Examples of Financial Plans for Not-for-profit Organizations
A financial plan for a nonprofit organization is quite similar to a business plan for any for-profit company. Rather than focusing on the services you plan to provide, its main emphasis should be on the money. Specifically, this includes, where you plan to get money, how you will get it, hwhere you plan to spend it, and what the amounts are.
While all not-for-profit organizations are different, their financial plans are usually organized the same way. The typical sections include:
- Cover page
- Table of Contents
- Executive Summary
- The Organization's Structure and Key People
- Market Opportunities or Competitive Analysis
- Overview of Programs and Services Offered
- Financial Details
The cover page and table of contents are the same as any multi-page document. The executive summary does as its name suggests, summarizing the contents of the plan in a few paragraphs for busy people like executives. The executive summary is usually written last because it highlights the most important aspect of the financial plan, like how much money you expect to generate and the major programs and services to be developed.
The best laid plans of any organization will come to nothing if you don't have the right people on board. This section of your financial plan should briefly describe the key people in the organization and the skills and expertise they bring with them.
This begins with your board of directors, followed by the executive director and then the key management positions, including those responsible for fundraising and finance. Depending on the structure of your not-for-profit, this section can also include a council of elders; leaders in the community who will be helping; an advisory council, key committee volunteers, an operations committee and a strategic planning committee.
When listing market opportunities and writing a competitive analysis, a common approach is to use a SWOT analysis – Strengths, Weaknesses, Opportunities and Threats. This should include other organizations providing similar services or fundraising in the same area, at the same times of year, or those that are using similar fundraising techniques.
As an example, if you have decided that a charity run will be a good fundraising event, you should explain why that should be the case, such as a renewed interest in running in your community. If other organizations are also doing charity runs, you should explain how your run will be different, from a perspective of both strengths and weaknesses.
If you are applying for grants, those should be included in this section. A SWOT analysis of your grant applications could include how likely you will be able to win them, as well as increases or decreases in grant amounts.
The financial plan should include all of the contingency plans you have, should your primary market opportunities fall through or fall short. For example, if you are applying for a grant to pay for the costs of that charity run, you should include any back up plans to raise money in time for the event should that grant be denied.
The last section of a financial plan lists all the nuts and bolts of your finances, your expected revenue and the details of your expenses. Many organizations put this information into a spreadsheet and then copy and paste it into the document.
The revenue section would typically include:
- Anticipated fundraising amounts
- Annual donor contributions
- Investment revenue
The expenses section would typically include:
- Consultant fees
- Printing and office expenses
- Travel costs
- Conference fees
- Detailed costs of each program
- Gifts to donors and volunteers
Many organizations will list more than a $1 dollar amount for both revenue and expenses. For example, if your organization has been around for more than a year, you could list last year's revenue and expenses in one column; your best-case scenario amounts in a second column; and your most likely amounts in a third column.