Strategy Template - Example Charity SWOT & PESTLE Analysis

A practical, 3 step guide and charity strategy template, including example charity PESTLE and SWOT analysis.  You can download strategy, SWOT and PESTLE templates to use, from within Charity Excellence and also assess your strategy in 30 mins using the strategy questionnaire, which will also connect you to lots of resources and free help.

Three Steps To Creating Your Charity Strategy, PESTLE And SWOT Analysis

We can't change what's happening in the outside world, but we can respond to the threats and exploit opportunities.  This charity strategy template gives you a simple 3 step process to use to create your charity's strategy, with worked examples to help you.

• Step 1 - PESTLE Analysis - identifying the key issues for your charity in the outside world.  PESTLE may be referred to as STEEPLE, or PEST.
• Step 2 - SWOT Analysis - bringing the outside world threats and opportunities together with your internal strengths and weaknesses to create your strategy.
• Step 3 - implementing your charity’s strategy to ensure it’s a success.

What The CEF Data Tells Us About The UK Charity Sector

The CEF Data Store tracks performance across the charity sector. Of the 21 top level indicators, 4 are at amber.  Sustainability and resilience will come as no surprise, but weak management of fundraising might.  The CEF doesn't measure the availability of funding, but how well we carry out fundraising.  With competition so challenging that offers charities a real opportunity to achieve more. Strategy is also at amber.

Charities report fundraising as the weakest of the 21 top level indicators.  Use Funding Finder, to find a huge range of grants and Help Finder to find lots of free fundraising support and also companies that make product/financial donations. There's also a fundraising online health check and 60+downloadable funder lists.

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STEP 1 - PESTLE Analysis For Charities

You cannot control the outside world, but you can respond to it.  PESTLE analysis is about looking outside your charity to identify risks and opportunities.  It is an acronym for Political, Economic, Sociological (Society), Technological, Legal and Environmental.  PESTLE analysis is the format most often used in the charity sector, but it is simply one of numerous frameworks.  You can download a template to use and a worked example from the strategy questionnaire.  The alternative STEEPLE, includes Ethical and there are others but these are just aids that provide a structure to use.  As with all strategy, it is the quality of thinking that matters, not the process, so do not be put off by the terminology.

What is a Charity PESTLE Analysis?

Do not worry too much about being exact about the headings, or which heading any factor goes into.  PESTLE analysis is an aid to thinking, not something to follow slavishly, but what does matter is that you identify all the key issues in the outside world for your charity.

Big changes in the outside world may seem a bit remote for your charity.  However, a global economic downturn would impact the UK and, ultimately, your finances.  Covid is another example.  However, it could be UK issues such as Brexit impacting our laws and supply chains.  But don't forget your local region and locally. A change in local politics, economics or major projects could have a substantial impact on you.  Nobody knows what will happen, so it's all a bit vague, but that's what PESTLE analysis is for.  It gives you a structure to think through and make the best estimates you are able to.

• Political - major issues that impact everyone, such as the outcome of the General election in 2024, but also priorities and policies that are directly relevant to your work.
• Economic - the impact of economic factors that may impact your charity and/or your beneficiaries, such as inflation driving cost increases.
• Sociological - Changes that affect society generally, such as the rise of home working , but may be geographical, such as the housing shortage in London, or that relate to your beneficiaries or mission.
• Technological - advances such as the ever growing number of social media platforms and the impact these may have on Society, such as the growth in online abuse and cyber-crime, or specific technological issues relating to the charity’s mission.
• Legal - wider implications, such as the possible impact on relevant UK laws post Brexit and also changes in laws directly impacting your charity, such as lobbying, employment, H&SW, safeguarding or environmental.
• Environmental - the impact of climate change on all of us and whether your charity is, or should be more environmentally aware.

How Do I Create A Charity PESTLE Analysis?

Don't Sweat The Detail.  Do not worry too much about being exact about the headings, or which heading any factor goes into. PESTLE analysis is an aid to thinking, not something to follow slavishly, but what does matter is that you identify all the key issues for your charity.

