Business Strategy for Nonprofits
April 24, 2026 | By David M. Wagner
Over and over, I encounter nonprofits that equate “strategy” with “strategic planning.”
When they recognize that they need a clear strategy, they default to everyone’s favorite scapegoat: the 5-year strategic plan.
Don’t get me wrong – multi-year plans have their place and are essential for major organizational shifts and organizing long-term initiatives.
But much like building a house, creating a schedule of projects and tasks is meaningless without first laying a clear blueprint of what you’re building (as an organization).
Whether you call it your guiding vision, your mission, or your business strategy (I’ll use that term in this article), cultivating that blueprint is the key to aligning your team’s efforts.
Allow me to illustrate with two fictional examples – a (for-profit) retail chain and a (nonprofit) youth development organization.
Similar Goals, Parallel Paths
Let’s say that the leadership of both the retail chain and the nonprofit identify growth as a driving goal. That alone is a key part of their business strategies – not every organization seeks to grow.
They’ll measure success differently. The retail chain might focus on expanding revenues and profits. The nonprofit aims to reach more youth with their proven program, in the hopes of increasing emotional, social, and academic outcomes.
Here are some business strategies the retail chain’s leadership might consider to achieve their goals:
Expand physical footprint. The business may have data suggesting that there is an unmet demand for their products in other geographies and have the capital and infrastructure to build more stores.
Optimize high-performing locations. If the business already has a broad presence, it may have data showing that stores in some locations are more profitable than others. It can close under-performing stores, selectively build new stores, or expand product offerings in high-performing stores.
Drive more online sales. The business may find that its customers are just as or more comfortable buying their products online as in their physical stores and choose to focus marketing on increasing web traffic and sales.
Create new revenue streams. The retailer may find that it can leverage its existing footprint to create new sources of revenue, such as offering paid placements for manufacturers products, offering new add-on services in house, or leasing space to other retailers (like Kohl’s did with Sephora).
Sell products through other retailers. If the retailer creates its own products, it might grow its sales by allowing other retail chains to carry its product lines.
Acquire competing stores. “Acquisition” can take many different forms, but let’s say that the retailer considers buying a competing brand with its own presence – mainly in markets they haven’t reached yet – and converting those newly-acquired stores into their own brand.
Each of these business strategies has a parallel for the nonprofit youth development organization, whose leadership might weigh whether to:
Expand existing programs. If the nonprofit sees unmet demand for its programs and has the resources (or funders) available, it might invest in additional staff to deliver its programs to more youth.
Optimize program offerings. Perhaps some programs achieve better results, are less expensive to deliver, or better fit their unique capabilities than others. The nonprofit might reduce or end some programs to focus more resources on growing others.
Shift its program delivery model. Just as the retailer considered moving more of its sales online, the nonprofit may find that there are web-based delivery mechanisms for its programs are both effective and more scalable (to reach more youth) than in-person delivery.
Modify revenue sources. The nonprofit might discover that its programs are well-suited to different contract structures, grant opportunities, fee-for-service models, or corporate sponsorships than currently in place, and seek to diversify or shift how it pays for its programs.
License or teach their program model. A bit like the retailer selling its wares through other stores, the nonprofit may find that organizations are interested in replicating their programs. By licensing or teaching their system, the nonprofit can reach far more youth through other organizations.
Partner with other organizations. Again, “partnering” can take many forms, including merging with other nonprofits whose programs complement their own or who reach populations the youth development organization does not currently serve.
Why Choosing Strategy Matters
Each business strategy outlined above describes a very different approach to accomplishing the same overarching goal.
Some strategies might make sense to pursue in parallel; others would conflict with each other, or at least drive internal competition for limited leadership time and financial resources.
Note the connections to strategic planning: you can’t make a plan without clarifying your strategy first.
Often the process of clarifying your business strategy will highlight changes you need to make – those changes will be focus of the initiatives in your strategic plan. Other times, the process reaffirms what your organization is already doing (but never wrote down). In those cases, you may not need a new plan.
Choosing your strategy means weighing many different factors. But far more important than picking the “right” strategy is picking a strategy, communicating it clearly to your whole team, and focusing your resources on the path you’ve chosen. And when you need help weighing your options or getting your team on the same page, come chat with me – I’m happy to partner with you to clarify your path to growth.