3.2 Strategy and success

At a glance

About 35 minutes, including a 15-minute reading. By the end of this lesson you will be able to

• explain what management and strategic management mean in a nonprofit

• describe four ways organizations relate to change

• discuss how nonprofit leaders judge success

During Nepal's COVID-19 restrictions, an NGO may have faced rising demand, uncertain funding and limits on movement at the same time. Accountability identifies whose needs and expectations deserve attention; strategy turns that answer into choices. Should the organization wait, adjust gradually, redesign its work early or follow whichever activities funders support?

Management as value creation

Management coordinates people and resources so that the organization can pursue its mission. If the mission is to help homeless people find paid work, choices about staffing, partnerships and spending should contribute to that aim within the board's guidelines. Managers also decide what the organization will leave undone. No single method fits every mission or environment.

Strategic management

Day-to-day management keeps the organization working. Strategic management connects those daily choices to a longer view of where the organization is going and how its environment is changing.

Strategic management is how organizations set their long-term vision, direction, programs and performance. It looks inward at the whole organization, including its mission, structure, revenue and stakeholders. It looks outward at the organization's position in the wider field. And it looks forward, anticipating conditions in the medium to long term and the changes the organization will need to make. A common starting tool is a SWOT analysis of the organization's strengths, weaknesses, opportunities and threats.

Four ways of relating to change

Figure. The four responses differ in how deliberately and how early an organization recognizes change. “Environmentally determined” describes drift rather than a planned strategy.

Organizations differ in how they relate to change. Proactive organizations scan their environment to anticipate change. Adaptive ones notice change and adjust step by step. Reactive ones are hit by changes they did not foresee, sometimes falling into crisis, and respond afterwards. In environmentally determined change, an organization drifts with its environment without any conscious decision. Strategic management aims to move organizations toward the proactive end.

How do nonprofit leaders judge success?

A deliberate response to change is not automatically a successful one. We therefore need to ask what evidence leaders use when they look back on their choices.

Florentine Maier and colleagues analyzed 2,222 responses from leaders of 861 nonprofits in Vienna, Shenzhen and the San Francisco Bay Area. Their framework asks two questions. Is the sign of success mainly internal or external to the organization? Does it concern actions and results, or relationships?

Leaders mentioned familiar indicators such as mission achievement, resources and external reputation. They also emphasized two areas that research often overlooks: cohesion and inclusion inside the organization, and whether outside stakeholders actually take up its services or opportunities. A balanced assessment therefore combines results with relationships rather than reducing success to one number.

Example. Responding to COVID-19 in Nepal

When COVID-19 reached Nepal in 2020, many NGOs had to change course quickly, moving to relief work and remote activities while their funding was uncertain (KC and Bhandari, 2021). Organizations with flexible plans and close ties to communities could adapt, while others could only react.

Read

Maier, F., Zheng, W., Brandtner, C., & Cornips, L. (2025). The many indicators of nonprofit success as seen by nonprofit leaders. Nonprofit Management and Leadership, 35(4), 751-763. https://doi.org/10.1002/nml.21641

The article is free to read. Focus on the introduction and the findings. Note the two indicators leaders add, and think about how the organization you are studying could measure them.

Try it

Read each case as a decision unfolding over time. Which way of relating to change does it show, and what evidence would you later seek to judge whether the response worked? Then open the answers.

1. An NGO follows a draft law on foreign funding closely and finds new local donors before the law passes.

2. After funders move to online reporting, an NGO trains its staff in digital tools over the following year.

3. A sudden funding cut forces an NGO to close a program and lay off staff within a month.

4. Over several years, an NGO's programs shift toward whatever the local government funds, without anyone deciding to change course.

Key takeaway

Strategy is the deliberate link between mission, accountability and change. A strong assessment then looks beyond immediate outputs to ask whether the organization achieved useful results, sustained important relationships and remained cohesive and inclusive inside.