The board plays an important role in setting the vision, purpose and strategies of the organisation, helping the organisation understand these and adapting the direction or plans as appropriate.
It is critical to define clearly for an organisation:
- Why it exists
- What it does
- For whom it does things
- How it aims to do those things
- How it will measure its success
Answering these questions helps with clarity. Simple statements of purpose will help inform direction and strategy discussions.
The constitution of an NFP (and the objects in it) sets out things a board must do and take into account when it is considering these questions. Organisations should have a clearly articulated purpose with a complementary strategy, which has been endorsed by its board, to deliver that purpose.
Key functions of the board typically include:
- Determining the vision and purpose of the organisation
- Setting strategic organisational objectives aligned with the purpose
- Working with management of the organisation to develop a set of plans that align with the vision, purpose and strategic objectives
- Supporting management in its implementation of the plans
- Monitoring and evaluating the degree of success against these plans and objectives
A vision by its nature is usually aspirational. It sets out what the organisation wants to accomplish into the future, and should be something that inspires members, staff, volunteers, financial supporters and others.
Examples of vision statements include:
- “For Australians to have the best cardiovascular health in the world.” (Heart Foundation)
- “To be the leading authority in animal care and protection.” (RSPCA Australia)
- “To achieve a cancer-free future for the people of Western Australia.” (Cancer Council Western Australia)
- “To be Australia’s leading theatre company for young audiences.” (Jigsaw Theatre Company)
An organisation’s purpose can be described as “what the organisation will do with a view to realising its vision”.
Corresponding purpose statements to the above examples are:
- “To reduce suffering and death from heart, stroke and blood vessel disease in Australia.” (Heart Foundation)
- “To prevent cruelty to animals by actively promoting their care and protection.” (RSPCA Australia)
- To minimise the incidence and impact of cancer on our community through advocacy, research, education and by providing people affected by cancer with support to enhance their quality of life.” (Cancer Council Western Australia)
- “To create, produce and present new and original work that stirs the imagination of 4 to 18 year olds, tour nationally and internationally, and contribute to the cultural life of Canberra.” (Jigsaw Theatre Company)
Vision and statements of purpose go to the heart of many NFPs and as such they are often the product of a collaborative process involving considerable thought and debate. They typically involve discussions among board members, staff and possibly key external stakeholders (e.g. beneficiaries, financial supporters).
It is considered good practice to have an organisation’s vision, purpose, strategic goals and plans clearly articulated and outcomes measured in an appropriate and agreed way. However, many NFPs face challenges when attempting to define and measure success. Defining and measuring success can be very difficult conceptually for some NFPs as a result of the nature of their purpose and/or strategic objectives, and require refinement from time to time. For further discussion on performance measures see Principle 5.
It is necessary to periodically review (e.g. every 3-5 years) the organisation’s vision, purpose and strategies to determine whether they are still appropriate for the organisation or need amending. Occasionally purposes may be brought into question, for example, because they no longer align with reality, they are unmanageable because of their breadth, or they become impractical. Similarly, the validity of existing strategies may be brought into question, for example, as a result of goals achieved, changing external circumstances and/or in light of past experience.
Another key element of an organisation’s strategic planning is the values of the organisation. Values are discussed a little more in Principle 9, where the ‘culture’ of an organisation is examined.
Questions for consideration
- Have the vision and purpose of the NFP been well thought through, clearly articulated and set out in the organisation’s constitution or other binding charter of existence?
- Have the vision and purpose of the NFP been communicated throughout the organisation and among stakeholders?
- How frequently should the board review the NFP’s purpose and strategies to assure their continuing relevance and effectiveness?
- Does the strategic plan align with the NFP’s statement of purpose?
- Does the board accept responsibility for the manner in which the organisation is to deliver its purpose?
- Do all the NFP’s actions/activities align with its strategy?
- What actions can the board undertake to help ensure the organisation has a clear idea of its vision and purpose and that there is an appropriate set of strategies and plans designed to help achieve these?
- Does the board have time set aside in its yearly calendar for focused strategy development?
- Is strategy alignment considered as a factor in every board decision?
- Does management regularly report to the board on the progress of implementing the strategic plan?
Download the full Good Governance Principals and Guidelines for Not-for-Profit Organisations as a PDF.