In this article, you will be guided through the basic of establishing a nonprofit business plan, we will provide a comprehensive nonprofit business plan template, and you will be offered helpful tips to create an effective business plan that will help you win grants, engage donors, and establish a strong foundation for your organization.
Who is this template for?
This template is for all nonprofit organizations.
What are the main sections covered in this template?
The main sections include: Why should you have a nonprofit business plan, and business plan tips.
To effectively manage a nonprofit, you will need to identify your organization’s primary objectives, purpose, vision for the future, and the specific types of services you are offering to the public.
In the following article, we will guide you through the basics of establishing a nonprofit business plan, provide you with a comprehensive nonprofit business plan template, and offer helpful tips to create an effective business plan that will help you win grants, engage donors, and establish a strong foundation for your organization.
Let’s get started!
What is a Nonprofit Business Plan and Why Should You Have One?
Let’s start at the beginning—what is a nonprofit business plan?
A nonprofit business plan is a document that describes the current purpose of a nonprofit while laying out a roadmap for the next several years. The nonprofit business plan will provide details on the primary objectives of the organization and how the nonprofit plans to achieve those goals.
Nonprofit business plans will include comprehensive information about the organization’s services and programming, operations, finances, management, and marketing strategy.
A nonprofit business plan is critical for engaging new sources of support including grantmakers, volunteers, corporate sponsors, and individual donors. The business plan helps establish credibility with these stakeholders. It is imperative to develop a nonprofit business plan that is clear, concise, and compelling to draw in as much support as possible.
A nonprofit business plan is also a vital resource for staff and management at the organization. The document can be useful for keeping the organization on track through day to day operations.
It can also help management identify any potential issues that may arise while attempting to meet the named objectives. Using the plan as a guide can help management avoid issues and nimbly alter operations to effectively meet goals.
Key Sections of a Nonprofit Business Plan
There are several key components that are important to include in any nonprofit business plan. Let’s take a look at each section and break down the types of information that should be present.
1. Executive Summary
The executive summary is exactly that—a summary of your nonprofit’s business plan and an introduction to the document.
An executive summary should be a high-level description of what is in the document. That means that it should not include the details or specifics that you will need to provide in other sections of the plan.
An executive summary is fairly short, typically no more than two pages. Because of this it might seem like it would be the easiest section of the business plan to complete. However, because you will have to summarize very complex ideas into only a few sentences, this can be the most difficult piece to write.
A helpful tip is to save this section for last when you are working on a nonprofit business plan so you can go into it with all the other information completed and finalized. That way you will have all of the specifics squared away and the other content will be fresh in your mind, making the executive summary much easier to write.
The executive summary is especially important because it is the first thing that a reader will see. For grantmakers and other major donors, they may not have the capacity to read a nonprofit’s entire business plan.
For this reason, be sure to pay special attention to this section, and focus on making it as attention grabbing as possible.
2. Nonprofit Overview
Following the business plan executive summary should be an overview and description of the nonprofit organization along with its mission statement.
This section should provide general information about the nonprofit including:
what kind of activities it is engaged in
the type of programs or services that are offered
other information that is foundational to your organization such as mission statement, vision statement, and guiding values and principles
Leading into the overview, be sure to emphasize your nonprofit’s mission statement. As the formal summary of your organization’s aims, beliefs, and values, it is crucial that readers are acquainted with the mission statement right away.
Beginning with the nonprofit mission statement will also help keep your nonprofit business plan organized around a clear and concise message and theme. The Pulmonary Fibrosis Foundation does an excellent job highlighting their mission statement and summarizing complex subject matter into a few succinct, engaging sentences that capture the breadth and scope of their work.
The overview section of your business plan is very crucial for readers who are not yet familiar with your organization. Be sure to communicate clearly and write in an engaging manner to ensure that new supporters and stakeholders unfamiliar with your work will continue to be drawn in.
If you are working at a new nonprofit, you can read more about crafting your nonprofit mission statement and other foundational language here.
3. Programs and Services
Next is the section where you will write about your organization’s activities including its programming, services, and other offerings from the nonprofit. This is the heart of the business plan, the section that allows you to go into detail about your nonprofit’s operations and what you do on a day to day basis to make an impact on your community.
This section of the document should be very specific about the primary activities your organization offers.
Here is where you can discuss who you serve specifically and write about the need for your work. You should include any relevant data, studies, or research pointing to the need for your programs and services in your community and explain why your nonprofit will make a positive difference.
If your nonprofit organization has been operating for several years and you have data and stories about how you have successfully served the community, this is where you can include that too.
Including a participant story of impact can help personalize your nonprofit business plan and help readers form a deeper connection with your work.
RAICES uses participant stories and impactful quotes to highlight their work and make strong connections with their stakeholders by providing first person accounts of the experiences of the families they serve.
4. Impact Plan
Once you have described your organization’s background, your activities, programs, and services, and provided information about your beneficiaries, you will move on to the impact plan.
The impact section is a unique feature of the nonprofit business plan. Nonprofit organizations need to be accountable for the impact they plan to make through their stated activities and be prepared to provide detailed information and steps on how that will happen.
For all intents and purposes, the impact plan is essentially the section where you will state the organization's primary goals—what they are and how you plan to accomplish them.
