The first big battle most nonprofit and charity organizations have to confront isn’t saving the world — it’s their nonprofit business plan. Though the project often starts from a passionate “Erin Brockovich” moment, it hardly ever kicks off with ample funding and great renown. Your first step towards achieving the reach and impact you want to have on the world is getting people on board with your plan.
Tackling your business plan becomes much easier when you understand what’s expected. That’s why in this post, you’ll learn what a nonprofit business plan is, why you need it, and how to write it section by section.
- What is a nonprofit business plan?
- Why a business plan is necessary for a nonprofit organization
- How to write a nonprofit business plan in 7 steps
- Nonprofit business plan sections
- Executive Summary
- Products, programs, and services
- Operational plan
- Nonprofit business plan example
- Using your nonprofit business plan for success
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What is a nonprofit business plan?
While your nonprofit business plan will be a great tool for getting noticed, it’s actually a road map. Using a plan, your whole team will be perfectly clear on your goals, challenges, and plan of attack. Your business plan will set goals for the next few years that you’ll then be able to focus on reaching incrementally.
This plan will also be a key element to come back to several times per year to make sure your strategy and current actions align with the original plan. Otherwise, those goals may start to look harder and harder to reach. What you want is to see how you’re progressing towards the impact you wished to have the very day the nonprofit was founded.
While it’s normal to shift a bit throughout the years, your business plan will remind you and your donors what you’re about and — perhaps most importantly — what you’re not about.
Why a business plan is necessary for a nonprofit organization
Though every business needs a roadmap, nonprofits may need them the most because of the variety of audiences they appeal to. While for-profit business plans often appeal only to executives and investors, non-profits must lay out their plan to donors, volunteers, investors, foundations, and beneficiaries. Every one of these groups is concerned about what you want to get done and how you plan to do it — although some are more interested in actually reading the plan than others.
As a nonprofit, you need to understand how you’re appealing to every one of these groups to succeed. Additionally, just building your plan might actually help you make that happen. A SKEMA business school study showed that planning has the greatest impact on the perceived value of a project and its client satisfaction. For nonprofits, this means how partners and investors see your value and how satisfied those who benefit are with the results.
How to write a nonprofit business plan in 7 steps
Your nonprofit may be brand new or may have worked for years. Regardless, you’ll still want to write a business plan for the reasons listed above. To write your plan, follow these general guidelines.
1. Mind your audience
Remember that not everyone who reads your plan will be as experienced and knowledgeable as you are. Avoid using jargon, acronyms, or any unfamiliar terms. Write for a general audience, and you’ll be more likely to keep the reader engaged.
2. Outline your plan
Make a nonprofit business plan outline. Once you know what information will be put into the plan, you’ll understand what data you need to source to write it. Do you need to find data from the past two years? Maybe you have to track down some finances. Outline your sections and write them one at a time.
3. Keep formatting simple
Think back to when you were in school. A simple format will make your plan simple to read and attractive to the eye. Use a 12-pt. font and stick to Times New Roman or Arial. Make margins readable — one inch on each side — and 1.5 or double-spaced lines. This will create white space on the page that makes it feel less overwhelming.
4. Divide sections clearly
Use headings on your business plan and separate pages for each section. If you finished your previous section in the middle of the page, don’t keep going. Start your next section on the next page. This gives the reader a break to process the section and continue.
5. Display your data aesthetically
When you’re laying out the facts and figures in your nonprofit business plan, adding a few colorful charts and graphs can make the data much more interesting. Sure, you can let the reader process the text and imagine what that means, but data expressed visually will better illustrate your point to keep them engaged.
6. Hire an editor
Even the best writers need editing. Why is an editor so important? The last thing you want after putting all that work into your plan is for any bad grammar or spelling to hurt credibility.
When you’re so involved in the writing of a long piece of text, it can be hard to see your mistakes. After all, you can only read the same sentence over again so many times before it becomes gibberish. Once you’ve written every part of your plan, hire an editor or ask a few people to proofread for you.
