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Business Planning for Nonprofits

Business planning is a way of systematically answering questions such as, “What problem(s) are we trying to solve?” or “What are we trying to achieve?” and also, “Who will get us there, by when, and how much money and other resources will it take?”

The business planning process takes into account the nonprofit’s mission and vision, the role of the board, and external environmental factors, such as the climate for fundraising.

Ideally, the business planning process also critically examines basic assumptions about the nonprofit’s operating environment. What if the sources of income that exist today change in the future? Is the nonprofit too reliant on one foundation for revenue? What happens if there’s an economic downturn?

A business plan can help the nonprofit and its board be prepared for future risks. What is the likelihood that the planned activities will continue as usual, and that revenue will continue at current levels – and what is Plan B if they don't?

Narrative of a business plan

You can think of a business plan as a narrative or story explaining how the nonprofit will operate given its activities, its sources of revenue, its expenses, and the inevitable changes in its internal and external environments over time. Ideally, your plan will tell the story in a way that will make sense to someone not intimately familiar with the nonprofit’s operations.

According to  Propel Nonprofits , business plans usually should have four components that identify revenue sources/mix; operations costs; program costs; and capital structure.

A business plan outlines the expected income sources to support the charitable nonprofit's activities. What types of revenue will the nonprofit rely on to keep its engine running – how much will be earned, how much from government grants or contracts, how much will be contributed? Within each of those broad categories, how much diversification exists, and should they be further diversified? Are there certain factors that need to be in place in order for today’s income streams to continue flowing?

The plan should address the everyday costs needed to operate the organization, as well as costs of specific programs and activities.

The plan may include details about the need for the organization's services (a needs assessment), the likelihood that certain funding will be available (a feasibility study), or changes to the organization's technology or staffing that will be needed in the future.

Another aspect of a business plan could be a "competitive analysis" describing what other entities may be providing similar services in the nonprofit's service and mission areas. What are their sources of revenue and staffing structures? How do their services and capacities differ from those of your nonprofit?

Finally, the business plan should name important assumptions, such as the organization's reserve policies. Do your nonprofit’s policies require it to have at least six months of operating cash on hand? Do you have different types of cash reserves that require different levels of board approval to release?

The idea is to identify the known, and take into consideration the unknown, realities of the nonprofit's operations, and propose how the nonprofit will continue to be financially healthy.  If the underlying assumptions or current conditions change, then having a plan can be useful to help identify adjustments that must be made to respond to changes in the nonprofit's operating environment.

Basic format of a business plan

The format may vary depending on the audience. A business plan prepared for a bank to support a loan application may be different than a business plan that board members use as the basis for budgeting. Here is a typical outline of the format for a business plan:

• Table of contents
• Executive summary - Name the problem the nonprofit is trying to solve: its mission, and how it accomplishes its mission.
• People: overview of the nonprofit’s board, staffing, and volunteer structure and who makes what happen
• Market opportunities/competitive analysis
• Programs and services: overview of implementation
• Contingencies: what could change?
• Financial health: what is the current status, and what are the sources of revenue to operate programs and advance the mission over time?
• Assumptions and proposed changes: What needs to be in place for this nonprofit to continue on sound financial footing?

More About Business Planning

Budgeting for Nonprofits

Strategic Planning

Contact your state association of nonprofits  for support and resources related to business planning, strategic planning, and other fundamentals of nonprofit leadership. 

Additional Resources

• Components of transforming nonprofit business models  (Propel Nonprofits)
• The matrix map: a powerful tool for nonprofit sustainability  (Nonprofit Quarterly)
• The Nonprofit Business Plan: A Leader's Guide to Creating a Successful Business Model  (David La Piana, Heather Gowdy, Lester Olmstead-Rose, and Brent Copen, Turner Publishing)
• Nonprofit Earned Income: Critical Business Model Considerations for Nonprofits (Nonprofit Financial Commons)
• Nonprofit Sustainability: Making Strategic Decisions for Financial Viability  (Jan Masaoka, Steve Zimmerman, and Jeanne Bell)

Disclaimer: Information on this website is provided for informational purposes only and is neither intended to be nor should be construed as legal, accounting, tax, investment, or financial advice. Please consult a professional (attorney, accountant, tax advisor) for the latest and most accurate information. The National Council of Nonprofits makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

The Ultimate Guide to Writing a Nonprofit Business Plan

A business plan can be an invaluable tool for your nonprofit. Even a short business plan pushes you to do research, crystalize your purpose, and polish your messaging. This blog shares what it is and why you need it, ten steps to help you write one, and the dos and don’ts of creating a nonprofit business plan.

Nonprofit business plans are dead — or are they?

For many nonprofit organizations, business plans represent outdated and cumbersome documents that get created “just for the sake of it” or because donors demand it.

But these plans are vital to organizing your nonprofit and making your dreams a reality! Furthermore, without a nonprofit business plan, you’ll have a harder time obtaining loans and grants , attracting corporate donors, meeting qualified board members, and keeping your nonprofit on track.

Even excellent ideas can be totally useless if you cannot formulate, execute, and implement a strategic plan to make your idea work. In this article, we share exactly what your plan needs and provide a nonprofit business plan template to help you create one of your own.

What is a Nonprofit Business Plan?

A nonprofit business plan describes your nonprofit as it currently is and sets up a roadmap for the next three to five years. It also lays out your goals and plans for meeting your goals. Your nonprofit business plan is a living document that should be updated frequently to reflect your evolving goals and circumstances.

A business plan is the foundation of your organization — the who, what, when, where, and how you’re going to make a positive impact.

The best nonprofit business plans aren’t unnecessarily long. They include only as much information as necessary. They may be as short as seven pages long, one for each of the essential sections you will read about below and see in our template, or up to 30 pages long if your organization grows.

Why do we need a Nonprofit Business Plan?

Regardless of whether your nonprofit is small and barely making it or if your nonprofit has been successfully running for years, you need a nonprofit business plan. Why?

When you create a nonprofit business plan, you are effectively creating a blueprint for how your nonprofit will be run, who will be responsible for what, and how you plan to achieve your goals.

Your nonprofit organization also needs a business plan if you plan to secure support of any kind, be it monetary, in-kind , or even just support from volunteers. You need a business plan to convey your nonprofit’s purpose and goals.

It sometimes also happens that the board, or the administration under which a nonprofit operates, requires a nonprofit business plan.

To sum it all up, write a nonprofit business plan to:

• Layout your goals and establish milestones.
• Better understand your beneficiaries, partners, and other stakeholders.
• Assess the feasibility of your nonprofit and document your fundraising/financing model.
• Attract investment and prove that you’re serious about your nonprofit.
• Attract a board and volunteers.
• Position your nonprofit and get clear about your message.
• Force you to research and uncover new opportunities.
• Iron out all the kinks in your plan and hold yourself accountable.

Before starting your nonprofit business plan, it is important to consider the following:

• Who is your audience?  E.g. If you are interested in fundraising, donors will be your audience. If you are interested in partnerships, potential partners will be your audience.
• What do you want their response to be? Depending on your target audience, you should focus on the key message you want them to receive to get the response that you want.

10-Step Guide on Writing a Business Plan for Nonprofits

Note: Steps 1, 2, and 3 are in preparation for writing your nonprofit business plan.

Step 1: Data Collection

Before even getting started with the writing, collect financial, operating, and other relevant data. If your nonprofit is already in operation, this should at the very least include financial statements detailing operating expense reports and a spreadsheet that indicates funding sources.

If your nonprofit is new, compile materials related to any secured funding sources and operational funding projections, including anticipated costs.

Step 2: Heart of the Matter

You are a nonprofit after all! Your nonprofit business plan should start with an articulation of the core values and your mission statement . Outline your vision, your guiding philosophy, and any other principles that provide the purpose behind the work. This will help you to refine and communicate your nonprofit message clearly.

Your nonprofit mission statement can also help establish your milestones, the problems your organization seeks to solve, who your organization serves, and its future goals.

Check out these great mission statement examples for some inspiration. For help writing your statement, download our free Mission & Vision Statements Worksheet .

Step 3: Outline

Create an outline of your nonprofit business plan. Write out everything you want your plan to include (e.g. sections such as marketing, fundraising, human resources, and budgets).

An outline helps you focus your attention. It gives you a roadmap from the start, through the middle, and to the end. Outlining actually helps us write more quickly and more effectively.

An outline will help you understand what you need to tell your audience, whether it’s in the right order, and whether the right amount of emphasis is placed on each topic.

Pro tip: Use our Nonprofit Business Plan Outline to help with this step! More on that later.

Step 4: Products, Programs, and Services

In this section, provide more information on exactly what your nonprofit organization does.

• What products, programs, or services do you provide?
• How does your nonprofit benefit the community?
• What need does your nonprofit meet and what are your plans for meeting that need?

E.g. The American Red Cross carries out its 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 service.

Don’t skimp out on program details, including the functions and beneficiaries. This is generally what most readers will care most about.

However, don’t overload the reader with technical jargon. Try to present some clear examples. Include photographs, brochures, and other promotional materials.

Step 5: Marketing Plan

A marketing plan is essential for a nonprofit to reach its goals. If your nonprofit is already in operation, describe in detail all current marketing activities: any outreach activities, campaigns, and other initiatives. Be specific about outcomes, activities, and costs.

If your nonprofit is new, outline projections based on specific data you gathered about your market.

This will frequently be your most detailed section because it spells out precisely how you intend to carry out your business plan.

• Describe your market. This includes your target audience, competitors, beneficiaries, donors, and potential partners.
• Include any market analyses and tests you’ve done.
• Outline your plan for reaching your beneficiaries.
• Outline your marketing activities, highlighting specific outcomes.

Step 6: Operational Plan

An operational plan describes how your nonprofit plans to deliver activities. In the operational plan, it is important to explain how you plan to maintain your operations and how you will evaluate the impact of your programs.

The operational plan should give an overview of the day-to-day operations of your organization such as the people and organizations you work with (e.g. partners and suppliers), any legal requirements that your organization needs to meet (e.g. if you distribute food, you’ll need appropriate licenses and certifications), any insurance you have or will need, etc.

In the operational plan, also include a section on the people or your team. Describe the people who are crucial to your organization and any staff changes you plan as part of your business plan.

Pro tip: If you have an organizational chart, you can include it in the appendix to help illustrate how your organization operates. Learn more about the six types of nonprofit organizational charts and see them in action in this free e-book . 

Step 7: Impact Plan

For a nonprofit, an impact plan is as important as a financial plan. A nonprofit seeks to create social change and a social return on investment, not just a financial return on investment.

Your impact plan should be precise about how your nonprofit will achieve this step. It should include details on what change you’re seeking to make, how you’re going to make it, and how you’re going to measure it.

This section turns your purpose and motivation into concrete accomplishments your nonprofit wants to make and sets specific goals and objectives.

These define the real bottom line of your nonprofit, so they’re the key to unlocking support. Funders want to know for whom, in what way, and exactly how you’ll measure your impact.

Answer these in the impact plan section of your business plan:

• What goals are most meaningful to the people you serve or the cause you’re fighting for?
• How can you best achieve those goals through a series of specific objectives?

E.g. “Finding jobs for an additional 200 unemployed people in the coming year.”

Step 8: Financial Plan

This is one of the most important parts of your nonprofit business plan. Creating a financial plan will allow you to make sure that your nonprofit has its basic financial needs covered.

Every nonprofit needs a certain level of funding to stay operational, so it’s essential to make sure your organization will meet at least that threshold.

To craft your financial plan:

• Outline your nonprofit’s current and projected financial status.
• Include an income statement, balance sheet , cash flow statement, and financial projections.
• List any grants you’ve received, significant contributions, and in-kind support.
• Include your fundraising plan .
• Identify gaps in your funding, and how you will manage them.
• Plan for what will be done with a potential surplus.
• Include startup costs, if necessary.

If your nonprofit is already operational, use established accounting records to complete this section of the business plan.

Knowing the financial details of your organization is incredibly important in a world where the public demands transparency about where their donations are going.

Pro tip : Leverage startup accelerators dedicated to nonprofits that can help you with funding, sponsorship, networking, and much more.

Step 9: Executive Summary

Normally written last but placed first in your business plan, your nonprofit executive summary provides an introduction to your entire business plan. The first page should describe your non-profit’s mission and purpose, summarize your market analysis that proves an identifiable need, and explain how your non-profit will meet that need.

The Executive Summary is where you sell your nonprofit and its ideas. Here you need to describe your organization clearly and concisely.

Make sure to customize your executive summary depending on your audience (i.e. your executive summary page will look different if your main goal is to win a grant or hire a board member).

Step 10: Appendix

Include extra documents in the section that are pertinent to your nonprofit: organizational chart , current fiscal year budget, a list of the board of directors, your IRS status letter, balance sheets, and so forth.

The appendix contains helpful additional information that might not be suitable for the format of your business plan (i.e. it might unnecessarily make it less readable or more lengthy).

Do’s and Dont’s of Nonprofit Business Plans – Tips

• Write clearly, using simple and easy-to-understand language.
• Get to the point, support it with facts, and then move on.
• Include relevant graphs and program descriptions.
• Include an executive summary.
• Provide sufficient financial information.
• Customize your business plan to different audiences.
• Stay authentic and show enthusiasm.
• Make the business plan too long.
• Use too much technical jargon.
• Overload the plan with text.
• Rush the process of writing, but don’t drag it either.
• Gush about the cause without providing a clear understanding of how you will help the cause through your activities.
• Keep your formatting consistent.
• Use standard 1-inch margins.
• Use a reasonable font size for the body.
• For print, use a serif font like Times New Roman or Courier. For digital, use sans serifs like Verdana or Arial.
• Start a new page before each section.
• Don’t allow your plan to print and leave a single line on an otherwise blank page.
• Have several people read over the plan before it is printed to make sure it’s free of errors.

Nonprofit Business Plan Template

To help you get started we’ve created a nonprofit business plan outline. This business plan outline will work as a framework regardless of your nonprofit’s area of focus. With it, you’ll have a better idea of how to lay out your nonprofit business plan and what to include. We have also provided several questions and examples to help you create a detailed nonprofit business plan.

Download Your Free Outline

At Donorbox, we strive to make your nonprofit experience as productive as possible, whether through our donation software  or through our advice and guides on the  Nonprofit Blog . Find more free, downloadable resources in our Library .

Many nonprofits start with passion and enthusiasm but without a proper business plan. It’s a common misconception that just because an organization is labeled a “nonprofit,” it does not need to operate in any way like a business.

However, a nonprofit is a type of business, and many of the same rules that apply to a for-profit company also apply to a nonprofit organization.

As outlined above, your nonprofit business plan is a combination of your marketing plan , strategic plan, operational plan, impact plan, and financial plan. Remember, you don’t have to work from scratch. Be sure to use the nonprofit business plan outline we’ve provided to help create one of your own. 

It’s important to note that your nonprofit should not be set in stone—it can and should change and evolve. It’s a living organism. While your vision, values, and mission will likely remain the same, your nonprofit business plan may need to be revised from time to time. Keep your audience in mind and adjust your plan as needed.

Finally, don’t let your plan gather dust on a shelf! Print it out, put up posters on your office walls, and read from it during your team meetings. Use all the research, data, and ideas you’ve gathered and put them into action!

If you want more help with nonprofit management tips and fundraising resources, visit our Nonprofit Blog . We also have dedicated articles for starting a nonprofit in different states in the U.S., including Texas , Minnesota , Oregon , Arizona , Illinois , and more.

Learn about our all-in-one online fundraising tool, Donorbox, and its simple-to-use features on the website here .

Raviraj heads the sales and marketing team at Donorbox. His growth-hacking abilities have helped Donorbox boost fundraising efforts for thousands of nonprofit organizations.

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How to Write a Business Plan For a Nonprofit Organization + Template

Creating a business plan is essential for any business, but it can be especially helpful for nonprofits. A nonprofit business plan allows you to set goals and track progress over time. It can also help you secure funding from investors or grant-making organizations.

A well-crafted business plan not only outlines your vision for the organization but also provides a step-by-step process of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article will provide an overview of the key elements that every nonprofit founder should include in their business plan.

Download the Ultimate Nonprofit Business Plan Template

What is a Nonprofit Business Plan?

A nonprofit business plan is a formal written document that describes your organization’s purpose, structure, and operations. It is used to communicate your vision to potential investors or donors and convince them to support your cause.

The business plan should include information about your target market, financial projections, and marketing strategy. It should also outline the organization’s mission statement and goals.

Why Write a Nonprofit Business Plan?

A nonprofit business plan is required if you want to secure funding from grant-making organizations or investors.

A well-crafted business plan will help you:

• Define your organization’s purpose and goals
• Articulate your vision for the future
• Develop a step-by-step plan to achieve your goals
• Secure funding from investors or donors
• Convince potential supporters to invest in your cause

Entrepreneurs can also use this as a roadmap when starting your new nonprofit organization, especially if you are inexperienced in starting a nonprofit.

Writing an Effective Nonprofit Business Plan

The key is to tailor your business plan to the specific needs of your nonprofit. Here’s a quick overview of what to include:

Executive Summary

Organization overview, products, programs, and services, industry analysis, customer analysis, marketing plan, operations plan, management team.

• Financial Plan

The executive summary of a nonprofit business plan is a one-to-two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your nonprofit organization
• Provide a short summary of the key points of each section of your business plan.
• Organize your thoughts in a logical sequence that is easy for the reader to follow.
• Include information about your organization’s management team, industry analysis, competitive analysis, and financial forecast.

This section should include a brief history of your nonprofit organization. Include a short description of how and why you started it and provide a timeline of milestones the organization has achieved.

If you are just starting your nonprofit, you may not have a long history. Instead, you can include information about your professional experience in the industry and how and why you conceived your new nonprofit idea. If you have worked for a similar organization before or have been involved in a nonprofit before starting your own, mention this.

You will also include information about your chosen n onprofit business model and how it is different from other nonprofits in your target market.

This section is all about what your nonprofit organization offers. Include information about your programs, services, and any products you may sell.

Describe the products or services you offer and how they benefit your target market. Examples might include:

• A food bank that provides healthy meals to low-income families
• A job training program that helps unemployed adults find jobs
• An after-school program that helps kids stay out of gangs
• An adult literacy program that helps adults learn to read and write

Include information about your pricing strategy and any discounts or promotions you offer. Examples might include membership benefits, free shipping, or volume discounts.

If you offer more than one product or service, describe each one in detail. Include information about who uses each product or service and how it helps them achieve their goals.