Perhaps you have already illustrated how your organization is serving your community and has achieved success in the previous section discussing your programming and services. Build off of that here by providing projected results from your activities.
Will you improve outcomes for your participants in the coming years? Do you plan to serve more individuals? These are the questions you will need to answer in this section.
If your nonprofit is just getting started, have no fear. You will still be able to make projections and describe how your activities will impact your community. While data and metrics illustrating impact are great, for newer nonprofits this may not be feasible. Support your claims through other evidence or research to show how your work will achieve results.
5. Financial Plan
While impact is vital to any nonprofit organization, readers will still need to know about your financials. It is important to include this information for internal purposes too as this information will help you remain accountable and help you identify gaps in funding or financial issues that may arise in the future.
Your financial plan should include key financial information that you would include in other important organizational documents such as your annual report. You will need to show your current financial standing, provide a list of expenses and revenue sources, a budget for the amount of time your business plan encompasses (e.g. 3-5 years), and a fundraising strategy.
For nonprofits organizations that have been operating for several years, you can pull this information from other recent accounting documents and reports. Newer nonprofits can provide startup costs or project other costs they anticipate as well as any pending revenue such as any grants they have applied to.
Here is a list of some of the specific information you will want to include within your financial plan:
List of expenses
List of revenue (including secured or pending grants)
List of assets and liabilities
Cash flow statements
6. Marketing Plan
Nonprofits are in the business of securing revenue through donations and to achieve these it is important to have name recognition and the ability to reach your audience.
This is where marketing comes in.
A marketing plan can include everything from press releases, advertisements, the nonprofit’s website, and social media strategies. You can discuss how your organization has utilized these marketing tools to engage the public and engage supporters and how you plan to improve on what you have already accomplished.
If your nonprofit is just starting out, consider what the foundation for your marketing strategy will be.
Do you have a website? Do you have a presence on social media? Do you have the capacity to work with the press or buy advertisements in local papers, online, or on television? Answer these questions when you are formulating a short term and long term marketing plan for your nonprofit.
Avoid These Mistakes When Creating Your Nonprofit Business Plan
While it is absolutely necessary to know what to include in your nonprofit business plan, it is equally important to know what not to do so you can avoid making costly mistakes.
Let’s review some important “DON’Ts” when crafting an effective nonprofit business plan.
DON’T use technical jargon.
Remember that your audience is vast and diverse, and not everyone reading your report will have a background in management or the nonprofit industry. Avoid language that could confuse or keep your reader from engaging with the document.
DON’T make your business plan too lengthy.
With even just the basic information you will be surprised how many pages you will fill up. Do not add any unnecessary or irrelevant information just to fill space. Remember, being concise is vital to keep readers engaged with the content.
DON’T be inconsistent with your formatting.
The design of your business plan is just as important as the content within. A nonprofit business plan with inconsistent or unorganized formatting can turn readers away and potentially put you at risk of losing out on potential grants or donors.
The Best Nonprofit Business Plan Template
You now have a strong understanding of what key sections are necessary to include and what pitfalls to avoid when crafting your business plan.
Using the information above to guide you, follow this nonprofit business plan template to organize information and begin to lay out the full document.
Remember to think about what is important about your organization and what your readers will need to know. While this template is helpful, do not hesitate to add or remove any sections so you can create a nonprofit business plan that best reflects your organization.
Include mission statement, vision statement, guiding principles, and values along with other foundational information that guides your nonprofit’s work.
Include a brief list of key people, staff, and/or leadership
Programs and Services
Provide a detailed list of all products, programs, services, and activities
Include detailed information about your beneficiaries
Top 5 Business Plan Tips to Keep in Mind
You have your nonprofit business plan template, you know what information and content to include in the document, and you know what pitfalls to avoid when you begin writing it.
Great! With that information at your fingertips you are already well on your way to creating a thoughtful and compelling nonprofit business plan.
Before you dive in and begin working on the document for your nonprofit, let’s review a few helpful tips to keep in mind when you start writing your business plan.
Be Concise: When you are creating an effective nonprofit business plan, brevity is everything. There is no need to create a document that is too lengthy or verbose. You want to provide as much detail as possible while keeping it brief.
Include Images and Infographics: Images of staff, participants (with consent), and your place of work can make your business plan more engaging. A picture of smiling participants or staff can help set a positive tone and underline that the work is resulting in favorable outcomes for your community.
Know Your Audience: There are many different types of audiences who will be reading your nonprofit business plan. You want to make sure that you are writing for a diverse audience, keeping in mind who specifically you hope to reach with this document and who may be reviewing it in the future.
Do Your Research: Ensure that you have done any and all research on the societal problem or issue your nonprofit is engaged in. Be certain you are ready with the appropriate evidence to undergird your claims about the proposed success of your nonprofits activities.
Show Enthusiasm for Your Work: The best way to engage readers is to show that you are deeply engaged yourself. When it comes to the nonprofit business plan, sometimes wearing your heart on your sleeve is the very best approach!
Wrapping Up: Nonprofit Business Plan Template
A nonprofit business plan is one of the most vital documents a nonprofit organization can develop. With the information within this article as your guide you have everything you need to create a compelling and effective nonprofit business plan.
With the right tools, nonprofits can quickly scale fundraising and programming and take back their time. But, what makes something the “best” tool? And how do you justify an additional expense in a resource-constrained organization? Download this guide to learn more.