If you’ve been reading our blog over the past few years, you’ve probably noticed that we frequently borrow ideas from the business world and apply them to help nonprofits with their strategic planning. This month we’re talking about a basic business tool called a SWOT analysis. This is a simple exercise commonly taught in business and public administration courses. If the term is new to you, don’t worry. SWOT is just an acronym for Strengths, Weaknesses, Opportunities, and Threats.
To perform the analysis part, you’ll probably want to pull in some of your organization’s leaders. You’ll also need to get honest and realistic feedback from the field. The analysis itself is extremely easy, but remaining objective can be difficult. Because of this, some groups call in an outside expert. However, spending money on a consultant probably isn’t necessary unless your agency anticipates making some huge strategy changes. For this article, we’re assuming you’ll want to use a SWOT analysis as a way to keep your organization focused and moving forward, but not as a way to turn it on its head. The parts of the analysis are broken down piece by piece and explained below. It’s important to note that the first two parts (strengths and weaknesses) are internal, and the last two (opportunities and threats) are external.
Strengths
These are the areas, of course, in which your organization excels. What are your core competencies? Do you raise funds like crazy? Are you the only provider of a certain service within a region? Are you simply the best at something? Also, consider things like your reputation and history. The possibilities are endless. Look to both your statistics and “word on the street” as sources for determining your strengths.
Weaknesses
What aspects of your group could use improvement? Often you’ll find that your weaknesses are your strengths and vice versa. For instance, you might determine that a weakness is that you are understaffed. On the flip side, however, this may mean one of your strengths is that you have the lowest overhead of any organization in your area. Other weaknesses may include a difficult board, few resources, or a fuzzy view of the organization’s mission, to name a few. Remember to concentrate on objective feedback; make sure not to dwell on the negative.
Opportunities
You’ll want to look outside your own environment for clues to this piece. Is there an under-served population you can help? Perhaps there’s some grant money out there or a strategic partnership to be made. Consider all the possible resources you could reasonably obtain. These are your opportunities.
Threats
Once again, consider the landscape outside your four walls. Are there other agencies providing similar services? Is funding drying up? Is your volunteer retention rate slipping? Hopefully there are many more opportunities than threats. Nonprofits sometimes forget that there is competition in their sector. The race isn’t for profits but for resources. We’re not advocating a cut-throat approach; but, at the same time, it’s not an area to gloss over.
This explanation of the SWOT components should get you started on your analysis. Sitting down to talk about these four areas may shed new light on where your organization stands and compel you to take steps based on your findings. Next month we’ll discuss how to launch those plans of action by utilizing a strategic tool called a TOWS matrix.
