9 Pieces of a Successful Nonprofit Business Plan

9 Pieces of a Successful Nonprofit Business PlanThink Like a Business to Attract Donors, Acquire Board Members, and Keep Your Organization on Track

It’s easy to think about your nonprofit organization by its mission, values, and impact on your community. Each of those factors is vital to the continued success of the organization. But just because a nonprofit is a “nonbusiness entity,” doesn’t mean your nonprofit organization can’t borrow tips and techniques from profitable businesses. And like any business, big or small, your nonprofit organization needs a business plan.

Without a business plan, you’ll have a hard time obtaining loans and grants, attracting corporate donors, meeting qualified board members, and keeping your organization on track. A business plan is the foundation for your organization — the who, what, when, where, and how you’re going to make a positive impact. In drafting, revising, and updating your business plan, you’ll need to cover all your bases.

Open With an Executive Summary

Your business plan opens with an executive summary, or an overview that sums up your entire business plan. Anyone evaluating your executive summary can find the major points of your business plan, without reading every page.

State Your Mission

The United Nations Children’s Fund’s (UNICEF) mission statement is just shy of 300 words and states: “UNICEF insists that the survival, protection, and development of children are universal development imperatives that are integral to human progress.” You don’t have to be as big as UNICEF to have a well-defined mission statement. Use your nonprofit’s mission statement to establish your milestones, the problems your organization seeks to solve, who your organization serves, and its future goals.

Research Your Market

When a potential investor wants to donate a generous sum to your nonprofit, they don’t make the decision lightly. Investors will want (and need) to see your market analysis to know your nonprofit is a viable organization. Included in your market analysis is an overview of the industry and target market (with psychographics) you aspire to serve. You’ll also need to include business projections and any rules or regulations your organization must follow.

Study the Competition

By understanding the competition, you can better understand your nonprofit. Like any business, you have to compete with every other nonprofit that serves your niche. There are only so many donors, sponsors, and volunteers to go around. With a competition analysis, you get to differentiate your nonprofit organization from the competition. This section analyzes the strengths you bring to the market and brings to light any reasons a donor, sponsor, or volunteer wouldn’t choose your organization over others.

Develop an Operations Plan

Your operations plan is an in-depth look at how your nonprofit organization is going to function day to day. In this section, you’ll need to document aspects of your nonprofit, like any resources needed and the level of experience required for each employee. Here you’ll also document your financial assets and physical assets (or items that require upkeep, like cars and property).

Highlight Your Programs and Services

You have your mission, now it’s time to expand on the programs and services that will accomplish the mission. The American Red Cross carries out their mission to prevent and relieve suffering with five key services: disaster relief, supporting America’s military families, lifesaving blood, health and safety services, and international services. Every service you provide must be documented in detail, complete with their funding sources and benefits.

Establish Organizational Structure

Anyone looking into your nonprofit’s business plan needs to know the chain of command within your organization. Organizational structures are required by law, so your business plan must include the qualifications and information on your nonprofit’s governing body (i.e. board of trustees, executives, advisory board, etc.).

Marketing or Funding Strategies

We know money doesn’t grow on trees, the same way donors and investors don’t just appear without warning. In 2015, individual giving increased 7.1 percent, according to “Giving USA 2015.” The annual philanthropy report estimated charitable giving came out to $258.51 billion. Do you have a plan to earn your share of charitable donations? Your business plan must include how your organization will obtain funding. Outline the grants or loans you plan to apply for, as well as fundraising plans for private donations.

Finish With Financials

The last piece of the business plan requires transparency. In this section, you must report your nonprofit’s debts and income (bonds, holdings, endowments). This will compliment your yearly budget to ensure your organization is on target this year and for years to come.

Your nonprofit doesn’t need to identify as a business to reap the rewards of operating like a business. Build a business plan, and update it regularly, to maintain a solid nonprofit foundation.

Need help getting started? Cougar Mountain Software’s Denali Fund can deliver polished, accurate results for even the smallest nonprofit organizations.

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