ensure you and your team stay accountable. And don’t forget to include the next SWOT Analysis on your timeline too.
Interested in having a realistic look at how a nonprofit SWOT Analysis is done? Get our SWOT Analysis worksheet here.
6 Tips for Creating an Effective Analysis
Even though a SWOT Analysis for nonprofit organizations is a reasonably simple task, there are some things to watch out for during the process.
1. Go Deep
When you’ve identified an item to include in your analysis, don’t just write it down and move on. Go deep. Figure out the cause. Determine why it’s happening. How is it affecting your business?
Having an extended discussion about your analysis may reveal more elements or decisions you need to make. You may discover that one of your strengths has already mitigated an impending threat.
2. Seek Out Different Perspectives
Listen, I’m sure you have good ideas. But you can’t possibly have thought of everything, right?
Make your analysis a group exercise and get your whole team to contribute. Each member of your team sees your organization in a different light, so one person’s strength may be another person’s weakness. Remember, you’re looking for truth, not consensus. And on that note…
3. Be Honest
You’re not trying to impress your board, donors, or staff; you’re trying to get to the very foundation of your organization and learn what makes it work (or not). So don’t sugarcoat or apologize for the factors that make it into your SWOT Analysis.
Instead, stay focussed on how to capitalize on strengths and external opportunities, resolve your weaknesses, and avoid any threats coming your way.
4. Don’t Rush
It might be hard to think about doing a SWOT Analysis only to realize that one of your weaknesses is not having enough time in a day to get all your tasks done. But think about this exercise as an investment that will save you time and money later on.
Your SWOT Analysis may help you avoid wasting resources on programs that won’t work, ineffective strategies, or campaigns that make heavy demands on your budget. So be methodical and take the time to be thorough.
5. Make Friends with Numbers
Hunches are for hard-bitten detectives. Gut feelings are for sweaty stock brokers. Numbers are your best friend. If possible, attach numbers and data to the factors that you include in your SWOT Analysis.
If you think your Facebook ad campaign isn’t working, get the numbers to back it up. If it seems like you’re losing money and can’t explain where it’s going, it’s time for your accountant to earn their paycheck. It’s easier to build a case for fixing something when you can compare numbers, especially year-over-year.
6. Think Different
Yes, I stole an Apple slogan from the 90s for this. But it’s a good idea to keep in mind. Sometimes one of your factors may seem like one thing, but from a different angle, it’s something else entirely.
Take an ever-growing global pandemic, just for example. While it is threatening, if looked at differently, a pandemic that forces all kinds of traditional businesses, educational institutions, governments, and older people onto the web may be an opportunity for a scrappy, tech-enabled nonprofit like yours to reach a bigger audience.
So start planning your nonprofit SWOT Analysis today. The sooner you can see the truth at the foundation of your nonprofit, the sooner your organization starts to overcome its weaknesses and threats, doing even more good for the world.