Level x Ethos: Strategic and Financial Planning for Associations
Nonprofits - Strategic Planning - 10 min read
When strategic and financial planning run in harness, associations create space for innovation and enduring impact.
Associations carry a unique complexity. Three distinct bodies handle strategy and execution separately (board, paid staff, and committees). Board leadership turns over fast, often every two years. And membership needs and wants continuously evolve, as the issues members care about gain and lose regulatory pressure.
What shouldn't be complex is the relationship between strategic and financial planning. Teams know their executive director or CEO and CFO should talk more consistently, and that finance can be a huge boon to strategic planning. Yet we still see these 'partners' functioning in silos all the time.
So we sat down to talk it out with one of our go-to voices on association strategy and transformation, Lindsey K. Nelson, MBA, CAE, of Ethos Advisors. Ethos is a strategic consulting firm with a deep client roster across the association vertical. Level CFOs Kim Stanley and Sarah Jordan found common ground with Lindsey on the relationship between strategic and financial planning, and some productive disagreement too—the ingredients of a partnership that genuinely works.
Read on to learn:
How to put a strategic plan into action, rather than letting it sit on the shelf
How the finance arm operationalizes the strategic plan
How to fix siloed strategic and financial planning processes
And how to do it in a way that builds trust and transparency within the association's unique context.
What Makes a Great Strategic Plan for an Association
What's one habit or ritual that you build immediately upon beginning an engagement with an association?
LINDSEY: Listening sessions. They orient me to the spirit of the team and help me learn what's working well and where friction exists. I talk to boards, key stakeholders, and staff alike. These are casual conversations that help me understand the context of your association, beyond what I can gather from your website. To start my work, I need to understand your everyday experience and culture, not just what's in the books.
Kim: We begin similarly at Level. I like asking about the soft stuff, especially the relationship between the executive director and the board. Will I be rebuilding trust between a director and a board? Or stepping into an already well-functioning relationship that just needs advanced financial modeling and vision casting? The nature of that relationship shapes my approach, and sometimes the scope of work too.
Sarah: Don't forget committees. If an association has a strong committee framework, those teams and leaders offer real contextual insight. This also makes associations unique—every organization, even publicly traded for-profits, has a leadership team and staff who do the work, likely a board too. But associations often have this third operational arm, utilized variously across operations. I always find it helpful to understand how these three entities work together.
Lindsey: Many associations sit somewhere on this spectrum—board led, volunteer led, or staff led. Where they sit tells you a lot about how they function. And shifting that position is a sticky strategic problem to solve—it touches almost every piece of day-to-day operations.
What's the difference between a strategic plan that gets put in place, and one that sits neglected in a drive?
LINDSEY: This is a great question, with many possible answers. On the whole, a good strategic plan pushes an association beyond where it is today, toward what it'll need to thrive in the future. It should look forward at least three years, rooted in a clear, actionable vision.
The plan should look past the present and take a critical view of the status quo: what needs to continue, and what needs to be sunsetted to make room for something new?
Finally, the plan has to be delivered in a way that outlasts the meeting. Anyone can hire a consultant to lead a planning session and put something on paper—the harder part is turning intention into reality, something we say a lot at Ethos. A good plan comes with a framework for setting itself in motion. Otherwise, it just feels daunting, or gets shelved.
Whatever your goal—a new footprint, say, or a new member service—the planning exercise should help you prioritize, with real discipline, how much effort, resources, and time to give it. It's fun to dream big, but the strategic plan is the first step toward making dreams real. Without it, the dream just dies.
SARAH: I'll underline, copy, and paste everything Lindsey just said. On the finance and operations side, I love strategic plans that get really specific—clear objectives, processes, timelines, and metrics for success. When that specificity exists, I can start pressure testing those assumptions in the financial models to put the right resources in place.
I'll give readers a template to get started: Over the next five years, we want to grow x revenue from educator memberships in x region, through strategic partnerships with a, b, c, and coordinated membership drive campaigns including d, e, f.
One challenge with associations is that your board is a group of volunteers with day jobs. To justify asking them to invest real energy into a new initiative, you need a crystal-clear strategic plan with strong financial modeling. That's the only way to get buy-in. It's non-negotiable.