If you offer any programs, describe them in detail. Include information about how often they are offered and the eligibility requirements for participants. For example, if you offer a job training program, you might include information about how often the program is offered, how long it lasts, and what kinds of jobs participants can expect to find after completing the program.

The industry or market analysis is an important component of a nonprofit business plan. Conduct thorough market research to determine industry trends, identify your potential customers, and the potential size of this market. 

Questions to answer include:

• What part of the nonprofit industry are you targeting?
• Who are your competitors?
• How big is the market?
• What trends are happening in the industry right now?

You should also include information about your research methodology and sources of information, including company reports and expert opinions.

As an example, if you are starting a food bank, your industry analysis might include information about the number of people in your community who are considered “food insecure” (they don’t have regular access to enough nutritious food). You would also include information about other food banks in your area, how they are funded, and the services they offer.

For each of your competitors, you should include a brief description of their organization, their target market, and their competitive advantage. To do this, you should complete a SWOT analysis.

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a helpful tool to assess your nonprofit’s current position and identify areas where you can improve.

Some questions to consider when conducting a SWOT analysis include:

• Strengths : What does your nonprofit do well?
• Weaknesses : What areas could your nonprofit improve?
• Opportunities : What trends or changes in the industry could you take advantage of?
• Threats : What trends or changes in the industry could hurt your nonprofit’s chances of success?

After you have identified your nonprofit’s strengths, weaknesses, opportunities, and threats, you can develop strategies to improve your organization.

For example, if you are starting a food bank, your SWOT analysis might reveal that there is a need for more food banks in your community. You could use this information to develop a marketing strategy to reach potential donors who might be interested in supporting your organization.

If you are starting a job training program, your SWOT analysis might reveal that there is a need for more programs like yours in the community. You could use this information to develop a business plan and marketing strategy to reach potential participants who might be interested in enrolling in your program.

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, if you are starting a job training program for unemployed adults, your target audience might be low-income adults between the ages of 18 and 35. Your customer analysis would include information about their needs (e.g., transportation, childcare, job readiness skills) and wants (e.g., good pay, flexible hours, benefits).

If you have more than one target audience, you will need to provide a separate customer analysis for each one.

You can include information about how your customers make the decision to buy your product or use your service. For example, if you are starting an after-school program, you might include information about how parents research and compare programs before making a decision.

You should also include information about your marketing strategy and how you plan to reach your target market. For example, if you are starting a food bank, you might include information about how you will promote the food bank to the community and how you will get the word out about your services.

Develop a strategy for targeting those customers who are most likely to use your program, as well as those that might be influenced to buy your products or nonprofit services with the right marketing.

This part of the business plan is where you determine how you are going to reach your target market. This section of your nonprofit business plan should include information about your marketing goals, strategies, and tactics.

• What are your marketing goals? Include information about what you hope to achieve with your marketing efforts, as well as when and how you will achieve it.
• What marketing strategies will you use? Include information about public relations, advertising, social media, and other marketing tactics you will use to reach your target market.
• What tactics will you use? Include information about specific actions you will take to execute your marketing strategy. For example, if you are using social media to reach your target market, include information about which platforms you will use and how often you will post.

Your marketing strategy should be clearly laid out, including the following 4 Ps.

• Product/Service : Make sure your product, service, and/or program offering is clearly defined and differentiated from your competitors, including the benefits of using your service.
• Price : How do you determine the price for your product, services, and/or programs? You should also include a pricing strategy that takes into account what your target market will be willing to pay and how much the competition within your market charges.
• Place : Where will your target market find you? What channels of distribution will you use to reach them?
• Promotion : How will you reach your target market? You can use social media or write a blog, create an email marketing campaign, post flyers, pay for advertising, launch a direct mail campaign, etc.

For example, if you are starting a job training program for unemployed adults, your marketing strategy might include partnering with local job centers and adult education programs to reach potential participants. You might also promote the program through local media outlets and community organizations.

Your marketing plan should also include a sales strategy, which includes information about how you will generate leads and convert them into customers.

You should also include information about your paid advertising budget, including an estimate of expenses and sales projections.

This part of your nonprofit business plan should include the following information:

• How will you deliver your products, services and/or programs to your target market? For example, if you are starting a food bank, you will need to develop a system for collecting and storing food donations, as well as distributing them to the community.
• How will your nonprofit be structured? For example, will you have paid staff or volunteers? How many employees will you need? What skills and experience will they need to have?
• What kind of facilities and equipment will you need to operate your nonprofit? For example, if you are starting a job training program, you will need space to hold classes, as well as computers and other office equipment.
• What are the day-to-day operations of your nonprofit? For example, if you are starting a food bank, you will need to develop a system for accepting and sorting food donations, as well as distributing them to the community.
• Who will be responsible for each task? For example, if you are starting a job training program, you will need to identify who will be responsible for recruiting participants, teaching classes, and placing graduates in jobs.
• What are your policies and procedures? You will want to establish policies related to everything from employee conduct to how you will handle donations.
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is the section of the business plan where you elaborate on the day-to-day execution of your nonprofit. This is where you really get into the nitty-gritty of how your organization will function on a day-to-day basis.

This section of your nonprofit business plan should include information about the individuals who will be running your organization.

• Who is on your team? Include biographies of your executive director, board of directors, and key staff members.
• What are their qualifications? Include information about their education, work experience, and skills.
• What are their roles and responsibilities? Include information about what each team member will be responsible for, as well as their decision-making authority.
• What is their experience in the nonprofit sector? Include information about their work with other nonprofits, as well as their volunteer experiences.

This section of your plan is important because it shows that you have a team of qualified individuals who are committed to the success of your nonprofit.

Nonprofit Financial Plan

This section of your nonprofit business plan should include the following information:

• Your budget. Include information about your income and expenses, as well as your fundraising goals.
• Your sources of funding. Include information about your grants, donations, and other sources of income.
• Use of funds. Include information about how you will use your income to support your programs and operations.

This section of your business plan is important because it shows that you have a clear understanding of your organization’s finances. It also shows that you have a plan for raising and managing your funds.

Now, include a complete and detailed financial plan. This is where you will need to break down your expenses and revenue projections for the first 5 years of operation. This includes the following financial statements:

Income Statement

Your income statement should include:

• Revenue : how will you generate revenue?
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, what is the net income or loss? 

Sample Income Statement for a Startup Nonprofit Organization

Balance Sheet

Include a balance sheet that shows what you have in terms of assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Nonprofit Organization

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Income : All of the revenue coming in from clients.
• Expenses : All of your monthly bills and expenses. Include operating, marketing and capital expenditures.
• Net Cash Flow : The difference between income and expenses for each month after they are totaled and deducted from each other. This number is the net cash flow for each month.

Using your total income and expenses, you can project an annual cash flow statement. Below is a sample of a projected cash flow statement for a startup nonprofit.

Sample Cash Flow Statement for a Startup Nonprofit Organization

Fundraising Plan

This section of your nonprofit business plan should include information about your fundraising goals, strategies, and tactics.

• What are your fundraising goals? Include information about how much money you hope to raise, as well as when and how you will raise it.
• What fundraising strategies will you use? Include information about special events, direct mail campaigns, online giving, and grant writing.
• What fundraising tactics will you use? Include information about volunteer recruitment, donor cultivation, and stewardship.

Now include specific fundraising goals, strategies, and tactics. These could be annual or multi-year goals. Below are some examples:

Goal : To raise $50,000 in the next 12 months.

Strategy : Direct mail campaign

• Create a mailing list of potential donors
• Develop a direct mail piece
• Mail the direct mail piece to potential donors

Goal : To raise $100,000 in the next 24 months.

Strategy : Special event

• Identify potential special event sponsors
• Recruit volunteers to help with the event
• Plan and execute the special event

Goal : To raise $250,000 in the next 36 months.

Strategy : Grant writing

• Research potential grant opportunities
• Write and submit grant proposals
• Follow up on submitted grants

This section of your business plan is important because it shows that you have a clear understanding of your fundraising goals and how you will achieve them.

You will also want to include an appendix section which may include:

• Your complete financial projections
• A complete list of your nonprofit’s policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• A list of your hard assets and equipment with purchase dates, prices paid and any other relevant information
• A list of your soft assets with purchase dates, prices paid and any other relevant information
• Biographies and/or resumes of the key members of your organization
• Your nonprofit’s bylaws
• Your nonprofit’s articles of incorporation
• Your nonprofit’s most recent IRS Form 990
• Any other relevant information that may be helpful in understanding your organization

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your nonprofit organization. It not only outlines your vision but also provides a step-by-step process of how you are going to accomplish it. Sometimes it may be difficult to get started, but once you get the hang of it, writing a business plan becomes easier and will give you a sense of direction and clarity about your nonprofit organization.  

Finish Your Nonprofit Business Plan in 1 Day!

Other helpful articles.

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How To Create the Articles of Incorporation for Your Nonprofit Organization + Template

How to Develop a Nonprofit Communications Plan + Template

How to Write a Stand-Out Purpose Statement + Examples

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A nonprofit business plan ensures your organization’s fundraising and activities align with your core mission.

Every nonprofit needs a mission statement that demonstrates how the organization will support a social cause and provide a public benefit. A nonprofit business plan fleshes out this mission statement in greater detail. These plans include many of the same elements as a for-profit business plan, with a focus on fundraising, creating a board of directors, raising awareness, and staying compliant with IRS regulations. A nonprofit business plan can be instrumental in getting your organization off the ground successfully.

Start with your mission statement

The mission statement is foundational for your nonprofit organization. The IRS will review your mission statement in determining whether to grant you tax-exempt status. This statement also helps you recruit volunteers and staff, fundraise, and plan activities for the year.

[Read more: Writing a Mission Statement: A Step-by-Step Guide ]

Therefore, you should start your business plan with a clear mission statement in the executive summary. The executive summary can also cover, at a high level, the goals, vision, and unique strengths of your nonprofit organization. Keep this section brief, since you will be going into greater detail in later sections.

Identify a board of directors

Many business plans include a section identifying the people behind the operation: your key leaders, volunteers, and full-time employees. For nonprofits, it’s also important to identify your board of directors. The board of directors is ultimately responsible for hiring and managing the CEO of your nonprofit.

“Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission,” wrote the Council of Nonprofits.

As such, identify members of your board in your business plan to give potential donors confidence in the management of your nonprofit.

Be as realistic as possible about the impact you can make with the funding you hope to gain.

Describe your organization’s activities

In this section, provide more information about what your nonprofit does on a day-to-day basis. What products, training, education, or other services do you provide? What does your organization do to benefit the constituents identified in your mission statement? Here’s an example from the American Red Cross, courtesy of DonorBox :

“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 service.”

This section should be detailed and get into the operational weeds of how your business delivers on its mission statement. Explain the strategies your team will take to service clients, including outreach and marketing, inventory and equipment needs, a hiring plan, and other key elements.

Write a fundraising plan

This part is the most important element of your business plan. In addition to providing required financial statements (e.g., the income statement, balance sheet, and cash flow statement), identify potential sources of funding for your nonprofit. These may include individual donors, corporate donors, grants, or in-kind support. If you are planning to host a fundraising event, put together a budget for that event and demonstrate the anticipated impact that event will have on your budget.

Create an impact plan

An impact plan ties everything together. It demonstrates how your fundraising and day-to-day activities will further your mission. For potential donors, it can make a very convincing case for why they should invest in your nonprofit.

“This section turns your purpose and motivation into concrete accomplishments your nonprofit wants to make and sets specific goals and objectives,” wrote DonorBox . “These define the real bottom line of your nonprofit, so they’re the key to unlocking support. Funders want to know for whom, in what way, and exactly how you’ll measure your impact.”

Be as realistic as possible about the impact you can make with the funding you hope to gain. Revisit your business plan as your organization grows to make sure the goals you’ve set both align with your mission and continue to be within reach.

[Read more: 8 Signs It's Time to Update Your Business Plan ]

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Raise More & Grow Your Nonprofit.

The complete guide to writing a nonprofit business plan.

August 14, 2019

Leadership & Management

July 7, 2022

TABLE OF CONTENTS

Statistics from the National Center for Charitable Statistics (NCCS) show that there are over 1.5 million nonprofit organizations currently operating in the U.S. alone. Many of these organizations are hard at work helping people in need and addressing the great issues of our time. However, doing good work doesn’t necessarily translate into long-term success and financial stability. Other information has shown that around 12% of non-profits don’t make it past the 5-year mark, and this number expands to 17% at the 10-year mark.

12% of non-profits don’t make it past the 5-year mark and 17% at the 10-year mark

There are a variety of challenges behind these sobering statistics. In many cases, a nonprofit can be sunk before it starts due to a lack of a strong nonprofit business plan. Below is a complete guide to understanding why a nonprofit needs a business plan in place, and how to construct one, piece by piece.

The purpose of a nonprofit business plan

A business plan for a nonprofit is similar to that of a for-profit business plan, in that you want it to serve as a clear, complete roadmap for your organization. When your plan is complete, questions such as "what goals are we trying to accomplish?" or "what is the true purpose of our organization?" should be clear and simple to answer.

Your nonprofit business plan should provide answers to the following questions:

1. What activities do you plan to pursue in order to meet the organization’s high level goals?

2. What's your plan on getting revenue to fund these activities?

3. What are your operating costs and specifically how do these break down?

Note that there’s a difference between a business plan and a strategic plan, though there may be some overlap. A strategic plan is more conceptual, with different ideas you have in place to try and meet the organization’s greater vision (such as fighting homelessness or raising climate change awareness). A business plan serves as an action plan because it provides, in as much detail as possible, the specifics on how you’re going to execute your strategy.

More Reading

• What is the Difference Between a Business Plan and a Strategic Plan?
• Business Planning for Nonprofits

Creating a nonprofit business plan

With this in mind, it’s important to discuss the individual sections of a nonprofit business plan. Having a proper plan in a recognizable format is essential for a variety of reasons. On your business’s end, it makes sure that as many issues or questions you may encounter are addressed up front. For outside entities, such as potential volunteers or donors, it shows that their time and energy will be managed well and put to good use. So, how do you go from conceptual to concrete?

Step 1: Write a mission statement

‍ Having a mission statement is essential for any company, but even more so for nonprofits. Your markers of success are not just how the organization performs financially, but the impact it makes for your cause.

One of the easiest ways to do this is by creating a mission statement. A strong mission statement clarifies why your organization exists and determines the direction of activities.

At the head of their ethics page , NPR has a mission statement that clearly and concisely explains why they exist. From this you learn:

• The key point of their mission: creating a more informed public that understands new ideas and cultures
• Their mechanism of executing that vision: providing and reporting news/info that meets top journalistic standards
• Other essential details: their partnership with their membership statement

You should aim for the same level of clarity and brevity in your own mission statement.

The goal of a mission statement isn’t just about being able to showcase things externally, but also giving your internal team something to realign them if they get off track.

For example, if you're considering a new program or services, you can always check the idea against the mission statement. Does it align with your higher level goal and what your organization is ultimately trying to achieve? A mission statement is a compass to guide your team and keep the organization aligned and focused.

Step 2: Collect the data

‍ You can’t prepare for the future without some data from the past and present. This can range from financial data if you’re already in operation to secured funding if you’re getting ready to start.

Data related to operations and finances (such as revenue, expenses, taxes, etc.) is crucial for budgeting and organizational decisions.

You'll also want to collect data about your target donor. Who are they in terms of their income, demographics, location, etc. and what is the best way to reach them? Every business needs to market, and answering these demographic questions are crucial to targeting the right audience in a marketing campaign. You'll also need data about marketing costs collected from your fundraising, marketing, and CRM software and tools. This data can be extremely important for demonstrating the effectiveness of a given fundraising campaign or the organization as a whole.  

Then there is data that nonprofits collect from third-party sources as to how to effectively address their cause, such as shared data from other nonprofits and data from governments.

By properly collecting and interpreting the above data, you can build your nonprofit to not only make an impact, but also ensure the organization is financially sustainable.

Step 3: Create an outline

Before you begin writing your plan, it’s important to have an outline of the  sections of your plan. Just like an academic essay, it’s easier to make sure all the points are addressed by taking inventory of high level topics first. If you create an outline and find you don’t have all the materials you need to fill it, you may need to go back to the data collection stage.

Writing an outline gives you something simple to read that can easily be circulated to your team for input. Maybe some of your partners will want to emphasize an area that you missed or an area that needs more substance.

Having an outline makes it easier for you to create an organized, well-flowing piece. Each section needs to be clear on its own, but you also don’t want to be overly repetitive. 

As a side-note, one area where a lot of business novices  stall in terms of getting their plans off the ground is not knowing what format to choose or start with. The good news is there are a lot of resources available online for you to draw templates for from your plan, or just inspire one of your own.

Using a business plan template

You may want to use a template as a starting point for your business plan. The major benefit here is that a lot of the outlining work that we mentioned is already done for you. However, you may not want to follow the template word for word. A nonprofit business plan may require additional sections or parts that aren’t included in a conventional business plan template.

The best way to go about this is to try and focus less on copying the template, and more about copying the spirit of the template. For example, if you see a template that you like, you can keep the outline, but you may want to change the color scheme and font to better reflect your brand. And of course, all your text should be unique.

When it comes to adding a new section to a business plan template, for the most part, you can use your judgment. We will get into specific sections in a bit, but generally, you just want to pair your new section with the existing section that makes the most sense. For example, if your non-profit has retail sales as a part of a financial plan, you can include that along with the products, services and programs section.

• Free Nonprofit Sample Business Plans - Bplans
• Non-Profit Business Plan Template - Growthink
• Sample Nonprofit Business Plans - Bridgespan
• Nonprofit Business Plan Template - Slidebean
• 23+ Non Profit Business Plan Templates - Template.net

Nonprofit business plan sections

The exact content is going to vary based on the size, purpose, and nature of your nonprofit. However, there are certain sections that every business plan will need to have for investors, donors, and lenders to take you seriously. Generally, your outline will be built around the following main sections:

1. Executive summary

Many people write this last, even though it comes first in a business plan. This is because the executive summary is designed to be a general summary of the business plan as a whole. Naturally, it may be easier to write this after the rest of the business plan has been completed.

After reading your executive summary a person should ideally have a general idea of what the entire plan covers. Sometimes, a person may be interested in learning about your non-profit, but doesn’t have time to read a 20+ page document. In this case, the executive summary could be the difference between whether or not you land a major donor. 

As a start, you want to cover the basic need your nonprofit services, why that need exists, and the way you plan to address that need. The goal here is to tell the story as clearly and and concisely as possible. If the person is sold and wants more details, they can read through the rest of your business plan. 