7. Keep the tone positive!
Most nonprofits exist because of life’s less-than-positive sides, but you don’t have to make that the takeaway of your business plan. If your nonprofit is tackling hunger, go into depth on your plan to feed people. If you’re all about helping struggling single mothers, talk about your programs. Position yourself as a solution to a problem, and highlight what you plan to accomplish.
Nonprofit business plan sections
As mentioned earlier, your plan should be separated into sections so the reader can access information easily and efficiently. The sections will mostly mirror a regular business plan with some small modifications.
Here are the sections you should divide your business plan into and how to approach each of them.
Summaries are always the most-read section of your nonprofit business plan and not just because it is concise and placed conveniently at the beginning. This section tells the story of the change you hope to make. Here, you’ll include your mission, your vision, and your goals.
Write this section by telling the reader about the needs you want to fill and a short summary of how you’ll do it. You might find it helpful to write this section last since it will summarize what’s talked about in the rest of the plan.
The executive summary is also customizable depending on whether you’re approaching an investor, sending the plan out to get a loan, or recruiting someone to your team. Since this section is at the very beginning of your plan, it’s easy to edit when you need to send it out to someone new.
Products, programs, and services
Every nonprofit offers something different. It doesn’t matter if you’re all about education or selling merch to raise funds for families in need, etc., you should go well into detail in this section about what you plan to offer your community.
Consider this the part of your nonprofit business plan in which you’ll both establish the need for what you offer and exactly what work you’ll do. An important part to consider is that now will be your best opportunity to establish both who needs you (including how many people or animals), the challenges they face, and why you’re uniquely prepared to help.
Here, you can mention the resources at your disposal — facilities, partnerships, funds, human capital, and what you plan to do with them. Don’t forget to talk both about the details of your nonprofit and the big picture. What kind of impact can your actions have on the community a year from now?
For instance, if your work is to get temporary jobs for the homeless to lift them from poverty, in this section you’d answer questions like:
- Which partnerships will offer a flow of jobs to those you help?
- How many people could use this?
- What other benefits do they receive in your program? Counseling? Shelter?
- What does success look like for your nonprofit and its community one year from now? Three? Five?
The answers to these questions will help to drive home your message and to convince your reader of the concrete steps you’ll take to make change.
In this section, present your organizational structure and how your team is set up. This will further emphasize why your nonprofit is fully prepared to take on the hurdles you’ll overcome to accomplish your goals. Within this section, go into the following points:
Type of nonprofit
Your nonprofit business plan must include the type of nonprofit you are. For example, a 501(c)(11) is a Teacher’s retirement fund association. It gets quite specific, so make sure to mention what kind of need you focus on according to the established nomenclature.
Here, you have the option of just mentioning whether you have employees or volunteers — or a mix — or going into detail. How should you choose what to include? If you are an all-volunteer team, it’s enough to write that. If you have employees that are well-known or have vast experience, then highlighting that is important.
The members of your team will not only give your nonprofit social credibility, but also will reassure anyone reading your plan that you have capable and available hands doing the work.
In this part of your operations section, write too about why the people who work in your nonprofit will stretch funds while ensuring proper use and high-quality resources for those who benefit. This is the balance most nonprofits must carry and demonstrate with poise to their partners. No one likes to see all the funds go in one place nor resources that were bought too cheap.
This subsection is fairly straightforward. Name where you’ll be operating from if you have locations in other cities or countries, and whether all these operations will be working together or if they’re independent.
How you started (if established)
If you’re writing a nonprofit business plan, but you’ve been around for a while, then write about how you started and what progress you’ve made. Show off your past accomplishments here; they’ll provide additional legitimacy to your current plan.