How To Do A Charity PESTLE Analysis.  Take each of the headings in turn and identify any potential factors that may impact your charity. These may be global, UK wide, regional or local. Do not worry about having factors for each heading and don't worry too much about which heading to put these under. That doesn't really matter. What matters is that you identify those external factors that are most likely to impact your charity.

What PESTLE Looks Like In Practice.  Fine in theory, but what does that look like in practice? Let's look at Covid.  The impact on service delivery and funding was sadly all too obvious. However, there were wider issues. It has had a disproportionate impact on the BAME and disabled communities, and lockdown made mental health challenges significantly worse and also led to an increase in domestic abuse.  More positively, new medical advances may benefit many in due course, the contribution of front line workers became more widely recognised and home working may have all sorts of benefits.  What do factors like these mean for your charity and what else is happening that matters to you?

Which Factors in a PESTLE Analysis Really Matter?  Once you have completed your PESTLE analysis, from the factors you have chosen, identify those that are most likely to be critical for you. These will be the Opportunities and Threats in your SWOT analysis.

Using Your PESTLE Analysis For Your Strategy

The factors above, may or may not impact on your charity and relevant strategic factors may be global, UK and/or local. And may be related.

For example, will the increasing focus on climate change or the outcome of the election, make your local council more willing to consider supporting your charity.

Or, it might be a new council leader with sympathy for your cause, or new facilities opening that you could use, or a major company moving into your area whose values fit with your work, or something else maybe?

There are always opportunities (and emerging risks) for those who look for them and they will be best placed to respond to these.

STEP 2 - Charity SWOT Analysis: Creating Your Strategy

There isn’t enough funding and there isn’t going to be.  Boards that act strategically to the emerging threats and opportunities, will be far more able to mitigate risk, and find new ways of working to increase their impact and use resources more effectively.

Strategy Planning Process

Strategy is about making the best decision you are able to, based on the best evidence you have.  It doesn’t have to be complicated, but you do need to have a logical, structured process, challenge positively, be prepared to think about new ways of doing things, take people with you and make decisions based on the available evidence.

We cannot control the events in the outside world, so effective strategy isn’t about deciding what we want to do, but rather understanding how that may impact your work, and focussing your resources to exploit the opportunities and mitigate the threats facing your charity.

Charity SWOT Analysis - External Threats & Opportunities

These are the O and T in your SWOT.  Your opportunities and threats are the key factors from your PESTLE analysis and, whether any factor is an opportunity or a threat, may depend on what you do about it.  The 2008 recession was a disaster for Tesco, but enabled Lidls to go from being a minor supermarket to a mainstream business.

Charity SWOT Analysis - Internal Strengths And Weaknesses

These are the S and W in your SWOT.  If you’re a trustee, download the CEF Board Bingo game for your next meeting to find out what yours are.

Strengths

We’re usually feel able to identify our strengths, but it’s always worth thinking through this.

• Known Strengths - We are really great at x, but might that be partly based on what we do that we personally value, rather than an actual strength? A case in point is that I know Scotland has the greatest football team on earth, despite the fact that (sadly) there isn’t a huge amount of evidence to support this.
• Unknown Strengths – Sometimes other capabilities that aren’t really thought of as strengths, might be very useful.  Perhaps something you've always taken for granted, or which has become important, because of what you've identified in your PESTLE.

Write down every strength you can think of, then test each in turn by asking yourself what measurable evidence do we have that demonstrates that to be the case?  Identify the key ones.

Weaknesses

Even the very best amongst us have weaknesses, but many find identifying these the most difficult aspect of strategy.  But, these are usually the best opportunities we have to achieve more.

Sector Weaknesses - The CEF Data Store aggregates all user data anonymously to create Big Data for the sector.  The metrics at amber are strategy, fundraising, sustainability and how realistic we are in our planning and target setting.  That is the majority of charities do not do these well.  Are you one of them?

Challenges - We have fantastic people, but people are often resistant to change and talking about ‘weaknesses’ almost always makes people react defensively.  I find that approaching this as looking for opportunities to achieve even more helps.  The very best organisations always celebrate their successes then ask - how might we do even better next time?

