Guide to Writing a Business Plan for Your Nonprofit Organization

A business plan can be a valuable tool for your nonprofit organization. Even the most basic business plan will encourage you to do research, better define your purpose, and improve your messaging. In addition, without a plan, you will find it difficult to obtain grants and loans, attract donors, and keep your organization on track.

Whether you decide to use a nonprofit business plan template or create your plan from scratch, it should describe your organization as it currently is, and establish a roadmap for the next 3-5 years. It should also present your goals, as well as the plans and strategies to achieve those goals. Here are the essential elements every nonprofit business plan should include.

1. Executive Summary

The executive summary is typically the first section of the business plan to be read, but the last to be written. This is because the executive summary is a general overview of everything else included in the plan. It should provide a brief overview of your mission, describe who you serve, how you provide the services, and how you fundraise.

Write it with your prospective donors in mind, or someone who is not familiar with your nonprofit, making sure to avoid internal jargon or acronyms.

2. Products, Services, and Programs

This section should contain more detailed information on what your organization does. It should explain what products, services, and programs you provide, how your nonprofit benefits the community, what needs it meets, and what your plans are for meeting those needs.

Be sure to provide enough details, including the beneficiaries and functions. Try to provide clear examples, including pictures, brochures, or other promotional material.

3. Fundraising Sources

For most nonprofit organizations, fundraising is vital. In this section, you should describe who your target market is for fundraising, i.e. who supports and donates to your nonprofit. You should also define different tiers of prospective donors and how you will connect with them.

Do some research and try to be as specific about your donors as possible. The more specific you are about your donors’ demographics, interests, and income, the more targeted and effective your outreach will be.

4. Promotion Strategies

For nonprofits, this section should describe how you are going to reach your target client population. This is often the most detailed portion because it explains how you intend to execute your plan. Here’s what it should include:

• Market description, including your target clients, beneficiaries, donors, competitors, and prospective partners.
• Any market tests and analyses you have conducted.
• An outline of your plan for reaching beneficiaries.
• An outline of your marketing strategies and expected outcomes from those strategies.

5. Team

You will also want to mention the people behind your nonprofit in order to demonstrate that you have enough support to make your organization a success. Nonprofit organizations typically have a few different teams, including paid staff, volunteers, and a board of directors. Be sure to highlight each person’s qualifications, past accomplishments, and designated responsibilities.

There might also be donors who are worth noting here, as well as key individuals who you plan to help through your nonprofit.

6. Financial Plan

The financial plan is one of the most important sections of your business plan. Here’s what your financial plan should include:

• Outline of your organization’s current and projected financial status.
• A cash flow statement, income statement, financial projections, and balance sheet.
• List of any grants you have received, as well as any significant contributions.
• Any gaps in your funding, along with a strategy to manage those gaps.
• Startup costs.

Understanding the financial details of your nonprofit is very important in order to provide transparency so that your donors will know how their donations will be used.

Final Thoughts

Many nonprofit organizations start out with lots of enthusiasm, but without a proper plan. A nonprofit is still a type of business, and many of the same rules that apply to for-profit companies also apply to nonprofits. A solid nonprofit business plan will provide a clear vision and path to different milestones along the way but also give you something to refer back to when you’re struggling.

It should be noted that while your vision, mission, and values will probably remain the same, your business plan might need to be reviewed from time to time as your organization grows and evolves.