Helping people (or animals) is just one side of the nonprofit arena, but the work can’t get done if no one is invested in it. People need to connect emotionally with your cause, and the best way to do that is by marketing it. Creating your strategy for nonprofit marketing — if you don’t already have one — is vital for your business plan. Take online marketing especially into consideration. What does that all include? Let’s go through some key elements.
Just because you’re nonprofit doesn’t mean you should have no brand identity. Branding your nonprofit is key to connecting with your community and those who want to support them. If you’ve already established your branding, share it here. Your main point for branding will be showcasing your website. Talk about how you use it to give people a first impression of your mission.
Other details to mention in your branding include the answers to these questions:
- What colors do you use? Why?
- What tone works best for your organization?
- How do you promote your services or products using your branding? Tell the reader all about it.
If you haven’t yet figured this part out, start with this guide to nonprofit branding.
How are you using online search and social media to reach more people? Word of mouth, press, and events are great, but online reach will always be an impressive part of your nonprofit business plan. Are you working on your organization’s search engine optimization (SEO) to find patrons? Have you settled on using Twitter as your main social media to connect with your community? Maybe you’ve looked into Facebook ads for fundraising.
If this is new to you and it all sounds like a lot to take on as you write your business plan, use a digital marketing platform like Constant Contact to help you achieve your online marketing goals and add value to your plan.
Before, you went into the resources of your operations, including who, where, and even a little bit of why. Now, in this section, you’ll go through a detailed plan for daily duties and long-term projects.
This part of your nonprofit business plan allows you to play up your strengths. Show your professionalism, your dreamer side, and your inner project manager. Go through what happens daily in your operation, including costs for services and programs. Talk about where these happen and how.
If you’re planning on expanding those daily operations, say running soup kitchens in twenty neighborhoods in your city instead of just five, explain those goals and how you’ll work to reach them. Also, include what you’ll need to get there. For a soup kitchen, this will mean more volunteers, supplies, and locations, among other things. What will you do to raise the funds necessary? This operational plan will paint a more complete picture of how your aspirations turn to action.
The finance section is without a doubt the section under the most scrutiny from both within and outside your organization. This part often lets organizations know that they have a gap in funding and need to plan for how to fill it. The main questions to answer in this part of your plan are where your funds will come from and where they’ll go.
The first thing you’ll do is lay out your projections for funding. If you’ve already gotten funding before, use that as your baseline. Otherwise, do some research on similar nonprofits and what donors in your network are willing to offer. Use those numbers to create an informed estimate, not just a guess.
Next, include your expected expenses. Again, if you’ve been doing this for a while, use past expenses as an example of what you’ll be spending funds on in the future. This part can be presented in a table to make it more practical to read. You should include salaries, utility bills, subscriptions, website hosting, insurance, and anything else you’ll need.
The appendix section of your plan is for anything extra you want to include. Examples include bios for board members, more academic papers about your nonprofit or its target community, anything that doesn’t quite fit in other sections, but that the reader could find relevant.
Nonprofit business plan example
Now that you have an outline of a business plan for a nonprofit organization, you might want to look at some examples before writing your own plan. You’ll find plenty of nonprofit business plan examples and templates online. The one I recommend checking out is from Aspire Public Schools.
This highly detailed plan is a great example of how an effective business plan can not only convey the value of your organization but also guide your operations. While this plan might be more robust and detailed than you’d need for a smaller, younger nonprofit, reading through it could inspire some additional info you wouldn’t otherwise have thought to include in your own plan.
Using your nonprofit business plan for success
After learning about what a nonprofit business plan is, why you need it, and how to write one, you can start outlining your own. Gather the information you’ll need and start one section at a time keeping in mind whom you want to share it with and what variations you’ll need according to possible readers — i.e. banks, press, etc.
Finally, after finishing your plan, you’ll not only have a more credible and legitimate nonprofit, you’ll also understand your organization better. Use your plan to find where you excel and how you can do better in the future. Who knows? This plan could be the spark that leads the biggest impact on your community.