2. Products/Services/Programs

This is the space where you can clarify exactly what your non-profit does. Think of it as explaining the way your nonprofit addresses that base need you laid out earlier. This can vary a lot based on what type of non-profit you’re running. 

This page gives us some insight into the mechanisms Bucks County Historical Society uses to further their mission, which is “to educate and engage its many audiences in appreciating the past and to help people find stories and meanings relevant to their lives—both today and in the future.”

They accomplish this goal through putting together both permanent exhibits as well as regular events at their primary museum. However, in a non-profit business plan, you need to go further. 

It’s important here not only to clearly explain who benefits from your services, but also the specific details how those services are provided. For example, saying you “help inner-city school children” isn’t specific enough. Are you providing education or material support? Your non-profit business plan readers need as much detail as possible using simple and clear language. 

3. Marketing

For a non-profit to succeed, it needs to have a steady stream of both donors and volunteers. Marketing plays a key role here as it does in a conventional business. This section should outline who your target audience is, and what you’ve already done/plan on doing to reach this audience. How you explain this is going to vary based on what stage your non-profit is in. We’ll split this section to make it more clear.

Nonprofits not in operation

‍ Obviously, it’s difficult to market an idea effectively if you’re not in operation, but you still need to have a marketing plan in place. People who want to support your non-profit need to understand your marketing plan to attract donors. You need to profile all the data you have about your target market and outline how you plan to reach this audience.

Nonprofits already in operation

‍ Marketing plans differ greatly for nonprofits already in operation. If your nonprofit is off the ground, you want to include data about your target market as well, along with other key details.  Describe all your current marketing efforts, from events to general outreach, to conventional types of marketing like advertisements and email plans. Specific details are important. By the end of this, the reader should know:

• What type of marketing methods your organization prefers
• Why you’ve chosen these methods
• The track record of success using these methods
• What the costs and ROI of a marketing campaign

4. Operations

This is designed to serve as the “how” of your Products/Services/Programs section.

For example, if your goal is to provide school supplies for inner-city schoolchildren, you’ll need to explain how you will procure the supplies and distribute them to kids in need. Again, detail is essential. A reader should be able to understand not only how your non-profit operates on a daily basis, but also how it executes any task in the rest of the plan.

If your marketing plan says that you hold community events monthly to drum up interest. Who is in charge of the event? How are they run? How much do they cost?  What personnel or volunteers are needed for each event?  Where are the venues?

This is also a good place to cover additional certifications or insurance that your non-profit needs in order to execute these operations, and your current progress towards obtaining them. 

Your operations section should also have a space dedicated to your team. The reason for this is, just like any other business plan, is that the strength of an organization lies in the people running it.

For example, let’s look at this profile from The Nature Conservancy . The main points of the biography are to showcase Chief Development Officer Jim Asp’s work history as it is relevant to his job. You’ll want to do something similar in your business plan’s team section.

Equally important is making sure that you cover any staff changes that you plan to implement in the near future in your business plan. The reason for this is that investors/partners may not want to sign on assuming that one leadership team is in place, only for it to change when the business reaches a certain stage. 

The sections we’ve been talking about would also be in a traditional for profit business plan. We start to deviate a bit at this point. The impact section is designed to outline the social change you plan to make with your organization, and how your choices factor into those goals.

Remember the thoughts that go into that mission statement we mentioned before? This is your chance to show how you plan to address that mission with your actions, and how you plan to track your progress.

Let’s revisit the idea of helping inner-city school children by providing school supplies. What exactly is the metric you’re going to use to determine your success? For-profit businesses can have their finances as their primary KPI, but it’s not that easy for non-profits. Let’s say that your mission is to provide 1,000 schoolchildren in an underserved school district supplies for their classes. Your impact plan could cover two metrics:

• How many supplies are distributed
• Secondary impact (improved grades, classwork completed, etc).

The primary goal of this section is to transform that vision into concrete, measurable goals and objectives. A great acronym to help you create these are S.M.A.R.T. goals which stands for: specific, measurable, attainable, relevant, and timely. ‍

Vitamin Angels does a good job of showing how their action supports the mission. Their goal of providing vitamins to mothers and children in developing countries has a concrete impact when we look at the numbers of how many children they service as well as how many countries they deliver to. As a non-profit business plan, it’s a good idea to include statistics like these to show exactly how close you are to your planned goals. 

6. Finances

Every non-profit needs funding to operate, and this all-important section details exactly how you plan to cover these financial needs. Your business plan can be strong in every other section, but if your financial planning is flimsy, it’s going to prove difficult to gather believers to your cause.

It's important to paint a complete, positive picture of your fundraising plans and ambitions. Generally, this entails the following parts:

• Current financial status, such as current assets, cash on hand, liabilities
• Projections based off of your existing financial data and forms
• Key financial documents, such as a balance sheet, income statements, and cash flow sheet
• Any grants or major contributions received
• Your plan for fundraising (this may overlap with your marketing section which is okay)
• Potential issues and hurdles to your funding plan
• Your plans to address those issues
• How you'll utilize surplus donations
• Startup costs (if your non-profit is not established yet)

In general, if you see something else that isn’t accounted for here, it’s better to be safe than sorry, and put the relevant information in. It’s better to have too much information than too little when it comes to finances, especially since there is usually a clear preference for transparent business culture.

• ‍ How to Make a Five-Year Budget Plan for a Nonprofit ‍
• Financial Transparency - National Council of Nonprofits

7. Appendix

Generally, this serves as a space to attach additional documents and elements that you may find useful for your business plan. This can include things like supplementary charts or a list of your board of directors. 

This is also a good place to put text or technical information that you think may be relevant to your business plan, but might be long-winded or difficult to read. A lot of the flow and structure concerns you have for a plan don’t really apply with an appendix.

In summary, while a non-profit may have very different goals than your average business, the ways that they reach those goals do have a lot of similarities with for-profit businesses. The best way to ensure your success is to have a clear, concrete vision and path to different milestones along the way. A solid, in-depth business plan also gives you something to refer back to when you are struggling and not sure where to turn.

Alongside your business plan, you also want to use tools and resources that promote efficiency at all levels. For example, every non-profit needs a consistent stream of donations to survive, so consider using a program like GiveForms that creates simple, accessible forms for your donors to easily make donations. Accounting and budgeting for these in your plans can pay dividends later on.

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Free Nonprofit Business Plan Templates

By Joe Weller | September 18, 2020

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In this article, we’ve rounded up the most useful list of nonprofit business plan templates, all free to download in Word, PDF, and Excel formats.

Included on this page, you’ll find a one-page nonprofit business plan template , a fill-in-the-blank nonprofit business plan template , a startup nonprofit business planning timeline template , and more. Plus, we provide helpful tips for creating your nonprofit business plan .

Nonprofit Business Plan Template

Use this customizable nonprofit business plan template to organize your nonprofit organization’s mission and goals and convey them to stakeholders. This template includes space for information about your nonprofit’s background, objectives, management team, program offerings, market analysis, promotional activities, funding sources, fundraising methods, and much more. 

Download Nonprofit Business Plan Template

One-Page Business Plan for Nonprofit Template

This one-page nonprofit business plan template has a simple and scannable design to outline the key details of your organization’s strategy. This template includes space to detail your mission, vision, and purpose statements, as well as the problems you aim to solve in your community, the people who benefit from your program offerings, your key marketing activities, your financial goals, and more.

Download One-Page Business Plan for Nonprofit Template

Excel | Word | PDF

For additional resources, including an example of a one-page business plan , visit “ One-Page Business Plan Templates with a Quick How-To Guide .”

Fill-In-the-Blank Nonprofit Business Plan Template

Use this fill-in-the-blank template as the basis for building a thorough business plan for a nonprofit organization. This template includes space to describe your organization’s background, purpose, and main objectives, as well as key personnel, program and service offerings, market analysis, promotional activities, fundraising methods, and more. 

Download Fill-In-the-Blank Nonprofit Business Plan Template

For additional resources that cater to a wide variety of organizations, visit “ Free Fill-In-the-Blank Business Plan Templates .”

Startup Nonprofit Business Planning Template with Timeline

Use this business planning template to organize and schedule key activities for your business. Fill in the cells according to the due dates, and color-code the cells by phase, owner, or category to provide a visual timeline of progress.

Download Startup Nonprofit Business Planning Template with Timeline

Excel | Smartsheet

Nonprofit Business Plan Template for Youth Program

Use this template as a foundation for building a powerful and attractive nonprofit business plan for youth programs and services. This template has all the core components of a nonprofit business plan. It includes room to detail the organization’s background, management team key personnel, current and future youth program offerings, promotional activities, operations plan, financial statements, and much more.

Download Nonprofit Business Plan Template for Youth Program

Word | PDF  | Google Doc

Sample Nonprofit Business Plan Outline Template

You can customize this sample nonprofit business plan outline to fit the specific needs of your organization. To ensure that you don’t miss any essential details, use this outline to help you prepare and organize the elements of your plan before filling in each section.

Download Sample Nonprofit Business Plan Outline Template

Nonprofit Startup Business Planning Checklist Template

Use this customizable business planning checklist as the basis for outlining the necessary steps to get your nonprofit organization up and running. You can customize this checklist to fit your individual needs. It includes essential steps, such as conducting a SWOT analysis , fulfilling the research requirements specific to your state, conducting a risk assessment , defining roles and responsibilities, creating a portal for board members, and other tasks to keep your plan on track.

Download Nonprofit Startup Business Planning Checklist Template

Tips to Create Your Nonprofit Business Plan

Your nonprofit business plan should provide your donors, volunteers, and other key stakeholders with a clear picture of your overarching mission and objectives. Below, we share our top tips for ensuring that your plan is attractive and thorough.

• Develop a Strategy First: You must aim before you fire if you want to be effective. In other words, develop a strategic plan for your nonprofit in order to provide your team with direction and a roadmap before you build your business plan.
• Save Time with a Template: No need to start from scratch when you can use a customizable nonprofit business plan template to get started. (Download one of the options above.)
• Start with What You Have: With the exception of completing the executive summary, which you must do last, you aren’t obligated to fill in each section of the plan in order. Use the information you have on hand to begin filling in the various parts of your business plan, then conduct additional research to fill in the gaps.
• Ensure Your Information Is Credible: Back up all the details in your plan with reputable sources that stakeholders can easily reference.
• Be Realistic: Use realistic assumptions and numbers in your financial statements and forecasts. Avoid the use of overly lofty or low-lying projections, so stakeholders feel more confident about your plan. 
• Strive for Scannability: Keep each section clear and concise. Use bullet points where appropriate, and avoid large walls of text. 
• Use Visuals: Add tables, charts, and other graphics to draw the eye and support key points in the plan.
• Be Consistent: Keep the voice and formatting (e.g., font style and size) consistent throughout the plan to maintain a sense of continuity.
• Stay True to Your Brand: Make sure that the tone, colors, and overall style of the business plan are a true reflection of your organization’s brand.
• Proofread Before Distribution: Prior to distributing the plan to stakeholders, have a colleague proofread the rough version to check for errors and ensure that the plan is polished.
• Don’t Set It and Forget It: You should treat your nonprofit business plan as a living document that you need to review and update on a regular basis — as objectives change and your organization grows.
• Use an Effective Collaboration Tool: Use an online tool to accomplish the following: collaborate with key personnel on all components of the business plan; enable version control for all documents; and keep resources in one accessible place.

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When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

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Nonprofit Business Plan: A Comprehensive Guide

• by Jess Convocar on February 21, 2024
• last update on May 06, 2024
• Reading Time: 7 minutes

Like any other business, nonprofit organizations need careful, structured planning to ensure sustainable growth. This is possible by creating a business plan that not only serves as a roadmap but also helps in attracting donors and volunteers needed to bring the organization’s vision to fruition.

Crafting the perfect business plan involves many things, but the most important part is understanding what it should look like and how it can help the organization forward its mission. This guide simplifies the process, breaks down its unique components, and provides step-by-step instructions on how to write a nonprofit business plan.

What is a business plan for nonprofits?

A business plan for nonprofits is a strategic document that outlines a nonprofit organization’s goals and operational approach. While similar to for-profit business plans, the focus here is on achieving social impact rather than financial profit.

Projects implemented by nonprofit organizations typically revolve around fostering social welfare, advocacy, education, or humanitarian aid. For instance, a nonprofit working to address homelessness might outline projects such as providing shelter and meals, offering job training programs, and collaborating with local agencies to advocate for affordable housing policies.

A typical business plan for nonprofits includes:

• The nonprofit’s mission, which sets the foundation for the entire plan;
• Specific objectives,
• Fundraising strategies,
• Resource allocation,
• And how it plans to measure success in terms of societal or community benefit.

But one thing to note is that there is no one-size-fits-all plan. Every little detail incorporated into the plan must be tailored to the organization’s needs, where it currently stands, and how it can contribute to its primary purpose – guiding the nonprofit to success.

Why Your Nonprofit Needs a Business Plan

A good plan does not only help attract external support but also benefits the organization internally. Listed below are the key reasons why your nonprofit needs a business plan:

Clarity of Mission, Vision, and Strategic Direction

Running a nonprofit organization isn’t the easiest task, and there may be times when you question whether you’re truly making an impact. Having a business plan gives you a perspective of the progress you’ve made and provides a distinct path moving forward.

This clear-cut framework ensures that the mission, vision, and strategic direction remain focused, helping the nonprofit make informed decisions and navigate challenges with purpose.

Proper Resource Planning and Financial Management

Poor financial management can lead to many problems, especially in nonprofits. With a business plan, this can easily be taken care of.

Since nonprofit organizations rely on various external funds, there should be an emphasis on resource planning and management. This involves forecasting the organization’s needs, such as financial, human, and technological resources, and strategically allocating them to support the mission and vision. Doing so also demonstrates fiscal responsibility to donors and stakeholders.

Strategic Fundraising and Sustainability

One of the most common and effective ways nonprofits gain support is through fundraising activities. A business plan helps you develop a targeted fundraising strategy that aligns with the organization’s goals. Clearly outlining the fundraising objectives, target audiences, and specific tactics provides a roadmap for effective resource mobilization.

Additionally, a structured plan attracts and retains donors by instilling confidence in them about the tangible impact their contributions can make.

Risk Management

A business plan is vital for developing strategies to handle risks and potential challenges. This proactive approach helps minimize the impact of unforeseen events, like economic recessions or natural disasters, on the nonprofit’s operations.

A robust risk management strategy not only saves time and money but also improves decision-making, avoids surprises, and, most importantly, prevents harm to the people your nonprofit serves.

Legal and Regulatory Compliance

Because the business plan already lays out how the organization works, it’s easier to understand and adhere to nonprofit laws like tax exemption and revenue regulations.

Dealing with these things from the start helps prevent potential problems, maintains transparency, and builds trust with stakeholders. This allows you to focus on carrying out the mission without legal conflicts.

How to Create a Business Plan Strategy

When gearing up to create a business plan for your nonprofit organization, it’s important to begin by thoroughly understanding the unique aspects of your mission. This solid foundation will guide you through the next steps of crafting a well-thought-out plan, which includes:

1. Create a strategy

Before anything else, you must identify your why .

Ask yourself what you want to happen. What does the organization stand for? Who does it serve? What do you hope for it to become?

If your long-term goal is to create a lasting impact and expand the community you serve, establish a strategy that mirrors your mission. Begin by assessing your organization’s current position, strengths, weaknesses, and opportunities. Based on your assessment, leverage the strengths and address weaknesses that may hinder progress.

Next, clearly define who your target audience is. Understand their specific needs and preferences to tailor your approach effectively.

Once the key factors have been determined and written down, it will serve as the starting point for the strategy.

2. Plan programs

The planning step is where you delve into the how. What are your plans to sustain and amplify the impact you aim to create?

Since you are not selling products or providing services to generate revenue, you’ll need to rely on fundraising events to support your cause. To do this effectively, create detailed program plans covering goals, activities, timelines, and expected outcomes. As always, ensure these plans align with your organization’s mission.

After establishing the programs, set up a monitoring system that tracks their effectiveness and evaluates them regularly. This helps you make informed changes as the nonprofit or the community’s needs evolve.

3. Ensure financial sustainability

Nonprofits receive financial support from various channels, such as individual donations, grants, sponsorships, and fundraising events. To ensure economic sustainability, building relationships with potential donors, individuals, institutions, and various funding sources is important to avoid relying too much on a single avenue.

In this sense, a well-thought-out budget is crucial for financial stability. Make sure to allocate resources carefully, considering program costs, administration expenses, and other needs. A clear and transparent budget not only aids in financial planning but also boosts trust with supporters.

4. Prioritize legal considerations

Even though dealing with changing rules might seem to lead to more paperwork than focusing on your mission, remember that compliance is as important as pursuing your organization’s goals. Some vital legal considerations include:

• Legal structure and registration
• Tax exemption (if applicable)
• Fundraising compliance
• Financial accountability
• Intellectual property (such as logos, trademarks, and copyrights)
• Data protection and privacy

Maintaining a good standing is crucial for obtaining licenses, securing grants and funding, protecting your organization’s reputation, and keeping the right to solicit support.

If you don’t have an in-house legal counsel, it’s a good idea to seek advice from experts who know nonprofit laws in your area when planning your business.

How to Write a Nonprofit Business Plan

Now that you’ve covered all the essential details, the next step is to create the business plan outline. There’s no strict format to follow, as it all depends on your organization’s specifics. However, make sure not to exclude these essential components when creating a nonprofit business plan:

1. Executive Summary

This part is a quick overview of the whole document. Since it’s the first thing people see in the business plan, it’s crucial to make it clear and interesting enough to grab their attention and encourage them to read the entire plan. Include the organization’s fundamentals – its history, objectives, and financing plans.

2. Organizational Overview

Provide a gist of who you are and who you serve. Here, express the organization’s mission, vision, and specific short-term and long-term goals.

3. Products, Programs, or Services Rendered

In this section, you must provide a detailed description of all the products and services mentioned in the executive summary. Highlight any unique aspects, such as innovative features and distinct advantages, that set you apart. State how instrumental these are to the success of your initiatives and how each one addresses the industry need.

4. Operational Plan

This is where you detail how your nonprofit will function on a day-to-day basis. Outline each team member’s daily, weekly, and monthly tasks, specifying responsibilities, timelines, and collaboration points to ensure a cohesive and efficient operation.

Additionally, spotlight any key processes, workflows, or systems necessary to achieve your mission.

5. Marketing Plan

The marketing plan should reflect the mission of the organization. Under this section, outline the strategies and channels to get your nonprofit out there. Include details about your target audience, methods for reaching them, and any promotional activities. This section may also cover partnerships, collaborations, and outreach efforts.

