Developing an Integrated Financial Strategy

In Strategic Planning by Lisa Selzler

This is the second in a two-part series. Click here to read part one.

Financial strategies meet organizations where they are (i.e. their strategic financial position on the Continuum of Financial Function) and help prepare them for their next level of success, whether that is greater efficiency, increased impact, or long-term sustainability.

A financial strategy is a powerful tool that helps organizations to better:

  • Understand the opportunities and challenges associated with their current financial position
  • Identify opportunities to increase operational efficiency
  • Align resources and spending with strategic priorities
  • Plan for immediate and near-term operational needs
  • Create more realistic programmatic and organizational development strategies

Developing a financial strategy requires three primary steps:

1. Identify: Where are we now?

First, analyze your current financial practices on the continuum and your overall current financial position relative to your levels of programming and your long-term commitments.

2. Define: Where are we going?

Next identify your key strategic goals for the future. For some organizations, these are 3-5 year goals while for others they may be 10-15+ year goals. After you know where you are heading, you can calculate the financial implications of those goals and specify which financial strategy use can use to garner the resources needed. I use a template like this for most of my clients.

3. Analyze: Can we get there from here?

Lastly, using that completed template I work with clients to identify where the strategic goals and the financial goals are or are not aligned and where they are unrealistic given the organizations current financial position. Sometimes, we also find that the strategic goals are less ambitious than what could be achieved given the organization’s financial situation.

Regardless of the results of this analysis, board and staff members now have better data to make both strategic and financial decisions on behalf of the organization. For organizations interested in being resilient and impactful regardless of external market changes, we recommend taking your strategy one step further and creating a comprehensive financial strategy.