How Do I Use A Charity SWOT Analysis to Create a Strategy?

Bring your Strengths and Weaknesses together with you Opportunities and Threats to create your SWOT analysis. If you wish to, you could identify those that are particularly important or urgent. Then use this to create your strategy.   Watch this Charity Excellence ‘How To’ video (3 mins) for how to do your SWOT really well.

The image at the top of this resource is an example, which highlights those issues that are particularly important, or urgent.  The arrows show linkages that can be used to create a strategy.  For example:

• Using your strengths to exploit opportunities, and/or to;
• Address weakness, and/or to
• Mitigate/avoid threats.
• Or better still, could you turn a threat into an opportunity?

Assess your SWOT analysis and choose the best way forward for your charity - that's your strategy.  Decide what you will need to achieve in order to deliver your strategy.  These are your strategic objectives.  Use this Charity Excellence planning toolkit, template and checklist to create your strategic plan.  It can also be used for your annual business, fundraising or other plans.

STEP 3 - How Do I Implement My Charity Strategy?

Strategy isn’t a plan, it’s what a charity does and that involves everybody, ideally from the outset.  It’s important to engage people and turn your strategic plan into the timetable, budgets and  actions needed for them to deliver it and your progress to be monitored.

The World is full of detailed and beautifully crafted plans sitting on shelves gathering dust.  in any, except the smallest of charities, it is your staff and volunteers who will deliver your plan, so they need to know what you want them to do and feel motivated to do so.  Too often, that's no more than e mailing the strategy to everyone, which probably won't be read and, if it is, may not mean much to its readers.

You need to communicate your plan in a simple, clear way that engages them. It also needs to be reflected in any other plans or procedures. For example, your budget and risk plans, any project plans and, for larger charities, appraisal objectives and departmental work plans.

Whatever you do, don’t put it on the shelf and leave it there.

Fundraising Strategy Template

To create your fundraising SWOT analysis and strategy, use this template and guide.

Theory Of Change (ToC)

Strategy can be confused with Theory of Change.  These are similar and can support each other so, if you're thinking about incorporating ToC into your strategy, this Charity Excellence ToC resource enables you to understand what it is, how it works, how to do it and the key points on ToC.

Charity PESTLE, SWOT and Strategy FAQs

• What is a charity strategy.  A charity strategy brings together internal strengths and weaknesses with external opportunities and threats to create a longer-term plan to ensure your charity remains sustainable and delivers its charitable purposes.
• Who sets the strategic direction of a charity? Strategy is a key governance activity, and it is the trustees who must set the strategic direction for the charity.
• Who is responsible for charity strategy?  Trustees are ultimately responsible for strategy, although the planning is often carried out by the CEO and the involvement of staff and volunteers is key to delivering a successful strategy.
• What are the objectives of a charity strategy?  The objectives of a charity strategy are the key financial and non-financial objectives, in each year of your strategic plan, that you must deliver in order to achieve your overall strategy.
• What should a non profit strategic planning process include?  Non profit strategic planning should include an assessment of your internal strengths and weaknesses, external threats and opportunities and bring these together into a SWOT and a deliverable plan with objectives, including the resources and capabilities needed, financial projections and timelines and responsibilities.
• What is a SWOT analysis for charities?  A charity SWOT analysis brings your fundraising internal Strengths and Weaknesses together with your external Opportunities and Threats together to create your strategy.
• What is a PESTLE analysis for charities?  A charity PESTLE analysis looks outside your charity to identify risks and opportunities. It is an acronym for Political, Economic, Sociological (Society), Technological, Legal and Environmental which helps you think about and identify the key issues.
• What is the timeframe for a strategic plan?  The timeframe for a non profit strategic plan could be 10 years or more, but is more usually 3 to 5 years.  In recent years, there has been such huge uncertainty that strategic plans now tend to be closer to 3 years.
• What is a charity business plan?  A charity business plan (or annual or operations plan) is what a charity plans to deliver in the coming year, including objectives, milestones, timescales, resources allocated and who will be responsible for each.  Effectively, it's Year 1 of the charity's strategy.

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