KIM: To expand on boards and strategic planning: associations that get this relationship right draw a line in the sand, during the planning process itself, between what the board owns and what the paid team owns. Nothing makes executing a high-level strategy harder than everyone getting pulled down into the weeds.
One mark of a great strategy is that your team only needs to tweak it year over year, rather than starting from scratch. Strategic planning is a three-to-five year exercise, and it sets the foundation for everything that follows, especially the budget. The budget is how you operationalize your strategy—if the strategy is sound, that part gets easier too. I say this knowing so many of you are about to enter fall budgeting season: make sure your budget translates the current strategic roadmap into numbers and line items. Don't just add 5% and call it a day.
LINDSEY: Let me share a few first principles for board orientation that help draw that line in the sand:
One: board orientation should be in person if at all possible. Don't make it an hour-long webinar—make it a full-day experience built around relationship, not job training. Include staff in the room too, beyond the executive director, so board members can see the expertise running the organization. That's the first building block of sustained trust.
Two: orient them to the org chart. Make clear that the board has one employee—the executive director. That's it. That's the only person they get open access to, and the only person they evaluate, hire, and fire. That keeps their focus high-level, rather than in the weeds with staff.
SARAH: It goes both ways too. The board sets expectations for the executive director, but the director also sets expectations with the board around culture, process, and roles. That way, when there's an inevitable overstep or out-of-process request, the fix is easy—everyone just reorients around those expectations, rather than letting small cuts turn into longstanding breaches of trust.
The Fix for Siloed Strategy and Budgeting
Siloed strategic planning and budgeting are among the most common structural failures in nonprofits. What happens when strategy and budget are built separately? How do your teams resolve that when you encounter it?
KIM: Well, if these processes are disconnected, the budget goes bottoms-up—you're baking line items into a budget that aren't tied to any agreed-upon strategic initiative. Then you get constant back-and-forth between the board and staff about what should be done, and a constant cycle of re-budgeting. Nobody likes that.
SARAH: That's true, and the fix is painful too, especially for teams who've been through a few of these cycles. In short: you have to scrap the budget and start over. But it's less painful than staying in a broken, siloed process. When I step into situations like this, I do what I can to ease the burden on this year's budget, then either kick off longer-term strategic planning, or have the team dust off and recommit to the existing three- or five-year plan. My job is then to back into that outcome with year-by-year budget recommendations.
LINDSEY: Here's one reason nonprofits fall into this trap: dreaming isn't hard. Passionate volunteers have no problem imagining a better future for the association, or even naming activities that might get them there. What doesn't come easily is the bucket of money to do those things.
Every big idea needs a revenue plan, and perhaps more importantly, a To-Don't List. What are we sunsetting to free up resources for this new, bold dream? It often takes a few rounds of iteration to answer that.
People underestimate how hard this is in associations; they don't operate like a for-profit business, where the people creating the strategy also execute it. Associations have two distinct groups, and the board is often in near-constant flux. Pulling a consistent thread between strategy and execution isn't as straightforward, because every new board member arrives with their own opinions and plans, wanting to make their mark.
KIM: Right—the To-Don't List drives continuity by giving board members clear parameters around what they can and cannot bring to the table.
SARAH: I also look to make sure boards have a clear succession process. Ideally, before you're ever on the board, you've been an involved member on a committee, maybe even a committee chair. Then you get the opportunity to be a regular board member. Once you've served for X amount of time, you move onto the executive committee. That's how you build continuity naturally—everyone on the board has been socialized in the strategic vision, and is ready to make the decisions we're working to execute, even as the president changes every two years.
LINDSEY: I agree with everything said, and would add that there's a science to recruiting the right board. Recruit for competencies and passion, in that order, and match new members' competencies to key gaps.
I'd also encourage associations to remember the value of fresh faces: you don't want to stifle innovation and long-term participation by making the board so streamlined it becomes complacent. The right people are often very busy, well-paid at their day jobs. They want to be where fresh ideas are encouraged and valued—otherwise, it's not a great experience for them. Striking that balance between recruitment and continuity takes real consideration and communication.