6. Financial Plan

The financial plan provides a comprehensive overview of your nonprofit’s financial health and projections. Include a budget, funding sources, and a breakdown of how funds will be allocated to support your operations and programs. This part is vital for demonstrating sustainability and helping make better-informed decisions.

7. Appendix

In the appendix, incorporate all the additional documents and information supporting the business plan’s main body. This may include resumes of key personnel, detailed financial statements, legal documents, or any other relevant materials.

Here’s a quick step-by-step guide on how to write a business plan:

• Start by outlining the executive summary providing a concise overview of the plan.
• Develop the organizational overview, which includes the mission and vision of the nonprofit.
• Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis to identify and address internal and external factors.
• Clearly articulate short-term and long-term goals and objectives.
• Describe the programs and activities that will help achieve these goals.
• Develop a marketing and outreach strategy to engage the community and attract support.
• Create a detailed financial plan, including budgets, revenue streams, and financial projections.
• Outline the governance and management structure, including roles and responsibilities.
• Detail monitoring and evaluation processes to assess program effectiveness.

Nonprofit Business Plan Template

Once you have a clear grasp of your organizational goals and strategies, here’s a sample nonprofit business plan template to get you started:

Frequently Asked Questions (FAQs) on Nonprofit Business Plan

Q: how often should a non-profit business plan be updated.

Although nonprofit plans usually set up a roadmap for at least three to five years, they should be regularly reviewed and updated to ensure they remain relevant and aligned with the organization’s purpose and changing external factors. For younger companies, an annual update with six monthly reviews may be sufficient, while more established nonprofits might opt for an annual review with quarterly check-ins.

Q: What role does evaluation play in a non-profit business plan?

Smaller nonprofits often conduct formal evaluations because their funders require it, but the benefits extend in both directions. Internally, evaluations help the organization assess its performance, impact, and effectiveness. In doing so, the nonprofit meets funder expectations and gains valuable insights for improvement, ensuring transparency and better alignment with its mission.

Q: How can a non-profit maintain adaptability in its strategies?

To stay adaptable, a nonprofit can follow three basic practices. First, keep the business plan up-to-date to align with the changing goals and environment. Second, stay on top of current industry trends to anticipate shifts in the landscape and prepare ahead of time. Lastly, revamp tools and approaches to ensure strategies remain innovative and effective.

Plan for Nonprofit Success with Convene

A well-crafted nonprofit business plan is crucial for success. To achieve this, cooperation is necessary within the internal teams and partners. However, communication can be a common roadblock, especially in a remote workplace.

This is where Convene comes into play.

Convene is a reliable board portal for nonprofits that facilitates effective planning through its interactive and secure features. Easily collaborate with everyone in the organization by leveraging Convene’s live meeting capabilities, such as annotations and digital sign-offs. Also, keep track of the updates and reports with its secure document management features.

Check out this page to learn more about Convene and how it can benefit your nonprofit organizations.

Related Articles

Board Portals for Nonprofits: A New Necessity?

A Definitive Guide to Effective Board Governance

Embracing Virtual Meetings for Nonprofits and Religious Institutions

Take your organization’s meetings to the next level.

Learn how Convene can give your boards a superior meeting experience. Enquire for a free demo with no cost or obligation.

Nonprofit Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Nonprofit Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Nonprofit Business Plan

You’ve come to the right place to write a nonprofit business plan.

We have helped over 10,000 entrepreneurs and business owners create nonprofit business plans and many have used them to start or grow their nonprofit organizations.

Sample Business Plan for a Nonprofit Organization

Below are links to the essential sections of our sample nonprofit business plan template to help you with the business planning process for your organization:

• Executive Summary – The Executive Summary of your nonprofit business plan explains your overall strategic plan to achieve success as a nonprofit business. It will include your nonprofit mission statement, goals, and objectives. This section will also include information on your target market, competition, and marketing strategy.
• Company Overview – Also called the Organization Overview, you will include the mission statement and history of your nonprofit including the organization’s goals and any significant milestones achieved to date.
• Industry Analysis – Sometimes referred to as the Market Analysis, this section will provide an overview of the nonprofit industry, trends, and the competitive landscape.
• Customer Analysis – The Customer Analysis section details the demographics and psychographics of your target audience and how you plan to reach them.
• Competitive Analysis – In your Competitive Analysis, you will identify and describe the competition, both direct and indirect, including other nonprofits with the same mission. You will also include your strategic plan for competing in the market.
• Marketing Plan – The Marketing Plan will detail your products, programs and services, your overall marketing strategies and tactics, and how you will measure success. It should include information on your target market, positioning, branding, communications, and lead generation.
• Operations Plan – Your operational plan will outline your day-to-day operations as well as the specific objectives needed to achieve your long-term business goals and how you will measure success.
• Management Team – In the Management Team section of your business plan, you should include the organizational structure of your nonprofit business as well as bios of your executive team and each board member.
• Financial Plan – The Financial Plan is one of the most important sections of your nonprofit business plan. You will establish your financial goals and include financial statements such as the income statement, balance sheet and cash flow statement to show how your nonprofit will be sustainable. This section should also include your fundraising plan including potential donors, fundraising goals, and other funding sources for your organization.

Next Section: Executive Summary >

Nonprofit Business Plan FAQs

What is a nonprofit business plan.

A nonprofit business plan is a roadmap to start a nonprofit organization or as the organization grows. Among other things, it outlines your charitable concept, identifies your target customers, presents your marketing plan and details your financial projections. Your non profit business plan should be a living document that is updated frequently as your nonprofit grows.

You can  easily complete your nonprofit business plan using our Nonprofit Business Plan Template here .

What Are the Main Types of Nonprofit Organizations?

There are many types of nonprofits, but each has a charitable mission to help an underserved segment of society. For example, there are nonprofits that serve the underserved youth, abused or abandoned animals, homeless, veterans and impoverished. There are also many nonprofits that support social awareness and global issues such as the environment, education and equality.

What Are the Main Sources of Revenue and Expenses for a Nonprofit Business?

The primary source of revenue for nonprofit organizations are monetary donations from sponsors, government grants and funding, and tax incentives through 501c3 designations.

The key expenses for a nonprofit business are staffing, supplies, rent, utilities, program costs and working capital to ensure the sustainability of the non profit. Proper business planning will help your nonprofit thrive financially.

This differs from a for profit business plan because you do not have to show profitability.  Nonprofits focus away from profit and instead center on accountability.

How Do You Secure Funding For Your Nonprofit Organization?

Most nonprofit organizations are likely to receive funding from banks, grants, and donors. As the majority of the funding will come from government grants and funds, grant proposals will need to be compiled and proposed to the necessary funding organization.

A solid business plan is key to showing investors you are well-prepared to start your own business.  A nonprofit business plan template is key to proper business planning and getting started quickly.

Where Can I Download a Nonprofit Business Plan PDF?

You can download our free nonprofit business plan template PDF . This nonprofit business plan outlines the key elements that should be used when drafting a business plan for a nonprofit organization.

Nonprofit Business Plan Template & Guide [Updated 2024]

Nonprofit business plan template.

Are you passionate about making a positive impact in your community? Are you part of a nonprofit organization or considering starting one? If so, you need a business plan and you’re in the right place to do that! 

Below, we’ll guide you through the essential elements of a nonprofit business plan, sharing valuable insights and a user-friendly template to set you on the path to success. 

• How to Write a Nonprofit Business Plan

Growthink’s nonprofit business plan template below is the result of 20+ years of research into the types of business plans that help nonprofit organizations (NPOs) to attract funding and achieve their goals.

Follow the links to each section of our nonprofit business plan template:

Nonprofit Organization Planning Resources & FAQs

Below are answers to the most common questions asked by nonprofits:

Is there a nonprofit business plan template I can download?

Yes. If you’d like to quickly and easily complete your non-profit business plan, download our non-profit business plan template and complete your business plan and financial model in hours.

Where can I download a nonprofit business plan PDF?

You can download our free nonprofit business plan template PDF here . This is a sample nonprofit business plan template you can use in PDF format.

What Is a nonprofit business plan?

A non-profit business plan describes your organization as it currently exists (which could be just an idea) and presents a road map for the next three to five years. It lays out your goals, challenges, and plans for meeting your goals. Your business plan should be updated frequently, as it is not meant to be stagnant. It is particularly important to create/update your business plan annually to make sure your nonprofit remains on track towards successfully fulfilling its mission.

A nonprofit business plan template is a tool used to help your nonprofit business quickly develop a roadmap for your business.

Why do you need a business plan for your nonprofit?

A nonprofit business plan serves many purposes. Most importantly, it forces you to think through and perfect your nonprofit’s strategic plan, it provides a roadmap to follow to grow your nonprofit, and it provides financial and other information major donors and board members need to know before they invest in your organization. Business planning can be a challenge and business plan templates help make this task easier for your team.

What are the types of nonprofit organizations (NPOs)?

There are several types of nonprofits. These are categorized by section 500(c) by the IRS for tax exempt purposes. Listed below, are some of the frequently filed sections:

Corporations formed under Act of Congress. An example is Federal Credit Unions.

Holding corporations for tax exempt organizations. This group holds title to the property for the exempt group.

This is the most popular type of NPO. Examples include educational, literary, charitable, religious, public safety, international and national amateur sports competitions, organizations committed to the prevention of cruelty towards animals or children, etc. Organizations that fall into this category are either a private foundation or a public charity. Examples include Getty Foundation, Red Cross, Easter Seals, etc.

Examples include social welfare groups, civil leagues, employee associations, etc. This category promotes charity, community welfare and recreational/educational goals.

Horticultural, labor and agricultural organizations get classified under this section. These organizations are instructive or educational and work to improve products, working conditions and efficiency.

Examples include real estate boards, business leagues, etc. They work to ameliorate business conditions.

Recreation and social clubs that promote pleasure and activities fall into this category.

Fraternal beneficiary associations and societies belong to this section.

Voluntary Employees’ beneficiary associations which provide benefits, accidents and life payments to members are a part of this section.

When filling in your nonprofit business plan template, include the type of nonprofit business you intend to be.

What are the primary sources of funding for nonprofit business plans?

The primary funding sources for most nonprofit organizations are donors, grants and bank loans. Donors are individuals that provide capital to start and grow your nonprofit. Major donors, as the name implies, write large checks and are often instrumental in launching nonprofits. Grants are given by organizations and others to achieve specific goals and often nonprofits qualify for them. Business loans, particularly for asset purchases like buildings and equipment, are also typically used by nonprofits.

Nonprofit organizations may also sell products or services, work with investors or develop their own investments. The expertise of the non-profit staff, members and board of directors will impact funding options for a nonprofit organization. The non profits mission, resources, goals and vision will all impact the funding sources a nonprofit business will place in it’s business plan as well.

How do you write a nonprofit business plan?

To most quickly write a nonprofit business plan, start with a template that lays out a nonprofit business plan outline. Answer the questions provided in the template and discuss them with your co-founders if applicable. A templated financial model will help you more easily complete your financial forecasts.

How do you start a nonprofit?

The key steps to starting a nonprofit are to choose the name of your organization, write your business plan and impact plan, incorporate your organization, apply for your IRS and state tax exemptions and get any required licenses and permits you need to operate.

How many nonprofit organizations are in the US?

According to the National Center for Charitable Statistics , there are approximately 1.54 million nonprofits registered in the United States (data pulled from registrations with the Internal Revenue Service (IRS)).

The nonprofit sector has annual expenses exceeding 2.46 trillion U.S dollars.

Does your action plan and fundraising plan belong in your plan?

Yes, both belong in your plan.

Include your action plan in the operations plan section.  

Your fundraising plan goes in your financial plan section. Here you will discuss how much money you must raise and from whom you plan to solicit these funds, as well as outlines your fundraising events. It should clearly outline your fundraising goals and potential donors.

Where do you include your non profit mission in your plan?

Nonprofit mission statements, or a vision statement, are extremely important as it lays the foundation for and presents the vision of your nonprofit. You should clearly detail your nonprofit mission statement in both the executive summary and organizational overview of your nonprofit plan.  

What do you include in a nonprofit’s financial projections?

Your financial projections must include an Income Statement, Balance Sheet and Cash Flow Statement. These statements within your business plan show how much money your organization will bring in from donors and customers/clients and how much your organization will spend.

The key purpose of your financial projections is to ensure you have enough money to keep your organization operating. They also can be an important component of your nonprofit business plan template, as donors, your board of directors, and others may review to understand financial requirements of your nonprofit.

How do nonprofit owners get paid?

Nonprofits function like for-profit businesses in that they often have employees who receive salaries. As such, as the owner, founder and/or CEO of a nonprofit, you can give yourself a salary. Many nonprofit CEOs, particularly those running large health, finance and educational organizations earn millions of dollars each year.

How much does it cost to start a nonprofit business?

Nonprofit organizations must complete Form 1023 with the IRS in order to get exemption status. The filing fee for this form is $600. If neither actual nor projected annual income for the organization exceeds $50,000, you can file form Form 1023-EZ which costs just $275.

In addition to the filing fee, there are other costs associated with starting a nonprofit organization based on the type of organization you are developing (for example, if you require buildings and equipment). Gathering information through the business planning process will help you accurately estimate costs for your nonprofit business plan template.

Where can I download a nonprofit business plan template doc?

You can download our free nonprofit business plan template DOC here . This is a nonprofit business plan template you can use in Microsoft DOC format.

What should be included in nonprofit plans?

A nonprofit business plan should include the following information: Executive Summary, Organization Overview, Products, Programs, and Services, Industry Analysis, Market Analysis of your Target Market, Marketing Plan, Operational Plan, Leadership Team/Organizational Structure, Financial Plan and Appendix (this should include all financial statements including cash flow statement, balance sheets and income statements).

Additional nonprofit resources

Below is a list of additional resources to help you get starting with your own nonprofit organization:

• How to Start a Non Profit Organization
• Sample Nonprofit Business Plan
• Nonprofit Marketing Plan + Template
• How to Write a Mission Statement for Your Nonprofit Organization
• NonProfit Business Plan PDF
• National Council of Nonprofits
• Nonprofit Quarterly
• The Fundraising Authority

Helpful Video Tips for Nonprofit Business Plans

Below are tips to create select sections of your nonprofit business plan:

How to Write Your Nonprofit Business Plan’s Executive Summary

Writing the management team section of your nonprofit business plan, how to write the operations plan of your nonprofit business plan, writing the customer analysis section of your nonprofit business plan, finish your non profit business plan in 1 day.

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Nonprofit Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your Nonprofit business plan today.

NONPROFIT BUSINESS PLAN OUTLINE

• Nonprofit Business Plan Home
• 1. Executive Summary
• 2. Organization Overview
• 3. Products, Programs, and Services
• 4. Industry Analysis
• 5. Customer Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Nonprofit Business Plan Summary

How to Write a Nonprofit Business Plan in 12 Steps (+ Free Template!)

The first step in starting a nonprofit is figuring out how to bring your vision into reality. If there’s any tool that can really help you hit the ground running, it’s a nonprofit business plan!

With a plan in place, you not only have a clear direction for growth, but you can also access valuable funding opportunities. 

Here, we’ll explore:

• Why a business plan is so important
• The components of a business plan
• How to write a business plan for a nonprofit specifically

We also have a few great examples, as well as a free nonprofit business plan template.

Let’s get planning!

What Is a Nonprofit Business Plan?

A nonprofit business plan is the roadmap to your organization’s future. It lays out where your nonprofit currently stands in terms of organizational structure, finances and programs. Most importantly, it highlights your goals and how you aim to achieve them!

These goals should be reachable within the next 3-5 years—and flexible! Your nonprofit business plan is a living document, and should be regularly updated as priorities shift. The point of your plan is to remind you and your supporters what your organization is all about.

This document can be as short as one page if you’re just starting out, or much longer as your organization grows. As long as you have all the core elements of a business plan (which we’ll get into below!), you’re golden.

Why Your Nonprofit Needs a Business Plan

While some people might argue that a nonprofit business plan isn’t strictly necessary, it’s well worth your time to make!

Here are 5 benefits of writing a business plan:

Secure funding and grants

Did you know that businesses with a plan are far more likely to get funding than those that don’t have a plan? It’s true!

When donors, investors, foundations, granting bodies and volunteers see you have a clear plan, they’re more likely to trust you with their time and money. Plus, as you achieve the goals laid out in your plan, that trust will only grow.

Solidify your mission

In order to sell your mission, you have to know what it is. That might sound simple, but when you have big dreams and ideas, it’s easy to get lost in all of the possibilities!

Writing your business plan pushes you to express your mission in the most straightforward way possible. As the years go on and new opportunities and ideas arise, your business plan will guide you back to your original mission.

From there, you can figure out if you’ve lost the plot—or if it’s time to change the mission itself!

Set goals and milestones 

The first step in achieving your goals is knowing exactly what they are. By highlighting your goals for the next 3-5 years—and naming their key milestones!—you can consistently check if you’re on track.

Nonprofit work is tough, and there will be points along the way where you wonder if you’re actually making a difference. With a nonprofit business plan in place, you can actually see how much you’ve achieved over the years.

Attract a board and volunteers

Getting volunteers and filling nonprofit board positions is essential to building out your organization’s team. Like we said before, a business plan builds trust and shows that your organization is legitimate. In fact, some boards of directors actually require a business plan in order for an organization to run!

An unfortunate truth is that many volunteers get taken advantage of . With a business plan in place, you can show that you’re coming from a place of professionalism.

Research and find opportunities

Writing a business plan requires some research!

Along the way, you’ll likely dig into information like:

• Who your ideal donor might be
• Where to find potential partners
• What your competitors are up to
• Which mentorships or grants are available for your organization
• What is the best business model for a nonprofit like yours

With this information in place, not only will you have a better nonprofit business model created—you’ll also have a more stable organization!

Free Nonprofit Business Plan Template

If you’re feeling uncertain about building a business plan from scratch, we’ve got you covered!

Here is a quick and simple free nonprofit business plan template.

Basic Format and Parts of a Business Plan

Now that you know what a business plan can do for your organization, let’s talk about what it actually contains!

Here are some key elements of a business plan:

First of all, you want to make sure your business plan follows best practices for formatting. After all, it’ll be available to your team, donors, board of directors, funding bodies and more!

Your nonprofit business plan should:

• Be consistent formatted
• Have standard margins
• Use a good sized font
• Keep the document to-the-point
• Include a page break after each section
• Be proofread

Curious about what each section of the document should look like?

