Contrary to its public perception as a sleepy and antiquated industry, the nonprofit space is a fast-paced world brimming with energy and potential. And it’s important to routinely ask the questions: “How are we doing? And where do we go from here?” A SWOT analysis is a great tool to guide any team through this process. It’s not about blame or uncovering failings; it is about creating future success.
“Strength is not born from strength. Strength can be born only from weakness. So be glad of your weaknesses now, they are the beginnings of your strength.” – Claire Weekes
What is a SWOT Analysis and Why Do One?
A SWOT analysis (SWOT = Strengths, Weaknesses, Opportunities, Threats) is a strategic planning tool used to assess an organization’s internal and external environment. While made popular among for profit businesses, it is a valuable tool for any organization, including nonprofits. “Not for profit” is not the same as “for loss,” after all.
A SWOT analysis helps to identify opportunities for growth and impact, and anticipate and mitigate potential threats. It also provides a mechanism to identify opportunities for growth and development, and make informed decisions about how to allocate resources and prioritize efforts.
Asking an Expert
We sat down with Nonprofit Development and Management Consultant Jessica Scheer to discuss the SWOT analysis in a webinar. She shared that a SWOT analysis “provides insight to align your professional goals with the needs of your team and organization.” Not only does it take into account the views of multiple and diverse stakeholders, but it helps to create buy-in and, sometimes, even results in literal buy-in. As stakeholders feel more connected to your organization, they have a higher affinity and may even increase their giving.
Elements of a SWOT Analysis
So, what is meant by strengths, weaknesses, opportunities, and threats?
The internal factors that give an organization an advantage over its competitors. These can include things like: a strong brand, a talented team, or a unique vision. In the nonprofit context, strengths may include things like: a dedicated network of volunteers, a strong group of recurring donors, and/or a successful track record of mission impact.
The internal factors that may hinder an organization’s ability to achieve its goals. These can include things like: a lack of resources, a lack of expertise or experience, turnover, or poor internal processes. For a nonprofit in particular, weaknesses may include: a limited budget, a small staff, a lack of visibility in the community, poor digital presence, and/or outdated fundraising tools.
External factors that may present new opportunities for an organization to grow or improve. Changes in the market, new technologies, partnerships with other organizations, grant opportunities, and more efficient digital systems ; these are all examples of potential opportunities for growth, and therefore, increased impact.
External factors that may pose a risk or challenge to an organization. Threats can be minor, like a negative comment on social media, or they can be major, like an economic downturn or a global pandemic. Other examples include: strengthened or new competition, decreases in funding, changes in laws or regulations that impact the organization’s mission, or the emergence of new organizations that provide similar services.
If at this stage you’re thinking something like: “wait a second, strengths sound like potential weaknesses and weaknesses seem like they are also threats, but threats are opportunities,” don’t worry – you’re not alone. The overlap in SWOT categories is palpable. But this false dichotomy is powerful, for nothing identified in your SWOT can exist without being in opposition to another path.
Limitations of a SWOT Analysis
While a SWOT is a useful tool, it does have limitations. A SWOT analysis:
- Relies on subjective judgment: As in all things, a SWOT is only as good as the data that goes into it. Garbage in, garbage out. Information is often subjective and prone to bias.
- May not consider external, unknown factors: Your team and your volunteers only know what they know. SWOTs can result in data that reflect the lived experiences of a relatively small group and ignore a broader context.
- May not identify root causes: A SWOT analysis may identify problems or issues, but it does not necessarily identify the root causes of those problems. Diligent follow up is key. A SWOT analysis for appearances’ sake is unproductive.
- May not provide solutions: A SWOT analysis is a diagnostic tool, not a solution generator. It can identify problems and opportunities, but it does not provide solutions for how to address those issues.
- Can be time-consuming: Conducting a thorough SWOT analysis can be time-consuming. This is true especially if you are trying to gather data from a large organization or from external sources.
Overall, a SWOT analysis is a useful tool for assessing an organization or situation. But it should be used in conjunction with other tools and approaches to get a complete picture.
How to do a SWOT as a Nonprofit: Step by Step
To use the SWOT tool as a nonprofit, follow these steps:
1. Gather input from stakeholders
To get a complete and accurate picture of the organization, it’s important to gather input from a variety of stakeholders. This can include administration staff, front-line staff, board members, volunteers, donors, the population you serve, peer organizations. These stakeholders may have different perspectives on the organization’s strengths, weaknesses, opportunities, and threats. Their input can help provide a more complete and accurate assessment. This is best done in small groups so as to encourage honest feedback. A World Cafe method works well.
2. Identify strengths
Start by brainstorming a list of the organization’s strengths. These could include things like: a strong brand or reputation, a dedicated and skilled staff, a diverse and engaged board, a strong fundraising base, or a unique program or service offering.
3. Identify weaknesses
Next, consider the areas where the organization may be lacking or struggling. These could include things like: limited resources, outdated technology or systems, a lack of diversity or inclusivity, or a lack of clear goals or strategy.
4. Identify opportunities
Think about the external factors that could present opportunities for the organization to grow and achieve its mission. These could include things like: new funding opportunities, changes in the political landscape, and a shift in societal attitudes. Partnerships or collaborations with other organizations can also fall into this category.
5. Identify threats
Finally, consider the external factors that could present threats or challenges to the organization. These could include things like: competition for funding or resources, changes in laws or regulations, and shifts in the economy or market. This could also include new technologies or approaches that could disrupt the organization’s current operations.
How to take action from your SWOT
After completing a SWOT analysis, you can use the information gathered to make informed decisions about the direction of your organization. Here are some steps you can follow:
1. Identify the key issues
Look at the list of strengths, weaknesses, opportunities, and threats you have identified; try to identify any patterns or common themes. This will help you prioritize the issues you need to address.
2. Generate options
For each key issue, come up with a list of potential solutions or strategies. Be creative and consider a wide range of options.
3. Evaluate the options
Consider the potential impact of each option on the organization’s strengths, weaknesses, opportunities, and threats. This will help you determine which options are most likely to be successful.
4. Select the best options
Choose the options that are most likely to help you achieve your objectives and address the key issues you identified.
5. Implement the chosen options
Develop a plan for implementing the chosen options and assign responsibility for each task.
6. Monitor and review
Monitor the progress of your chosen options and make any necessary adjustments. It’s important to regularly review the effectiveness of your chosen options and make changes as needed.
Once you have identified strengths, weaknesses, opportunities, and threats, the next step is to analyze them and create actions and philosophies. Write everything down and begin to organize feedback into categories – themes will emerge. This helps in developing a plan for addressing your organization’s weaknesses, capitalizing on your strengths, and seizing opportunities for growth and impact. Use SMART goals to ensure your plan is achievable – and make sure to involve those responsible for doing the work in setting these plans.
For example, if your organization has a strong fundraising base but limited resources for donor outreach, you may prioritize finding ways to increase efficiency and stretch resources further. Solutions like CauseVox are tremendous for this purpose. If you have strong digital systems but limited visibility, you may prioritize marketing and public relations efforts to increase awareness and engagement.
It’s also important to regularly review and update your organization’s SWOT analysis to ensure that it remains relevant and accurate. As the organization’s goals and priorities evolve, so too should its self-assessment. Every nonprofit is different, and so the necessary cadence is different for every group. Aim to complete a SWOT at least annually; lean on a SWOT as a tactic to find direction anytime you feel lost.
And in the meantime, keep seeking nonprofit resources and community!
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