Let's talk a little bit about revenue streams. How can the CFO and CEO work together to pressure test a growth idea?
SARAH: I start by modeling conservative, best-case, and neutral scenarios, plus a minimum viable number. Say we want to launch a new initiative — an on-demand content library as a member benefit. To make a yes-no decision, I want a clear understanding of the production cost, and how many sign-ups we'd need to break even. If we need just ten people, that's great — let's keep kicking it around. If we need a thousand, that's a different story. But that minimum viable number is something the team can understand, execute against, and track.
LINDSEY: I agree. Once that number feels good, pressure test ideas with trusted sources, including members or sponsors who currently support the organization. Seek disconfirming information as much as confirming—ask your team, "Why wouldn't this work?" If there's nothing that rises to the top, you've done the modeling, and you've set clear success criteria, then it's probably worth pursuing.
KIM: It's essentially doing the homework to ensure that you have product-market fit. Every company, for-profit or nonprofit, has to do this to make money—associations are no different.
SARAH: And with associations, you're beholden to your members. They're your customers. Every revenue line needs to relate to who members are, what they need and want, and the problems they experience. If you're not developing offerings that meet members where they are, they won't be members next year.
The Executive Director/CFO Partnership, Done Right
What does a good CFO/Executive Director relationship in an association look like? How do you keep that relationship collaborative, generative, and supportive?
SARAH: When I see a CFO and Executive Director on separate pages, it's usually because each heard an idea through a different channel, then went back to their own desk to map out what it could look like. They haven't cross-pollinated their assumptions, so they end up firmly entrenched in different places. That's where confrontation is most common. Building out at least a framing scope together goes a long way toward limiting conflict down the road.
LINDSEY: I've experienced the least friction when the CFO is involved in strategic discussions from the get-go, because—to Sarah's point—they see that this idea isn't some half-baked brainwave, but something that's been considered, that excites people, and that has board momentum. With that context, they help the whole team see where we can flex resources or leverage buffer to make the new strategy viable.
I don't want my CFO to shut down new ideas. I want a CFO who wants a creative dialogue about how to make an idea actually work.
KIM: There are times, unfortunately, when CFOs have to be that voice—not something we love, necessarily, but sometimes the case. But to your point, Lindsey, there's an art to it. Blunt pushback only breeds more pushback. A smarter move is to lay out the economics and show the choice sets. It's scenario planning more than a reality check.
CFOs don't want to say no. It's never my intent because it's not part of my job description. What is part of my job description: running models and spelling out risks, so the organization can place the best possible bet.
LINDSEY: I love that response. I'd add that ED/CFO relationships in associations differ from other organizations because of the active board and committee structure. If the ED and CFO aren't aligned in a setup like this, that's a layer of complexity that doesn't need to exist.
KIM: Right. Associations are more dynamic than most organizations, precisely because the board changes consistently and the organization serves its members. It's easy to make a decision that serves one segment at the expense of another.
A very real discussion I've had with association leads: how do we prioritize which member segments we serve? That answer shifts over time, as segments become more or less vocal. Regulatory frameworks shift year to year too, changing what your population wants. Chasing issues into new member bases every year is hard. That's just the complexity of running an association.
Tell us about a time when you've worked with a CEO or CFO to help guide an association through the unexpected. How did you approach that, together?
KIM: Here's a good one. I worked with a client that ran an annual expo — their signature program and a major piece of revenue, all built and staffed internally. They were exploring whether to bring in an outside event management company to run it instead.
That's a massive change to how the organization operates. So we set out to figure out what stays in-house versus what moves outside, and how that reshapes the organization.
It required getting the CEO and board aligned on priorities—were we doing this so the team could focus on other things? Or outsourcing because the expo was losing money and needed to stop bleeding? Those are two different goals, leading to two different decisions.
In my experience, failure to align those priorities is where many strategies go off the rails, leading to failed execution and broken trust.
LINDSEY: That's really the elephant in the room, Kim—trust is lost in buckets in these cases, and it's a shame, because it's so preventable. A strong CFO-ED partnership can head it off at the pass, by leading the process of establishing those priorities for the whole organization.
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