Strategic Investment Budget: The Final (and most important) Component of a Strategic Plan

Strategic planning has become ubiquitous. However, those words mean different things to different

people. If you asked 10 people to describe strategic planning, you would likely hear 10 different things. I have seen many plans include objectives like “develop a marketing plan” or “develop a fundraising plan.” If these activities are not specifically articulated, then your plan is not complete.

Moreover, while it might sound impressive to say that your organization has a strategic plan if it doesn’t include a strategic investment budget, it is likely to “sit on the shelf.” Conversely, taking the time to create and fund a strategic investment budget are critical success factors in effective plan


What is a strategic investment budget?

A strategic investment budget is the summary of the human, capital, and operating resources

associated with implementing your strategic plan that is not currently in your typical operating

budget over the life of the plan.

Developing a strategic investment budget is not difficult, but it does take some time and effort. Many leadership teams resist the exercise because they live in a “we can’t afford it anyway” mindset. I once worked with a team that argued through several meetings that it was a waste of time to develop a strategic investment budget because they didn’t believe they could raise the money to fund it. Ironically, in the time they spent arguing about not wanting to work on the budget they could have had much of it completed. The biggest hurdle is challenging your assumptions and believing that you can “take your organization to the next level.”

Here are the steps:

1. Identify new programs or enhancement ideas. Research best practices to determine how

innovative your approach is (or will be) and articulate the expected outcomes and impact.

2. Complete a process cost analysis of the time it takes to develop and implement the new

program or enhancements. Be specific and calculate hours, costs per hour and total cost.

3. Research equipment and/or capital costs. If you need renovations or building enhancements,

talk to a contractor and ballpark costs.

4. Develop a spreadsheet that outlines all of the costs over however many years you anticipate it

will take to implement. This is typically 2 to 3 years but could be 3 to 5 or longer if major capital

investment is involved. Add up the total.

5. Take a deep breath, especially if you are shocked and frightened by the numbers you see.

6. Calculate the “return on investment.” If you actually invest these resources and develop these

programs, how many people will be impacted and how? This begins to build your “case for


In my story above, when the team finally (though reluctantly) completed the strategic investment

budget, they ultimately made a case for support to raise $4 million of strategic investment funding over the next three years and successfully implemented the innovative strategies they had envisioned in their plan.

As Margaret Mead said, “never doubt that a small group of committed citizens can change the world, because, indeed, it is the only thing that ever has.” The strategic investment budget is your roadmap to that successful future, and no plan is complete without it. Once you complete your budget, if you find that you need to raise money to implement the plan, the best thing you can do is talk to fundraising counsel, your banker, or potential investors. Give us a call to help you through this process or educate your staff and board about how to build a fundraising plan

around your strategic investment budget needs.

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