Here are the essential parts of a business plan:

• Executive Summary: This is your nonprofit’s story—it’ll include your goals, as well as your mission, vision and values.
• Products, programs and services: This is where you show exactly what it is you’re doing. Highlight the programs and services you offer, and how they will benefit your community.
• Operations: This section describes your team, partnerships and all activities and requirements your day-to-day operations will include.
• Marketing : Your marketing plan will cover your market, market analyses and specific plans for how you will carry out your business plan with the public.
• Finances: This section covers an overview of your financial operations. It will include documents like your financial projections, fundraising plan , grants and more
• Appendix: Any additional useful information will be attached here.

We’ll get into these sections in more detail below!

How to Write a Nonprofit Business Plan in 12 Steps

Feeling ready to put your plan into action? Here’s how to write a business plan for a nonprofit in 12 simple steps!

1. Research the market

Take a look at what’s going on in your corner of the nonprofit sector. After all, you’re not the first organization to write a business plan!

• How your competitors’ business plans are structured
• What your beneficiaries are asking for
• Potential partners you’d like to reach
• Your target donors
• What information granting bodies and loan providers require

All of this information will show you what parts of your business plan should be given extra care. Sending out donor surveys, contacting financial institutions and connecting with your beneficiaries are a few tips to get your research going.

If you’re just getting started out, this can help guide you in naming your nonprofit something relevant, eye-catching and unique!

2. Write to your audience

Your business plan will be available for a whole bunch of people, including:

• Granting bodies
• Loan providers
• Prospective and current board members

Each of these audiences will be coming from different backgrounds, and looking at your business plan for different reasons. If you keep your nonprofit business plan accessible (minimal acronyms and industry jargon), you’ll be more likely to reach everyone.

If you’d like, it’s always possible to create a one page business plan AND a more detailed one. Then, you can provide the one that feels most useful to each audience!

3. Write your mission statement

Your mission statement defines how your organization aims to make a difference in the world. In one sentence, lay out why your nonprofit exists.

Here are a few examples of nonprofit mission statements:

• Watts of Love is a global solar lighting nonprofit bringing people the power to raise themselves out of the darkness of poverty.
• CoachArt creates a transformative arts and athletics community for families impacted by childhood chronic illness.
• The Trevor Project fights to end suicide among lesbian, gay, bisexual, transgender, queer, and questioning young people.

In a single sentence, each of these nonprofits defines exactly what it is their organization is doing, and who their work reaches. Offering this information at a glance is how you immediately hook your readers!

4. Describe your nonprofit 

Now that your mission is laid out, show a little bit more about who you are and how you aim to carry out your mission. Expanding your mission statement to include your vision and values is a great way to kick this off!

Use this section to highlight:

• Your ideal vision for your community 
• The guiding philosophy and values of your organization
• The purpose you were established to achieve

Don’t worry too much about the specifics here—we’ll get into those below! This description is simply meant to demonstrate the heart of your organization.

5. Outline management and organization

When you put together your business plan, you’ll want to describe the structure of your organization in the Operations section.

This will include information like:

• Team members (staff, board of directors , etc.)
• The specific type of nonprofit you’re running

If you’re already established, make a section for how you got started! This includes your origin story, your growth and the impressive nonprofit talent you’ve brought on over the years.

6. Describe programs, products and services

This information will have its own section in your nonprofit business plan—and for good reason!

It gives readers vital information about how you operate, including:

• The specifics of the work you do
• How that work helps your beneficiaries
• The resources that support the work (partnerships, facilities, volunteers, etc!)
• If you have a membership base or a subscription business model

Above all, highlight what needs your nonprofit meets and how it plans to continue meeting those needs. Really get into the details here! Emphasize the work of each and every program, and if you’re already established, note the real impact you’ve made. 

Try including pictures and graphic design elements so people can feel your impact even if they’re simply skimming.

7. Create an Executive Summary

Your Executive Summary will sit right at the top of your business plan—in many ways, it’s the shining star of the document! This section serves as a concise and compelling telling of your nonprofit’s story. If it can capture your readers’ attention, they’re more likely to read through the rest of the plan.

Your Executive Summary should include:

• Your mission, vision and values
• Your goals (and their timelines!)
• Your organization’s history
• Your primary programs, products and services
• Your financing plan
• How you intend on using your funding

This section will summarize the basics of everything else in your plan. While it comes first part of your plan, we suggest writing it last! That way, you’ll already have the information on hand.

You can also edit your Executive Summary depending on your audience. For example, if you’re sending your nonprofit business plan to a loan provider, you can really focus on where the money will be going. If you’re trying to recruit a new board member, you might want to highlight goals and impact, instead.

8. Write a marketing plan

Having a nonprofit marketing plan is essential to making sure your mission reaches people—and that’s especially true for your business plan.

If your nonprofit is already up and running, detail the work you’re currently doing, as well as the specific results you’ve seen so far. If you’re new, you’ll mostly be working with projections—so make sure your data is sound!

No matter what, your Marketing Plan section should market research such as:

• Beneficiary information
• Information on your target audience/donor base
• Information on your competitors
• Names of potential partners

Data is your friend here! Make note of market analyses and tests you’ve run. Be sure to also document any outreach and campaigns you’ve previously done, as well as your outcomes.

Finally, be sure to list all past and future marketing strategies you’re planning for. This can include promotion, advertising, online marketing plans and more.

9. Create a logistics and operations plan

The Operations section of your business plan will take the organizational information you’ve gathered so far and expand the details! Highlight what the day-to-day will look like for your nonprofit, and how your funds and resources will make it possible.

Be sure to make note of:

• The titles and responsibilities of your core team
• The partners and suppliers you work with
• Insurance you will need
• Necessary licenses or certifications you’ll maintain
• The cost of services and programs

This is the what and how of your business plan. Lean into those details, and show exactly how you’ll accomplish those goals you’ve been talking about!

10. Write an Impact Plan

Your Impact Plan is a deep dive into your organization’s goals. It grounds your dreams in reality, which brings both idealists and more practically-minded folks into your corner!

Where your Executive Summary lays out your ambitions on a broader level, this plan:

• Clarifies your goals in detail
• Highlights specific objectives and their timelines
• Breaks down how you will achieve them
• Shows how you will measure your success

Your Impact Plan will have quite a few goals in it, so be sure to emphasize which ones are the most impactful on your cause. After all, social impact is just as important as financial impact!

Speaking of…

11. Outline the Financial Plan

One of the main reasons people want to know how to write a nonprofit business plan is because of how essential it is to receiving funding. Loan providers, donors and granting bodies will want to see your numbers—and that’s where your Financial Plan comes in.

This plan should clearly lay out where your money is coming from and where it will go. If you’re just getting started, check out what similar nonprofits are doing in order to get realistic numbers. Even if you’re starting a nonprofit on a tight budget , every bit of financial information counts!

First, map out your projected (or actual) nonprofit revenue streams , such as:

• Expected membership contributions
• Significant donations
• In-kind support
• Fundraising plan

Then, do the same with your expenses:

• Startup costs
• Typical bills
• Web hosting
• Membership management software
• Subscription
• Costs of programs

If your nonprofit is already up and running, include your past accounting information. Otherwise, keep working with those grounded projections!

To make sure you have all of your information set, include documents like:

• Income statement
• Cash flow statement
• Balance sheet

This information comes together to show that your nonprofit can stay above water financially. Highlighting that you can comfortably cover your operational costs is essential. Plus, building this plan might help your team find funding gaps or opportunities!

12. Include an Appendix

Your appendix is for any extra pieces of useful information for your readers.

This could be documents such as:

• Academic papers about your beneficiaries
• Publications on your nonprofit’s previous success
• Board member bios
• Organizational flow chart
• Your IRS status letter

Make sure your additions contribute to your nonprofit’s story!

Examples of Business Plans for Nonprofits

Here are two great examples of nonprofit business plans. Notice how they’re different depending on the size of the organization!

Nonprofit Recording Co-op Business Plan

This sample nonprofit business plan shows what a basic plan could look like for a hobbyists’ co-op. If your nonprofit is on the smaller, more local side, this is a great reference!

What we like:

• Details on running a basic membership model
• Emphasis on what it means to specifically be a sustainable cooperative
• A list of early milestones, such as hitting their 100th member
• Clarification that all recordings will be legal

Nonprofit Youth Services Business Plan

This sample nonprofit business plan is for a much larger organization. Instead of focusing on the details of a membership model, it gets deeper into programs and services provided.

What we like

• The mission is broken down by values
• A detailed look at what each program provides
• A thorough sales plan
• Key assumptions are included for the financial plan

How to Create a Nonprofit Business Plan With Confidence

We hope this sheds some light on how creating a nonprofit business plan can help your organization moving forward! Remember: you know what you want for your organization. A business plan is simply a tool for making those dreams a reality.

Is a membership program part of your business plan? Check out WildApricot ’s award-winning membership management software!

With our 60-day free trial , you’ll have all the time you need to fall in love with what we have to offer.

Related Organizational Management Articles

30 Free Nonprofit Webinars for June 2024

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The Membership Growth Report:

Benchmarks & insights for growing revenue and constituents.

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Home > Business Plan Templates > 10-Part Nonprofit Business Plan Template (With Examples)

10-Part Nonprofit Business Plan Template (With Examples)

Mar 26, 2024 | Business Plan Templates

Table of Contents

Does a Nonprofit Need a Business Plan?

Yes. A nonprofit needs a business plan just as much as any for-profit enterprise. A business plan for a nonprofit organisation serves several critical purposes: it outlines the mission and vision, sets clear goals and objectives, and details the strategies for achieving them. Additionally, it plays a vital role in securing funding from donors, grants, and other sources by demonstrating the organisation’s potential for impact and sustainability.

A well-crafted business plan helps nonprofits to effectively allocate resources, manage risks, and measure progress towards their goals. It also provides a roadmap for growth and development, ensuring that the organisation remains focused and aligned with its core values and objectives.

In essence, a business plan is indispensable for a nonprofit organisation’s success, guiding its efforts to make a meaningful difference in its community.

So, without further ado, here is our nonprofit business plan template!

1. Executive Summary

The executive summary provides a concise overview of your nonprofit organisation and summarises the main aspects of your plan. Although it comes first in your business plan, you might find it easier to write this part last, ensuring it captures all the important points from the rest of your document.

Introduction

Begin with a brief introduction to your organisation. What is its name? What causes does it support? Whether you’re focusing on environmental conservation, community development, etc., make it compelling and engaging.

Example: The Helping Hands Foundation is a nonprofit organisation committed to uplifting disadvantaged communities through access to quality education, healthcare, and basic amenities.

Organisation Overview

Here, provide a high-level summary of your organisation. Discuss the core activities and why the work is crucial. Include the types of services offered and any significant initiatives.

Example : Our organisation mainly operates in rural areas, where we undertake various community development projects and run a healthcare centre and a school.

Mission and Vision Statement

Write your Nonprofit’s mission and vision statement. This should communicate your organisation’s purpose, its strategic goals, and its commitment to the cause.

Example: Our mission is to empower underprivileged communities by providing education, healthcare services, and resources that foster a sustainable livelihood. Our vision is to create an equitable world where every individual has access to basic human rights and opportunities needed for personal and communal growth.

Geographic Reach and Accessibility

Discuss where your nonprofit operates, explaining where you have the most significant presence or impact and the communities you are serving in those regions.

Example: The Helping Hands Foundation currently extends its services to the marginalised communities in two rural towns in Montana, reaching over 5,000 individuals directly.

Service Type

Explain the kind of work your nonprofit does. Whether you provide direct services, advocacy, research, etc., describe in detail.

Example: We offer direct services, including running a healthcare centre that provides basic medical services and a school that offers quality education from Kindergarten to 5th grade. We also have several livelihood programs that equip adults with skills to earn a living.

Key Goals and Objectives

Outline what you’re striving for in the short and long term. These should be SMART (Specific, Measurable, Achievable, Realistic, and Time-bound) goals.

Example: Our main goal for the coming year is to expand our services into two more towns and to increase our direct beneficiaries by 20%. In the long term, we aim to establish a network of schools and healthcare centres across Montana.

2. Programs and Services

This section provides the reader with a detailed understanding of your organisation’s specific programs and services, their purpose, and their impact.

Program Definition and Theme

Describe the programs or services your organisation offers in detail. Explain the principles guiding these programs and the kind of expertise involved.

Example: We run three main programs: the Community Health Initiative, the Learning Support Program, and the Adult Skill-building Program. Each of these programs follows a participatory model, where community members are active participants, ensuring culturally and contextually relevant interventions.

Service Range

Enumerate the range of services you offer under each program. Highlight key elements and features of these services.

Example: The Community Health Initiative includes services like regular medical check-ups, basic treatments, immunisations, and health awareness workshops. The Learning Support Program offers a comprehensive curriculum, while the Skill-building Program offers vocational classes in various trades.

Beneficiary Analysis

Describe who benefits from your programs or services, detailing how they are chosen and why they are the focus of your efforts.

Example: Our beneficiaries predominantly include underserved individuals and families from the marginalised communities in rural Montana. The selection is made based on household income, with priority given to those below the poverty line. We focus on these groups because we believe that providing them with access to healthcare, quality education, and skill-building can lead to a significant upliftment.

3. History and Governance

This section provides a glimpse into the historical background of your nonprofit and an insight into its governance structure.

Legal Status and Structure

Specify the legal status of your nonprofit. Is it a nonprofit corporation, a public charity, a private foundation, or another type of legal entity? Why was this type chosen?

Example: The Helping Hands Foundation is a Public Charity under section 501(c)(3) of the IRS code. This structure allows us to accept donations, contributions, and gifts that are tax-deductible for donors, which is beneficial in raising funds for our cause.

Board of Directors

Introduce your board of directors briefly, highlighting their experience and roles. Point out their key contributions to the organisation.

Example: Our board comprises five dedicated members, including a physician, an educator, a social worker, a business entrepreneur, and a legal professional, each offering expertise in their respective fields to help guide and govern our organisation.

Key Milestones

Highlight significant milestones in your organisation’s history to show the progress and impact over time.

Example : Founded in 2015, the Helping Hands Foundation started as a health outreach program serving a single community. By 2017, we expanded our services to education, and in 2019 added our Adult Skill-building Program. We’re now serving multiple communities across Montana and have positively impacted over 5,000 lives directly.

4. Business Model

This section will outline how the nonprofit organisation functions and generates revenue to support its mission and programs.

Main Income Sources

Discuss your nonprofit’s main sources of income. These could include individual and corporate donations, grants, fundraising events, service fees, etc.

Example: Our main income sources include individual donations, corporate partnerships, and grants. We also generate revenue through our annual charity run – “Run for Help”.

Planned Collaborations/ Partnerships

Discuss any planned collaborations or partnerships. These could be with other nonprofit organisations, for-profit businesses, government institutions, etc.

Example: We are planning to partner with local businesses for some of our skill-building programs. These businesses will not only provide practical training but also potential job placements for our beneficiaries.

Special Projects

If there are any special projects or initiatives planned that will bring substantial funds or support to the organisation, detail them.

Example: We plan to launch a “Sponsor a Child’s Education” initiative that encourages donors to cover educational expenses for a specific child for a period of one year.

5. Market Analysis

This section provides an understanding of the broader context in which your nonprofit operates, including the current need, target beneficiaries, and competitive landscape.

Current Community Need

Describe the current community need that your nonprofit is addressing. Use data and real examples to illustrate the need.

Example: According to the latest census, the rural parts of Montana that we serve have 35% of the population living below the poverty line. Lack of access to quality healthcare, education, and job opportunities persist as significant challenges.

Beneficiary/ Constituency Analysis

Detail the demographic, geographic, socioeconomic, and other relevant characteristics of the people your organisation serves.

Example: Our primary beneficiaries are families living below the poverty line, struggling with limited access to education, healthcare, and employment opportunities. They present a diverse age group, from children requiring educational support to adults needing vocational training.

Related Organisations and Competitive Analysis

Identify other nonprofit organisations working on similar issues, examine their approach, and highlight what sets your organisation apart.

Example: While other nonprofits in the region primarily focus on either healthcare or education, The Helping Hands Foundation sets itself apart by offering a holistic approach – providing access to healthcare, quality education, and skill-building programs for sustainable livelihoods.

Positioning and Strategy

Explain how your nonprofit is positioned in response to the need, target beneficiaries, and competitive landscape. Describe your strategy to deliver your mission.

Example: Our organisation is positioned as an all-encompassing solution for the challenges faced by our target community. Our strategy involves a holistic, participatory approach that acknowledges and works around the cultural and contextual realities of the community.

6. Public Relations and Fundraising Strategy

This section deals with how you plan to generate awareness about your organisation’s purpose and work, as well as how you plan to solicit donations.

PR Strategy

Outline your strategy to garner visibility and positive coverage in the media and community.

Example: Our PR strategy includes issuing press releases about milestone achievements, hosting town hall meetings to engage community members, and inviting local influencers or media to cover our key events and initiatives.

Fundraising Plan

Describe your approach to raising funds. This may include details of fundraising events, online campaigns, donor recognition strategies, and plans to apply for grants.

Example: We plan to conduct an annual charity run event, “Run for Help”, which is our major fundraiser. We also run online crowdfunding campaigns around specific causes like “Back-to-School” and “Vaccinate a Village”. We acknowledge our generous donors through a ‘wall of fame’ on our website and an annual appreciation dinner.

Community Engagement/ Volunteer Plans

Discuss how you plan to engage community members and volunteers in your work. This can bring additional resources to your organisation through volunteer time and word-of-mouth advertising.

Example: We welcome community members to volunteer in our learning centres, health camps, and other initiatives. We also encourage volunteer involvement in event organisation, fundraising, and spreading the word about our work.

7. Operations

This is where you’ll outline how your nonprofit will function day-to-day, including details about staff recruitment, facility needs, technology, and overall operational flow.

Team Recruitment and Roles

Describe how you plan to staff your nonprofit. This includes the roles you require, criteria for each position, expected number of hires you plan to make per year, and any recruiting strategies.

Example: We plan to hire qualified professionals for roles like Program Managers, Field Coordinators, and Fundraising Coordinators. We also rely on volunteers to help us in various capacities. We actively participate in job fairs and conduct regular recruitment drives to find passionate and committed individuals for our team.

Board Composition and Roles

Discuss the current and expected composition of your board. What roles do they play in your nonprofit, and how often do they meet?

Example: Our board comprises five members, specialising in different areas like healthcare education, legalities, business, and social work. They meet quarterly to review our progress and annual plan. They are instrumental in providing strategic direction to our organisation.

Technology Needs

What kind of technology does your nonprofit require to function seamlessly? This might include software for managing donor data, a website for online presence, project management tools, etc.

