You write a nonprofit business plan using many of the same elements used in a for-profit business plan. However, the nonprofit’s charitable mission drives the development of its business plan. A strategic nonprofit business plan details management practices and operations, explains the activities planned to carry out the nonprofit’s mission and charts a course for achieving financial independence and sustainability. A nonprofit must operate like a business and plan strategically to build assets, support its mission and sustain its work.
The planning process a nonprofit undertakes before writing its business plan is more important than the finished product, according to The Foundation Center’s Grant Space. An organization usually develops a business plan before beginning operations, but nonprofits also develop business plans to reassess and reset course, plan an expansion or generate support for a program. Involve board members, community members and, if the nonprofit is operational, staff in the planning process. Establish a timeline, such as over three or five years, to provide a long-term view of activities and allow for evaluation and correction.
Formatting and Audience
The nonprofit business plan functions as a management tool. However, the plan is not just an internal document. Foundations and others often ask to see a nonprofit’s business plan before agreeing to contribute to the organization. Your business plan should be a professional document suitable for distribution to outside sources.
- Include a cover sheet, title page and table of contents.
- Start with a compelling executive summary, which introduces your nonprofit and summarizes the business plan.
- Format the document with clearly defined sections so readers can easily locate information.
- Use graphs, charts and sidebars to break up text and maintain interest.
Look at sample nonprofit business plans to get a feel for the flow and use of graphics.
Research and Projections
Research the need your nonprofit addresses in a given community and the resources required. For instance, a nonprofit that helps displaced workers in Xenia, Ohio, needs to know the number and characteristics of displaced workers in the city, the services they need and the existing resources they can already access. Research information about best practices for providing services that work, such as successful approaches for improving participation in financial literacy programs. Review current funding trends, with a special focus on identifying individuals or organizations that have contributed to or expressed interest in your program areas.
Constructing the Plan
Whether used by internal or external readers, the business plan should focus on the nonprofit mission and how the work is carried out. The plan should persuade and instruct. Build your business plan by organizing into the sections the data, conclusions and decisions generated through your research and planning.
- Describe start-up plans, including financial support
- Organizational goals and objectives
- Program activities, such as services and projects
- Evaluation methods
- Fundraising plan
- Plans for growth, such as adding new programs or moving to a larger facility
- Financial Plan, including your budget, financial statements and fundraising plan
- Conclusion section - restate your mission and the plan's benefits
Add an appendix that includes documents such as your IRS 501(c)(3) letter, articles of incorporation, board roster, job descriptions and letters of support.
Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.