Example: We use a donor management software to streamline our fundraising efforts, an accounting software to track our income and expenses, and social media platforms to reach out to our followers and prospective donors.

Facility Needs (If Applicable)

What are your facility needs? Do you need an office space, a storage room, a community centre, etc.?

Example: We currently operate from a rented office space in downtown Montana. Due to the expansion of our programs, we plan to rent additional storage space for our education and healthcare supplies.

8. Marketing and Communications Strategy

This section involves how the nonprofit plans to market its programs and services to its beneficiaries and prospective donors.

Marketing and Outreach

Describe how you plan to increase awareness of your nonprofit in the community you serve, among potential donors, and the public in general.

Example: We plan to conduct regular community awareness programs in schools and public places to educate people about our work. Also, we use digital marketing channels like social media, email newsletter, and our website to increase our visibility among potential donors.

Website and Social Media

Discuss your organisation’s online presence. This may include details about your website, blog, and social media accounts.

Example: Our website provides comprehensive information about our programs, stories of impact, and ways to get involved. We also maintain an active presence on various social media platforms, where we share updates, appeal for donations, and engage with our followers.

Community Engagement

Discuss how you plan to engage with the community beyond the direct provision of services.

Example: We regularly host town hall meetings to engage with community members and gather their feedback. We also participate in local events and festivals to further integrate ourselves into the community culture.

9. Financial Plan

This section focuses on your nonprofit’s financial aspects, detailing how funds will be raised and spent.

Startup Budget/ Current Annual Budget

Lay out the current or expected budget for your organisation, including income and expenses.

Example: Our annual budget for this year is $500,000, with the majority of the funds divided between education and healthcare programs. We allocate 10% for administrative expenses, and the remainder is used for fundraising and marketing.

Proposed Financing

Discuss your proposed financing options. These could include a detailed breakdown of expected revenues from various sources like donations, grants, government funding, special events, etc.

Example: We hope to raise 40% of our funds from individual and corporate donations, 30% from grants, 20% from special events like ‘Run for Help’, and the remainder 10% from government funding and other sources.

Key Financial Assumptions and Justifications

Clarify any assumptions in your financial plan, explaining why these assumptions have been made.

Example: We have assumed a 5% increase in donations from last year as we have seen a steady growth in our donor base. We also anticipate securing a major grant that we’ve applied for based on our past successes with similar applications.

10. Appendices

This section includes any additional documents or supportive material related to your business plan, such as:

Organisational Chart

Include a visual representation of your nonprofit’s structure, showing the roles and departments within the organisation.

Example: Our organisational chart distinguishes between our board members, management team, employees, and volunteers, providing a clear understanding of the functioning of our nonprofit.

Resumes of Key Staff/Volunteers

Attach resumes or brief bios of key team members to provide a sense of their skills, expertise, and experience.

Example: We have included the resume of our Program Manager who holds a master’s in Public Health and has over seven years of experience working in the nonprofit sector.

Detailed Budget

If your financial plan refers to a detailed budget, include a copy here.

Example: A detailed breakdown of our annual budget, including income and expenditure, reflects our judicious allocation of resources.

Related Market Research

Include any market research that validates the need for your nonprofit’s services.

Example: A Local Community Survey report, conducted by us, indicates a significant need for our healthcare and educational services among the local populace.

Wrapping Up Our Nonprofit Business Plan Template

In essence, a business plan helps you articulate and present your nonprofit organisation’s mission, operations, and financial activities with accuracy and persuasiveness. It enables you to highlight your organisation’s unique vision, services, and strategies robustly.

From charting organisational history and governance, presenting market analysis, to detailing your PR and fundraising strategy – a perfect business plan showcases your nonprofit in a compelling light. Remember, it’s crucial to tweak and adjust our guidance to fit your specific context, allowing your unique story, approach, and goals to shine through.

Follow this roadmap, and remember, a well-crafted business plan is more than just a document – it’s an opportunity to bring your organisation’s work to life, foster stakeholder understanding, build support, and ultimately, amplify your nonprofit’s impact.

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Non-Profit Business Plan

A roadmap for the non-profit organization

What is a Non-Profit Business Plan?

A non-profit business plan is simply a roadmap for a non-profit organization , one which outlines the organization’s goals and objectives, and how it plans to attain them. A non-profit is a business entity that is started for any specified purpose other than making a profit. The most common reason for a non-profit organization is charity work.

Even though there are considerable differences between a profit and non-profit company, many of the same regulations apply. In fact, non-profit organizations need detailed and structured planning just like any other business. One of the core tasks of a non-profit startup entails developing a business plan.

This overview explains why non-profits should formulate business plans, and includes the required elements in such a plan.

Uses of a Non-Profit Business Plan

Owners of non-profit organizations need business plans for the following reasons:

• Persuading big donors or foundations to finance their projects
• Hiring board members who can help them in terms of getting a clearer idea of what they are committing themselves to
• Acting as a compass for the whole non-profit organization – to prevent key players from straying or going off the main course
• When applying for business loans , especially if the non-profit has plans to start a store, restaurant, gift shop, or other venture that can help fund its programs

One thing to keep in mind is that the business plan is not rigid. It should be created in such a way that it leaves room for adaptive changes. In this way, non-profit owners can adjust their plans as the organization grows.

Components of a Non-Profit Business Plan

A non-profit organization can use the business plan throughout its life, making changes to it whenever necessary. For a startup non-profit, the business plan can be quite brief as compared to that of a more mature non-profit. The plan may vary depending on the specific organization, however, there are a couple of things that should be included in every non-profit business plan.

1. Executive Summary

The executive summary is a brief breakdown of the contents outlined in the business plan. The trick here is to provide an interesting summary that will keep the reader engaged enough to go through the entire plan. Under this section, the non-profit owner can describe the organization’s mission , a short background of how and why it was started, and its unique strengths. He or she can also outline the non-profit’s products, services, and programs. Additionally, the owner needs to include the organization’s marketing and financial plans.

2. Organizational Structure

Under this section, the owner simply needs to explain how the non-profit is structured, starting from the board of directors and working down to executive staff. He or she should also highlight subsidiaries (if there are any), objectives, strategies on how to scale up, and a few trends in this particular non-profit area.

3. Products, Programs or Services Rendered

The products and services that were listed in the executive summary are now described in a more comprehensive way under this section. The individual should also incorporate unique features such as the delivery methods, sources of products, the benefits of the non-profit’s products and services, as well as future development plans. This section should also provide information relating to any copyrights or patents that the non-profit holds.

4. Marketing Plan

What is the target market or audience of the non-profit’s programs? How does the nonprofit intend to reach these people? What constituencies does the non-profit aim to serve? The marketing plan should provide detailed answers to these questions. For instance, the owner should outline the competitors of his non-profit, as well as other non-profits that may be potential collaborators.

5. Operational Plan

Under this section, the owner will be trying to answer questions such as: How does the nonprofit deliver its products or services? What is the location of its main facility? Does the nonprofit have any equipment or inventory needs? Essentially, the individual should explain the exact strategies he plans to use to maintain the operation. This section also covers the impact of the non-profit’s programs and services on clients and on the community at large.

6. Management and Organizational Team

This part covers the names and details of the staff in the management team. It also includes a list of board members and their respective areas of expertise. The easiest way to explain the non-profit’s management team is through the use of an organizational chart .

The chart outlines all the non-profit’s staff and the roles they play in the organization. Another thing to include in this section is the non-profit’s evaluation of its present and future staffing needs. Once the organization grows, it may need to hire several volunteers, an IT expert, accountants, and more.

7. Capitalization

Capitalization is another element that should not be left out in a non-profit’s business plan. This is the section where the owner lists all the non-profit’s outstanding loans, debts, bonds, and endowments. Endowments refer to government or private grants that the non-profit has received or applied for.

8. Appendix

In the appendix, the owner should incorporate the resumes of key staff, a list of the members of the board of directors, relevant charts and graphs, promotional materials, mission and vision statements, and an annual report if the non-profit is not a startup.

The Bottom Line

Non-profit organizations need to be managed effectively, just like any other enterprise. The best way to achieve this is by developing a business plan. A non-profit business plan serves as a roadmap or compass for the entire organization. Put simply, it outlines the non-profit’s goals and objectives, its organizational structure, marketing, financial, and operational plans, as well as the products or services rendered by the organization.

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following CFI resources will be helpful:

• Business Life Cycle
• Evaluation Plan
• Project Finance
• Startup Valuation Metrics
• See all management & strategy resources
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• Sample Business Plans
• Nonprofit & Community

Nonprofit Business Plan

A nonprofit organization is an excellent way of serving society. If you’re someone wanting to support a cause or make a meaningful impact on society, it’s the way to do it.

Nonprofit organizations do not run for money or profits; they must still be properly managed and organized. A nonprofit business plan can do just that for any organization.

Need help writing a business plan for your nonprofit organization? Creating a business plan can help you fulfill your cause hassle-free and more manageable. So, we have prepared a nonprofit business plan template to help you start writing yours.

Key Takeaways

• Your nonprofit business plan should have an executive summary section summarizing the entire plan and providing an overview of the organization’s mission, goals, and strategies.
• Your organization overview section will cover your organization’s foundational elements like name, type, legal structure, location, and history.
• Prepare a detailed section to describe your programs, products, and services as well as the impact of your offering on society.
• Conduct thorough market research to understand and explain your target market, market size, growth potential, trends, and competitive landscape.
• Prepare an effective operational plan outlining your day-to-day operational process, staffing requirements, quality control, and information about technologies and equipment in use.
• Introduce your management team to your readers as well as the details about the organization structure and compensation plan.
• Prepare accurate financial projections for your nonprofit. Emphasize providing details about revenue streams, fundraising goals, expenses, and financial ratios.

How to Write a Nonprofit Business Plan?

1. executive summary.

An executive summary is the first section of the business plan to provide an overview of the organization’s missions, goals, and key strategies. In addition to highlighting your organization’s unique value proposition, it should provide a snapshot of its operations and impact. Generally, it is written after the entire business plan is ready. Here are some key components to add to your summary:

Organization summary:

Mission statement:, products, programs, and services:, impacts and outcomes:, management team:, financial highlights:, call to action:.

Think of your readers as potential donors and someone who has never heard of your organization. So, keep your executive summary concise and clear, use simple language, and avoid jargon.

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2. Organization Overview

Depending on the organization’s details, you must add various organizational overview elements. Still, every organization should include some foundational elements like its name, purpose, operations, legal structure, location, and history.

Organization Description:

Provide all the basic information about your nonprofit in this section like

• Name & Type of Your Organization: Describe the name and type of your nonprofit organization. For instance, you may operate one of these types of nonprofit organizations:
• Educational organizations
• Charitable organizations
• Healthcare organizations
• Religious organizations
• Location of your nonprofit and why you selected that place.

Mission & Vision:

Organization history:.

If you’re an established nonprofit, you can provide information about your organization’s history, like when it was founded and how it evolved. If you can, add some personality and intriguing details, especially if you got any achievements or recognitions till now for your incredible community services.

Future goals:

It’s crucial to convey your aspirations and your vision. Mention your short-term and long-term goals with the nonprofit; they can be specific targets depending on your ultimate vision.

This section should provide an in-depth understanding of the nonprofit organization. Also, the business overview section should be engaging and precise.

3. Products, Programs, and Services

The products, programs, and services section of a nonprofit business plan should describe specific products, programs, and services that will offer to its beneficiaries. Your nonprofit may or may not have all products, programs, and services to offer.

So, write this section depending on your organization’s offerings:

In a nutshell, your products, programs, and services section should describe how your nonprofit meets needs and positively impacts the community. Use solid examples and numbers to back your claims.

Some additional tips for writing the market analysis section of your business plan:

• Use a variety of sources to gather data, including industry reports, market research studies, and surveys.
• Be specific and provide detailed information wherever possible.
• Include charts and graphs to help illustrate your key points.
• Keep your target audience in mind while writing the business plan

4. Market Analysis

Market analysis provides a clear understanding of the market your nonprofit will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:

Target Market:

Market size and growth potential:, competitive analysis:, market trends:.

• For example, It may be necessary for a nonprofit focused on environmental conservation to adapt its messaging to reflect the growing demand for sustainable products and practices.

Regulatory Environment:

Some additional tips for writing the market analysis section of your nonprofit business plan:

• Use various sources to gather data, including industry reports, market research studies, and surveys.
• Keep your target audience in mind while writing the business plan.

5. Sales And Marketing Strategies

Building awareness, promoting engagement, and generating revenue should be the focus of your business plan’s “Sales and marketing strategies” section. Here are some key elements to include in your sales & marketing plan:

Unique Value Proposition (UVP):

Marketing mix:, marketing channels:, fundraising strategies:.

• Identify fundraising strategies that align with the nonprofit’s mission, vision, and values.

Donor Retention:

In short, a nonprofit business plan’s sales and marketing strategies section should describe how your organization can reach, engage, and retain your target market and generate sustainable revenue.

Be specific, realistic, and data-driven in your approach, and be prepared to adjust your strategies based on feedback and results.

6. Operations Plan

When writing the operations plan section, it’s essential to consider the various aspects of your organization’s processes and procedures involved in operating a nonprofit. Here are the components to include in an operations plan:

Staffing & Training:

Operational process:.

• Your operations must also include details on monitoring and evaluating programs and their impact on the community.

Quality Control:

Facilities and equipment:, technology & information system:.

By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your nonprofit organization.

7. Management Team

The management team section provides an overview of the nonprofit organization’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

• It should include the owners, senior management, other department managers, and people involved in the organizational operations, along with their education and professional background.

Organizational structure:

Compensation plan:.

Overall, the management team section of your business plan should mention key personnel involved in successfully running your organizational operations.

So, highlight your organization’s key personnel and demonstrate why you have the right team to execute your organization’s mission.

8. Financial Plan

When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections and goals for the first few years of your organization.

Revenue Streams:

Fundraising goals:, financial ratios:, risk analysis:.

Remember to be realistic with your financial projections and provide supporting evidence for your estimates.

9. Appendix

Include any additional information supporting your plan’s main content when writing the appendix section. This may include financial statements, market research data, legal documents, and other relevant information.

• Include a table of contents for the appendix section to make it easy for readers to find specific information.
• Include financial statements such as income, balance sheets, and cash flow statements . These should be up-to-date and show your financial projections for at least the first three years of your business.
• Provide market research data, such as statistics on the industry’s size, consumer demographics, and trends in the industry.
• Include any legal documents such as permits, licenses, and contracts.
• Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
• Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your nonprofit organization should only include relevant and essential information supporting your plan’s main content.

Download a sample nonprofit organization business plan

Need help writing a business plan for your nonprofit? Here you go; download our free nonprofit organization business plan pdf to start.

It’s a modern business plan template specifically designed for your nonprofit organization. Use the example business plan as a guide for writing your own.

You may explore our other nonprofit and community business plan examples before you start writing

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So, whether starting a nonprofit organization or planning to grow an existing one, Upmetrics is the tool you need to create a business plan.

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Frequently asked questions, why do you need a nonprofit business plan.

Business plans outline the organization’s goals, strategies, and tactics for achieving its mission. Nonprofit business plans serve as a roadmap for staff, lenders, and other shareholders, helping them make informed decisions, measure progress, and remain focused on the organization’s mission.

How to get funding for your nonprofit business?

Fundraising for a nonprofit can be challenging, but a few strategies and a strategic approach can help you achieve your goal. 

Here are some of the most common ways to get funding for your nonprofit:

• Individual Donations: Individual donations are among key revenue streams for any nonprofit. It includes both one-time payments as well as recurring assistance.
• Grants: Many foundations and government agencies offer grants to nonprofit organizations that meet specific criteria.
• Corporate Sponsorships: A nonprofit can approach corporations that align with its values and mission to gain sponsorships for charity events, programs, or projects.
• Crowdfunding: The process of supporting a business or organization by getting many people to invest in your nonprofit organization, usually online. 

Where to find business plan writers for your nonprofit business?

There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your nonprofit business plan and outline your vision as you have in your mind.

What is the easiest way to write your nonprofit business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any nonprofit business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How do I write a business plan for a nonprofit organization?

Like for-profit business ventures, nonprofits can create a business plan to describe how they will turn their mission into reality.

The business planning process involves the following steps:

• Researching the market, using a resource such as GuideStar , to see who else might be doing what the nonprofit plans to offer
• Investigating the resources the nonprofit will need to provide the service
• Devising marketing and communication strategies
• Assessing risk
• Determining ways to evaluate success - IssueLab Results  is a place for foundations and nonprofits to share funded evaluations and to access the lessons of their peers and colleagues.

You can also use a business plan for a specific project or venture for a nonprofit.

To help diversify their revenue sources, for example, many nonprofits explore ways to earn income by developing their own business ventures. A classic example is Girl Scout cookies. Each year Girl Scout troops sell cookies, and the money they earn goes toward Girl Scout programs. Providing goods or services for a fee can be an important way for a nonprofit to bring in revenue to supplement its fundraising activities.

Selected resources below can help you learn more about creating an overall business plan for a nonprofit organization or specifically for an earned income venture.

Still have questions about starting a nonprofit, finding grants or other fundraising and management queries? Chat with or email Candid's experts to get answers. Ask Us Now!

If you're thinking about starting a nonprofit, take Candid's course, Is Starting a Nonprofit Right for You?  Take the course in person or watch the video.

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Explore resources curated by our staff for this topic:, staff-recommended websites, how to write a nonprofit business plan.

This article provides a brief overview of the steps involved in creating a nonprofit business plan.

Nonprofit Business Plan Development: From Vision, Mission and Values to Implementation

This guide provides an overview of the steps in the planning process, (including SWOT analysis), vision and mission statement development, and goal setting.

Nonprofit Incorporating

This full-text article by Donald A. Griesman goes into detail on the process of starting a nonprofit organization. Beginning on page 10, he describes the elements of a business plan for a new nonprofit.

Nonprofit vs. Traditional Business Plans

Entrepreneur.com offers some information on the differences between a nonprofit and traditional business plan.

Social Enterprise Business Plan

This outline was developed for nonprofit organizations wishing to embark on earned income ventures with a business model.

Business Planning (for nonprofits or for-profits)

This site provides an overview of business planning, with a special section focusing on nonprofits. Includes sample nonprofit business plans.

Free Nonprofit Sample Business Plans

Foundation Center does not endorse the business planning software sold on this site, but the sample nonprofit business plans provided are helpful and quite comprehensive.

Sample Nonprofit Business Plans

Along with a link to its full-text article titled “Business Planning for Nonprofits: What It Is and Why It Matters,” the Bridgespan Group gives links to 3 sample nonprofit business plans.

Business Planning for Nonprofits

Provides a listing of suggested resources on business and strategic planning for nonprofit organizations.

Business Planning Tools for Non-Profit Organizations

Offers advice on strategic plans, business plans & feasibility studies, as well as information on financial options, assessing funding sources. Extensive information on planning volunteer programs as well.

Write Your Business Plan

Though not geared specifically to nonprofits, these resources from the SBA cover in detail the elements that should be included in any kind of business plan.

Staff-recommended books

The Nonprofit Business Plan

Find: Amazon | Free eBook

Business Plans Handbook: Non-Profit

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Nonprofit Business Plans

Co-op nonprofit business plans.

• Nonprofit Recording Co-op Business Plan

Food & Housing Nonprofit Business Plans

• Catering Business Plan
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Growth & Education Nonprofit Business Plans

• Nonprofit Youth Services Business Plan
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Policy & Legal Nonprofit Business Plans

• Government Services Business Plan
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Technology Nonprofit Business Plans

• Energy Conservation Business Plan
• Technology Investment Business Plan

Nonprofit organizations have a unique set of needs and requirements. That’s why these sample business plans for nonprofit organizations and social enterprise businesses can help you get started on the right foot.

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How To Write a Nonprofit Business Plan (2024)

Learn how to write nonprofit business plans with detailed sections and examples. Use this nonprofit business plan template to get it done faster.

While businesses exist primarily to make a profit, nonprofits instead serve the public good for charitable, religious, educational, or other public service reasons. Starting a business as a nonprofit organization is an excellent way to impact positive change for a cause you care about. Plus, nonprofits are exempt from federal and state taxes on any income earned, unlike for-profit corporations. So there are also financial benefits.

If you’re just getting started with your nonprofit idea, one of the first things you’ll want to document is your nonprofit business plan. Below, we’ll take you through your nonprofit business plan, section by section, using this business plan template and guide as a base.

What is a nonprofit business plan?

A nonprofit needs a plan, just like any other business. But there’s a big difference: while most businesses aim to make profits for their owners or shareholders, a nonprofit’s main goal is to make a positive impact on a particular cause or in the community. The nonprofit business plan aims to achieve that mission while keeping the organization running and paying its bills.

Why do you need a nonprofit business plan

At its core, a nonprofit business plan provides a clear mission and vision for the organization. It lays out where the organization is headed and the steps to get there. Some other benefits of a nonprofit business plan include:

• Helping to set priorities and allocate resources to reach the nonprofit’s goals.
• Deciding where funds will come from, be it donors, sponsors, or grant-making institutions.
• Outlining the operational details, from roles and responsibilities to day-to-day activities. 
• Identifying risks and highlighting strategies to mitigate them. 

For a nonprofit to have a lasting impact, it needs to outline strategies for long-term funding and growth. You want to make sure the organization has a clear direction, works efficiently, communicates well with stakeholders, and stays adaptable and sustainable—all of which you can find in a nonprofit business plan. 

How to write a nonprofit business plan

• Create an executive summary
• Write an organization description
• Conduct market analysis
• Outline management and organization
• Describe programs, products, and services
• Document customer segmentation
• Create a marketing plan
• Create a logistics and operations plan
• Write an impact plan
• Outline the financial plan

1. Create an executive summary

The first section of nonprofit business plans is the executive summary . The executive summary should describe your organization and the contents of your nonprofit business plan. This section should be no more than a page, briefly covering the following:

• Concept. What does your nonprofit organization do?
• Goals and vision. What does your nonprofit want to do?
• Product description and differentiation. What do you sell, and why is it different?
• Target market. Who do you sell to and raise money from? Who do you serve?
• Marketing strategy. How do you plan on reaching your audience?
• Current and projected financial state. What do you currently earn through fundraising? What do you foresee earning through fundraising?
• The ask. How much money are you asking for?
• The team. Who’s involved in the organization?
• The document. What can your audience expect from the following sections of your nonprofit business plan? Which highlights should they be excited about? 

2. Write an organization description

The second section of your nonprofit business plan is the description of your organization. While the executive summary sets the stage for the business plan document, the organization description is a summary focused on your organization and what it does and aspires to do. Use this section to identify the industry or niche your organization operates in.

Here, you’ll want to identify the structure of your organization. A nonprofit is a tax-exempt, non-business entity that invests excess funds back into the mission. For nonprofits, you’ll typically register as a 501(c)(3), but you’ll also need to choose your business structure from the following list:

• Unincorporated association. This is the S corporation for nonprofits—you don’t need to file any paperwork. Many nonprofits start out as unincorporated associations.
• Trust. The first structure for nonprofits, this mandates all the organization’s assets be given to charitable use.
• Corporation. This structure offers the most protection from liabilities but also comes with some extra paperwork and fees.
• Limited liability company (LLC) . LLCs offer both tax benefits and limited fees, but not as much protection as a corporation. All members of the LLC must be 501(c)(3) organizations. See our state specific guides for California LLC , Texas LLC and Florida LLC .

The organization description should also include the following elements:

Mission and vision statement

Your mission and vision statement serve as the foundation for why your nonprofit exists, and this “why” influences your decision making. It’s also an effective tool for connecting with your audience and reaching your organization’s full potential.

Outdoor brand Cotopaxi also has a nonprofit arm— the Cotopaxi Foundation . The brand and nonprofit each have their own mission statements, published boldly on the company’s website:

Keep your mission statement on the shorter side (one to two sentences) and use your vision statement to expand on the ideas.

Value proposition

Your value proposition tells people why they should choose to support your nonprofit over other ones. It essentially outlines your unique selling proposition , or competitive advantage for what sets you apart from the competition.

Short- and long-term goals

Your nonprofit business plan should also include measurable short- and long-term goals. Cotopaxi, for example, makes no secret of both its socially driven and business-minded goals through the Cotopaxi Foundation:

You’ll also want to highlight the people behind your organization. This information shows you have enough people to make the nonprofit a success. Nonprofits typically have a few different “teams,” including a board of directors, paid staff, and maybe even volunteers. There may also be key donors who are worth noting here, as well as key people who you plan to help through your organization.

Re:new is a community of refugee artisans and students, volunteers, staff, and board members. It raises money by selling handcrafted products made by refugees from around the world. On its website, Re:new shares information about some of the people behind the organization, including board members, artisans, and paid staff.

For your business plan, outline how those board members are chosen and what their involvement is, salaries and roles for paid staff members, and payment information for the artisans. Remember to note this information in your nonprofit business plan as well.

3. Conduct market analysis

The market analysis section of your nonprofit business plan demonstrates that you’ve done research to determine there is a need for your services and people who will potentially support your mission. Here, you’re essentially determining how big your potential market is.

There are a few key ways to get information about your market:

• Check government census data. Visit official websites such as the US Census Bureau to get the latest statistics. Filter the data to match your nonprofit’s target demographic. For example, if your nonprofit is aiming to help homeless youth, determine how many young people are homeless or at risk in your region.
• Conduct a competitive analysis . Identify similar nonprofits or organizations in your area. Study their services, target audience, and how they communicate their mission, and include your findings in the business plan.
• Research industry trends and trajectory. Subscribe to newsletters, join nonprofit forums, and attend seminars or webinars focused on your sector. Stay updated on the latest trends.
• Make educated guesses based on your experience and research. While hard data is important, there will be times where you have to rely on intuition. Ensure these guesses are always grounded in some form of research or past experience.

Organize a brainstorming session with your team to map out the strengths, weaknesses, opportunities, and threats (SWOT) . Make sure it’s comprehensive and considers both internal and external factors.

4. Outline management and organization

Every organization needs people to run it. When it comes to nonprofits, this typically involves the following groups of people:

• Board of directors. Nonprofits typically have a board of directors or leadership team. Give Merit, for example, might include its leadership team in this section.
• Staff. These people are your paid employees. Include roles, responsibilities, salaries, etc.
• Volunteers. You may or may not have specific people in mind for these volunteer roles. Some nonprofits have different tiers of volunteers—maybe lead volunteers or volunteer coordinators. Make note of these individuals, if relevant.
• Donors/customers. If you have any significant or notable donors who plan to make sizable contributions, include them in this section of your nonprofit business plan.
• Recipients. These are the people who you’re planning to help. This may not always be a person (as is the case with environmentally driven nonprofits, for example). Sometimes this is a group of people and sometimes this is a specific person.

Sometimes these groups overlap. The Empowerment Plan, for example, actually hires the people it helps—one of the organization’s main pillars. 

5. Describe programs, products, and services

Your programs, products, and services section sums up what your organization offers. These offerings include everything for customers, donors, volunteers, and recipients. 

For example, Merit sells products as a brand on its website and then donates the proceeds of its sales to its nonprofit, Give Merit . So Merit would note all of these things in this section of its nonprofit business plan. 

If you operate like Merit, consider diversifying how you generate funds. Selling products and then donating the proceeds is one method. You can also explore direct donations, sponsorship deals, and grants.

6. Document customer segmentation

You can pull from your management and organization section for your customer segmentation, as some of these groups represent your customers as well.

For example, your volunteers are one key customer segment and your donors are another. Within each of these segments, you’ll want to drill down further into smaller segments so you can build targeted campaigns to recruit volunteers and/or donors when needed.

When documenting your customer segments in your nonprofit business plan, add the following information:

• Where they live
• Level of education
• How they spend their free time
• Where they work
• How much they earn
• What technology they use
• Their values, beliefs, and opinions
• Common behavior patterns

7. Create a marketing plan

Your marketing plan outlines how you plan to spread the word about your nonprofit organization. Marketing may include attracting donors, volunteers, and/or customers, depending how your nonprofit operates.

The four main components of this section of your nonprofit business plan are:

• Price. How much do your products cost, and why have you made that decision? If you don’t sell products, you might outline different tiers of donorship.
• Product. What are you selling and how do you differentiate it in the market? Again, if you don’t plan to sell products, outline what you plan to provide to both donors and recipients.
• Promotion. How will you get your cause in front of your ideal customer? How will you connect with recipients?
• Place. Where will you sell your products or share information about your organization? Will this be online, in person, or both? 

8. Create a logistics and operations plan

The logistics and operations section of your nonprofit business plan outlines how you plan to raise money and execute your mission. Add a few key sections:

• Suppliers. This could refer to the suppliers for products you sell, as well as donors who contribute financially. You might also include fundraising organizers. One Tree Planted , for example, allows volunteers to run their own independent fundraisers .
• Production. If you’re selling products to raise money for your nonprofit, this part outlines whether you manufacture yourself, purchase wholesale, or use a dropshipping company.
• Facilities. Where will your organization operate? You might outline where headquarters is, as well as any sites or locations. This may also include storage and warehousing facilities.
• Equipment. List which tools and technology you need for your nonprofit. Remember to include everything from phones and computers to vehicles and machinery.
• Shipping and fulfillment. If you need to ship any packages, determine how you’ll do this. You may ship yourself or work with a third-party fulfillment partner.
• Inventory. Determine how much stock you’ll keep on hand (if any) and where you’ll store it, as well as how you’ll approach inventory management .

9. Write an impact plan

The impact plan is an important part of your nonprofit business plan because it outlines the change you’ll inspire in regards to your mission. 

Many companies with a strong commitment to corporate social responsibility (CSR) publish their own impact plans as well. Though these impact plans aren’t part of a nonprofit business plan, they serve as great reference points for drafting this section of your plan.

Sustainable clothing and shoe brand Allbirds uses its annual sustainability report to show how the company has followed through on its own environmentally conscious CSR initiatives.

For your impact plan:

• Start by clearly stating what you hope to achieve.
• Detail the actions and initiatives you’ll undertake to achieve your objectives.
• Develop indicators for each output, outcome, and impact. 

Before starting your project, determine the current state or level of the issue you’re addressing. For each indicator, establish targets that you aim to achieve by specific timeframes.

10. Outline the financial plan

Every nonprofit organization needs a financial plan. This includes how you’ll collect funds, as well as how those funds will be distributed. The financial plan typically includes the following financial statements :

• Income statement
• Balance sheet
• Cash flow statement

As far as potential sources of funding, you may consider the following for your nonprofit business plan:

• Self-funding. If you have the means, you may support your nonprofit organization financially yourself. You can do this personally or through a business—like how ecommerce brand Merit donates 20% of all purchases to its organization Give Merit , which funds college scholarships for underserved youth.
• Donors. You may seek financial support from organizations, businesses, and individuals. You may also use crowdfunding sites to raise funds and build buzz for your cause.
• Investors. The downside here is that you have to pay the money back, which isn’t ideal for nonprofits in particular.
• Loans . Loans also require repayment. Check with your lender to see if it offers lower interest rates or other benefits to nonprofits. Nonprofits with a Shopify store can leverage simple loans based on sales history, which may be a more hassle-free option. 
• Credit cards. Credit cards typically come with high interest rates and lower limits, so be wary about the terms before you fund your organization this way.

Use this spreadsheet template , which includes everything you’ll need to create an income statement, balance sheet, and cash flow statement, including some sample numbers. You can edit it to reflect projections for your specific organization.

Make a positive change with your nonprofit business plan

Starting a nonprofit organization is an excellent way to make a difference for a cause you’re passionate about. The best way to kickstart your nonprofit organization is with a well-formulated business plan. Your nonprofit business plan will help you secure funding and build excitement for your organization.

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Nonprofit business plan FAQ

What should be in a nonprofit business plan.

• Executive summary
• Organization description
• Market analysis
• Management and organization
• Programs, products, and services
• Customer segmentation
• Marketing plan
• Logistics and operations plan
• Impact plan
• Financial plan

What are the 4 types of nonprofit organizations?

• Unincorporated association
• Corporation
• Limited liability company (LLC)

How do you start a nonprofit with no money?

It doesn’t cost anything to start a nonprofit. You can start a nonprofit with no money by securing donations from external sources. You can raise money to start your nonprofit from businesses, organizations, individuals, and crowdfunding.

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How to Write a Non Profit Business Plan: Step by Step Guide

July 6, 2023

Adam Hoeksema

Does a non profit really need a business plan?  Your organization isn’t a “normal” business after all, you are pursuing a mission, so shouldn’t the business plan just be to pursue the mission of the organization?  

Also, is there really such a thing as a “non profit business plan”?  Non profit organizations are so diverse in their business models.  For example, the financial model for a church based on donations is quite different than a non profit healthcare provider financial model based on provided health care services.  

Since the only common attribute among non profits is that they are pursuing a mission rather than a profit for shareholders, the size, scope and type of a business plan that your non profit might need can vary dramatically.  

In this article I hope to cover the following:

• Why write a business plan for a non-profit?
• What should be included in a non-profit business plan?
• Non-profit business plan outline
• Do non-profits have competitors?
• How to analyze the competition for a non-profit?
• How big is the market for my non-profit?
• How to market a non-profit?
• How to structure a non-profit board?
• How to create financial projections for a non-profit?
• Non-profit business plan example
• Non-profit business plan FAQs

With that in mind as the path forward, let’s dive in. 

Why write a business plan for a non profit? 

Writing a business plan for a non-profit organization has several important benefits and can serve as a key tool in achieving the organization's goals. Here are a few reasons why writing a business plan for a non-profit is essential:

• Clarity and Direction: A business plan helps define the mission, vision, and values of the organization. It provides a clear roadmap outlining the steps to be taken to achieve these goals, and the strategies and tactics to be used.
• Operational Planning: A business plan includes operational details, including organizational structure, staffing needs, resource allocation, and day-to-day operations. This information is essential for the smooth and efficient running of the organization.
• Financial Planning: Non-profits need financial management and planning as much as for-profit businesses. A business plan outlines the financial needs of the organization, budgeting, funding sources, and expenditure, which helps in ensuring financial sustainability.
• Fundraising Tool: A well-structured business plan can be a crucial tool when seeking funding from donors, grantmakers, or sponsors. It demonstrates to potential funders that the organization is well-organized, has a clear mission, and is likely to be successful in its endeavours.
• Performance Measurement: The business plan sets clear objectives, goals, and milestones that enable the organization to measure its progress. This information can be used to make necessary adjustments to strategies or operations to improve performance.
• Stakeholder Communication: A business plan is a formal document that communicates the organization's purpose, strategies, and financial plans to various stakeholders, including staff, volunteers, board members, donors, and beneficiaries.

What should be included in a non profit business plan? 

It is difficult to give you a one size fits all answer for what should be included in a non profit business plan because as we have mentioned every non profit has a different model.  So you really need to customize your business plan to your non profit’s unique situation.  That being said, we did put together an outline of a generic non profit business plan which should at least give you a good head start. 

Non profit business plan outline

1. executive summary.

1.1 Organization Overview

1.2. Objectives

1.3. Mission Statement

2. Organization Description

2.1. Organization History

2.2. Legal Structure

2.3. Unique Value Proposition

2.4. Target Beneficiaries

3. Market Analysis

3.1. industry overview, 3.2. collaborator and competitor identification.

3.3. Target Beneficiaries

Key Point  1

4. marketing and fundraising, 4.1. strategic plan.

4.2. Program or Service Offerings:

4.4. Distribution Channels

4.5. promotions and fundraising, key point  2, 5. organizational structure and management, 5.1. organization’s facility & location, 5.2. staffing plan and volunteer management.

5.3. Governance, Financial Management, and Accountability

Key Point  3

6. financial plan.

6.1. Startup Costs

6.3. Expense Projections

6.4. profit and loss statement, 6.5. cash flow projections, 6.6. break-even analysis, 7. appendix.

7.1. Supporting Documents

7.2. Glossary of Term

7.3. References and Resources

Key Point  5

Do non profits have competitors .

You might be tempted to think that non profit organizations don’t have competition because you are just all out to support the mission.  Although you can certainly work toward the same goal, as an organization you still have competition.  A non profit church may be competing for church members in a sense, a non profit university is competing for students, and a non profit health care system is competing to recruit the best doctors and employees.  

How to analyze the competition for a non profit?

One way to analyze your competition might be to use a tool like Ahrefs.com which allows you to input an organizations website and see roughly how much website traffic they get and what keywords are driving traffic to their website.  My alma mater is Taylor University.  Ahrefs shows that their website receives roughly 25,000 visitors per month from organic search results.  

Furthermore I can do a keyword report and see that they are ranking first for a competitive keyword like “Christian University Indiana” which sends them roughly 34 organic website visitors per month.

How big is the market for my a non profit?

Ahrefs is also a great tool to understand how big the market might be for your particular non profit.  For example, we can see that there are only 350 people searching for “Christian colleges in Indiana” per month, so the total market of people searching for an organization like Taylor University is relatively small.  If you are starting a church you could run a report for keywords like “church in XYZ city” which would help you understand that number of people searching for a church in your area.  

How to market a non profit?

By doing competitor and keyword research for your market on Ahrefs, you should now have a good idea of how your competitors are attracting customers / beneficiaries and you can look for opportunities to compete in that market.  You can then advertise for certain keywords, write content or blog posts related to the keywords that your target market is searching for, and you can try to replicate or improve upon strategies that appear to be working for your competitors. 

How to structure a non profit board?

Structuring a nonprofit board involves considering a number of elements, including board size, member composition, board officer roles, committees, and member terms. Here are some guidelines for how you can structure a nonprofit board:

• Board Size : The size of a board should be dictated by the needs and capacity of the organization. Smaller nonprofits may only need a board of five to seven people, while larger organizations may require 20 or more. As a general rule, a board should be large enough to carry out its duties, but small enough for effective discussions and decision-making.
• Member Composition : The board should consist of individuals who bring a variety of skills and perspectives to the organization. This can include people with financial, legal, and managerial expertise, as well as those with knowledge of the organization's mission and community. It can also be beneficial to include individuals who reflect the demographics of the community the nonprofit serves.
• Board Officer Roles : Nonprofit boards typically have at least three officers: a Chair, a Secretary, and a Treasurer. The Chair presides over meetings and guides the direction of the board. The Secretary is responsible for keeping records of board actions, and the Treasurer oversees the financial management of the organization. Some boards may also have a Vice Chair to support the Chair in their duties.
• Committees : Committees can be useful for handling specific aspects of board governance. Common nonprofit board committees include the Executive Committee (made up of board officers), the Finance Committee, the Governance or Board Development Committee (which handles board recruitment and training), and the Fundraising or Development Committee. There may also be ad hoc committees set up to handle specific projects or initiatives.
• Member Terms : Board members usually serve for specific terms, which can range from one to four years. Some organizations use staggered terms, where a portion of the board is up for re-election each year, to ensure continuity. There may also be term limits, which can help to ensure fresh perspectives on the board.
• Board Member Roles and Responsibilities : It's important to establish clear roles and responsibilities for board members. This can include setting strategic direction, ensuring financial oversight, hiring and evaluating the executive director, fundraising, and acting as ambassadors for the organization.
• Board Meetings : Regular board meetings are crucial for decision-making and governance. The frequency of these meetings will depend on the organization's needs, but many boards meet quarterly. The board may also meet in special sessions as needed.
• Board Evaluation and Training : Regular evaluations can help ensure that the board is functioning effectively and meeting its responsibilities. This can include individual self-assessments as well as full board evaluations. In addition, ongoing board training can help to ensure that members understand their roles and responsibilities.

Remember, each nonprofit organization is unique and may have different needs and requirements when it comes to board structure. It's important to create a structure that works best for your particular organization, in compliance with any applicable local, state, or national laws.

How to Create Financial Projections for a Nonprofit Business Plan

Just like in any industry, the non-profit sector has its own unique factors that impact financial projections, such as fundraising efforts, grant opportunities, and donor contributions. Utilizing a non-profit financial projection template can simplify the process and boost your confidence. Creating precise financial projections goes beyond demonstrating your organization's ability to secure funding; it's about showcasing the financial path that will enable you to achieve your mission and make a positive impact. To develop accurate projections, consider the following key steps:

• Estimate startup costs for your non-profit, including administrative expenses, program development, and marketing efforts.
• Forecast revenue sources such as grants, donations, fundraising events, and membership fees.
• Project program costs
• Estimate operating expenses like office rent, utilities, insurance, and professional services.
• Calculate the amount of funding needed to launch and sustain your non-profit's activities.

While financial projections are vital for your non-profit business plan, remember to seek guidance from experienced professionals who understand the non-profit landscape. Adapt your projections based on real-world insights and leverage industry resources to refine your financial plan, ensuring you can effectively execute your organization's mission and achieve your desired outcomes.

Example Non Profit Business Plan

Below is the content of our sample non profit business plan . A Google Doc version of this nonprofit business plan template is available here for you to modify and personalize. There's also a video walkthrough available to guide you in tailoring the business plan to your specific nonprofit organization's needs.

Table of Contents

1. organization overview.

Briefly introduce the organization's background,  programs, and target market.

      -  Example: Safe Haven is a non-profit organization based in Minneapolis, Minnesota, dedicated to promoting mental health awareness and providing accessible counseling services to underserved communities

   1.2. Objectives

Outlines the organization's short-term and long-term goals.

        - Example:  Increase the number of counseling sessions offered by 25% within the next six months to meet the growing demand for accessible mental health services in underserved communities.

        - Example: Long-term: Establish satellite centers in neighboring cities within three years to expand the reach of Save Haven's mental health programs and services to a wider population.

  1.3. Mission Statement

 Describes the organization's purpose and core values.

        - Example:  Empowering underserved communities by promoting mental health awareness and providing accessible counseling services for all.

   2.1. Organization History

Provides context on the organization's background and founding story.

        - Example: Established in 2010 by Andy Mitchell and a group of passionate professionals and activists, Safe Haven is a mental health organization dedicated to providing accessible counseling services. Through community partnerships and continuous growth, we have made a lasting impact on mental health awareness and support.

   2.2. Legal Structure

 Describes the organization's legal structure (e.g., sole proprietorship, partnership, LLC, corporation).

        - Example: Safe Haven operates as a non-profit organization registered as a 501(c)(3).

 2.3. Unique Value Proposition

  Emphasizes the organization's competitive advantage or unique values.

        - Example: Safe Haven stands out by offering collaborative mental health care, bringing together a multidisciplinary team of professionals who work together to foster holistic well-being and resilience in individuals and communities.

  2.4. Target Beneficiaries

Defines the organization's ideal beneficiary base.

        - Example: Safe Haven aims to serve underserved communities, including individuals from low-income backgrounds, marginalized groups, and those facing barriers to mental health services. 

  Presents a general overview of the industry, its trends, and growth potential.

        - Example: The mental health industry is experiencing significant growth and increased awareness due to a growing recognition of the importance of mental well-being. Safe Haven aims to leverage this trend and contribute to the industry by providing accessible counseling services and promoting mental health awareness in underserved communities.

 Identification of similar non-profit organizations and potential collaborators

        - Example: Direct competitors: Compassionate Minds: A non-profit organization providing mental health services and counseling operating in the same region as Safe Haven.

        - Example: Indirect competitors: Mental Health Foundation: A national non-profit organization focusing on advocacy and awareness, partnering with various stakeholders to promote mental well-being.

3.3. Target Beneficiaries 

Explores the organization's target beneficiaries, demographics, preferences, and pain points.

        - Example: Our programs and services primarily target low-income families and individuals residing in Minneapolis, Minnesota, with a focus on marginalized communities, such as homeless individuals, domestic violence survivors, and immigrant populations.

• Example 1: Localized research findings reveal a significant increase in mental health awareness and a growing demand for accessible and affordable mental health services in the community.
• Example 2: Analysis of demographic data indicates a high prevalence of mental health concerns among underserved populations, highlighting the urgent need for targeted intervention programs.

Describes the action plans, timelines, and key milestones for your organization

Describes the organization's programs or services in detail.

        - Example: Secure sustainable funding through grant applications, fundraising events, and community partnerships 

Key Milestone: Raise a minimum of $100,000 in grant funding within the first year.

        - Example: Develop and implement mental health awareness campaigns in collaboration with local community organizations within the first year of operation, starting from Month 1.

Key Milestone: Launch the first mental health awareness campaign within 6 months.

        - Example: Recruit and train a team of licensed mental health professionals to offer counseling services within the first year of operation, starting from Month 1.

4.2. Program or Service Offerings: 

        - Example: Save Haven offers a comprehensive range of services including individual counseling, group therapy, group therapy, crisis intervention, and support groups.

 Describes the methods through which the organization will deliver its programs or services to beneficiaries.

        - Example: Safe Haven employs a multi-channel distribution approach, utilizing remote counseling, and community partnerships with schools, community centers, and healthcare facilities.

 Details of the organization's promotional efforts and advertising strategies.

        - Example: Safe Haven employs a comprehensive promotional strategy encompassing online presence through its website and social media platforms, active community outreach at events and health fairs, partnerships with local media outlets, and collaborations with healthcare professionals and community organizations to ensure a continuous flow of individuals seeking mental health support.

• Example 1: Safe Haven plans to collaborate with local schools to provide mental health education programs and workshops to students, empowering them with essential skills and knowledge for mental well-being.
• Example 2: The organization aims to establish partnerships with community centers and faith-based organizations to create safe spaces for support groups, fostering a sense of belonging and social connection among individuals facing mental health challenges.
• Example 3: Organize a grand opening event offering free washes and dryer credits, attracting over 200 local residents and generating buzz through word-of-mouth referrals.

 Specify the organization's premises used to carry out its activities, programs, and services. I

        - Example: Save Haven operates from a welcoming and serene facility located in the heart of Minneapolis, Minnesota. The facility comprises modern counseling rooms, a comfortable waiting area, and administrative offices, creating a safe and supportive environment for individuals seeking mental health services.

  Involves the systematic approach of recruiting, coordinating, and supporting volunteers and staff

        - Example: Safe Haven implements a comprehensive staffing plan that includes recruiting, training, and retaining qualified staff members to ensure the effective delivery of programs and services. Additionally, the organization establishes a volunteer management system to engage and support volunteers in their roles, providing them with meaningful opportunities to contribute to the mission.

5.3. Governance, Financial Management, and Accountability:

 Involves the effective and responsible management of financial resources to support the organization's operations 

        - Example: Safe Haven upholds strong policies and procedures to ensure responsible governance, financial management, and accountability, including clear guidelines for board members, transparent financial reporting, and performance evaluations to continually improve its impact and stakeholder satisfaction.

• The team at Safe Haven comprises licensed mental health professionals with extensive experience in trauma-informed care, ensuring high-quality and compassionate support for individuals affected by adverse life experiences.
• Our board members bring diverse backgrounds in psychology, social work, and public health, offering a comprehensive perspective on addressing mental health disparities and promoting holistic well-being.

All of the unique Non-Profit projections you see here were generated using ProjectionHub’s Non-Profit Financial Projection Template . Use PH20BP to enjoy a 20% discount on the template. 

   6.1. Startup Costs

  Provide a detailed breakdown of the total startup costs requirements, and where you plan for those funds to come from. You will also want to break down how the startup costs will be used including working capital to cover losses before the business breaks even.

        - Example: Save Haven's total startup costs are estimated at $150,000. The organization has raised $125,000 through fundraising and donations, and they are seeking an additional $25,000 to cover the remaining expenses.

Watch how to create financial projections for your Non-Profit

6.2. Revenue Projections

Provide an estimate of the organization's future revenue based on market research and assumptions.

        - Example:  Save Haven projects a steady increase in revenue over the next five years, with anticipated amounts of $509,060 in 2023,  in the first year.

 Estimates the organization's future expenses, including fixed and variable costs.

        - Example: Save Haven has estimated its operating expenses, including direct expenses, fundraising costs, sales and marketing expenses, general and administrative costs, research and development expenses, programming costs, salaries, interest and taxes, loan principal, and leasehold improvements.

Summarizes the organization's financial position and expenses, over a specific period.

        - Example: Save Haven anticipates an initial net loss in 2023 due to startup expenses and infrastructure investments. However, the organization projects a positive net income in the following years, demonstrating a consistent and promising financial growth trajectory.

 Outlines the organization's projected cash inflows and outflows.

        - Example: Save Haven's cash flow projections factor in expected fluctuations in cash inflows and outflows, ensuring effective financial management and stability.

  Determines the point at which the organization's revenue equals its expenses.

        - Example: Save Haven's break-even analysis indicates that the organization is expected to reach a point of revenue equaling expenses within a relatively short timeframe, highlighting its potential for early profitability.

Key Point 4

• Example 1: Safe Haven's financial projections align with industry benchmarks, with operating costs accounting for a realistic percentage of total revenue based on similar non-profit mental health organizations.
• Example 2: The organization conducts thorough market research to identify potential revenue streams, such as government grants, corporate partnerships, and individual donations, ensuring a diversified and sustainable funding base.

   7.1. Supporting Documents

 Includes any relevant documentation that supports the information presented in the business plan, such as resumes, financial projections, market research data, and permits or licenses.

   7.2. Glossary of Term

 Provides definitions for industry-specific terms used throughout the business plan to ensure reader comprehension.

   7.3. References and Resources

Lists any sources or resources referenced during the preparation of the business plan, including industry reports, market research data, and relevant publications.

• Example 1: The founders of Safe Haven have personally invested their own resources and time into establishing the organization, demonstrating a strong commitment to its mission and the community it serves.
• Example 2: Safe Haven's leadership team actively participates in mental health advocacy initiatives and professional development opportunities, continuously enhancing their expertise and dedication to improving mental health outcomes.

Nonprofit Business Plan FAQs

How do i start a non-profit organization.

To start a non-profit organization, you'll need to define your mission, create a board of directors, file the necessary paperwork with the government, develop a fundraising strategy, and establish policies and procedures for your organization's operations.

How can I fundraise for my non-profit?

You can fundraise for your non-profit by organizing events, applying for grants, seeking corporate sponsorships, launching online crowdfunding campaigns, cultivating individual donor relationships, and exploring partnerships with other organizations.

What are the key elements of a successful non-profit strategic plan?

A successful non-profit strategic plan should include a clear mission and vision, goals and objectives, an analysis of the target community or cause, strategies for fundraising and program implementation, and a monitoring and evaluation framework.

How can I measure the impact of my non-profit's programs?

To measure the impact of your non-profit's programs, establish specific metrics and evaluation methods, conduct surveys or interviews with beneficiaries, track outcomes and outputs, and use data to inform program improvements and report to stakeholders.

What legal requirements do I need to comply with as a non-profit?

Legal requirements for non-profits may include obtaining tax-exempt status, filing annual reports, adhering to accounting and financial regulations, ensuring transparency in governance, and complying with any specific regulations related to your non-profit's activities.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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How to write a nonprofit business plan

While a nonprofit business plan is similar to that of a for-profit company, it has a few important differences, including the need for a fundraising section.

Ready to start your business?

by   Sandra Beckwith

Sandra Beckwith has been writing for traditional and online publications since she sold her first magazine article wh...

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Updated on: June 20, 2023 · 3 min read

Nonprofit business plan elements

Fundraising section is essential, keep it real.

While nonprofit organizations are purpose-driven rather than profit-driven, they have a great deal in common with their for-profit counterparts.

"We may be governed by a different part of the tax code and exempt from some—but not all—taxes, but we are businesses, too," says Rick Cohen, chief operating officer at the National Council of Nonprofits.

Like other types of businesses, successful nonprofits outline their goals and how they will achieve them in a written document known as a business plan.

A nonprofit's business plan is similar to that used by a for-profit entity but has key differences. Here's what you need to know about how to write a nonprofit business plan.

For-profit business plans detail what a company does, how it does it, who does it, and how it pays for it. A nonprofit business plan outlines that as well but approaches parts of the process differently.

The biggest difference is that nonprofit organizations focus on the problem they want to solve and how to fund programs and activities that help do that.

"Nonprofits have the added burden and opportunity of impact in their business plan," says Sara Gibson, co-founder and CEO of 20 Degrees, a consulting firm serving nonprofits. "The sector doesn't measure worth in profit—it is measured in lives and in change created. That has to be part of the plan."

Typical nonprofit business plans feature many of the following elements:

• Executive summary
• Mission and goals
• Community impact
• Products, services, and programs
• Organizational structure and staffing
• Market and competitive analysis
• Fundraising and development
• Financial plan

For-profit businesses might be funded initially by owners or outside investors, but the ultimate goal is usually self-sufficiency through sales. Many nonprofit organizations aren't structured or created to generate income to support their community services, so fundraising is key.

"It is critical for the sustainability of nonprofits that they are constantly being connected with grants and funders who will provide the financial resources needed for these nonprofits to continue offering quality and valuable assistance to the communities they serve," says Fernando Urbina, director of outreach for ImmigrationHelp.org.

Mikko Sperber, managing partner and founder of Fundamental Strategy, recommends taking on a for-profit business mindset when writing the fundraising section of the nonprofit business plan.

"If you build your plan to have a budget surplus at the end of your year, you then have the capital to reinvest in growing your organization and furthering your mission," he says.

The organization's communication and marketing strategy feeds fundraising goals, so be thoughtful about that piece when writing a nonprofit business plan.

"If no one knows who you are, then no one will be donating to your cause," says Mike McKnight, director of operations at Racing for Orphans with Down Syndrome.

When outlining your business plan, be realistic about fundraising and other revenue streams, then match your budget to your fundraising goal, not the other way around. "In worst-case scenarios, fundraising numbers are plugged into a budget after the programmatic expenses are figured to just offset them without a realistic plan," Sperber says.

Matching your budget to your fundraising goal is especially important because of the organization's impact on the community served, says Cohen, whose organization offers nonprofit business plan resources on its website.

"The worst thing a nonprofit can do is get to a place where people are counting on their services, but then need to close their doors, leaving those people in the lurch," he says.

To ensure your organization's business plan properly supports your mission, consider consulting with professionals such as nonprofit advisers and attorneys specializing in this sector.

Keep your nonprofit business plan handy, too. It's your organizational blueprint, but you'll also need to update it as circumstances or market conditions change.

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7 Organizational Structure Types (With Examples)

Updated: May 29, 2024, 5:39pm

Table of Contents

What is an organizational structure, 4 common types of organizational structures, 3 alternative organizational structures, how to choose the best organizational structure, frequently asked questions (faqs).

Every company needs an organizational structure—whether they realize it or not. The organizational structure is how the company delegates roles, responsibilities, job functions, accountability and decision-making authority. The organizational structure often shows the “chain of command” and how information moves within the company. Having an organizational structure that aligns with your company’s goals and objectives is crucial. This article describes the various types of organizational structures, the benefits of creating one for your business and specific elements that should be included.

Employees want to understand their job responsibilities, whom they report to, what decisions they can and should make and how they interact with other people and teams within the company. An organizational structure creates this framework. Organizational structures can be centralized or decentralized, hierarchical or circular, flat or vertical.

Centralized vs. Decentralized

Many companies use the traditional model of a centralized organizational structure. With centralized leadership, there is a transparent chain of command and each role has well-defined responsibilities.

Conversely, with a decentralized organizational structure, teams have more autonomy to make decisions and there may be cross-collaboration between groups. Decentralized leadership can help companies remain agile and adapt to changing needs.

Hierarchical vs. Circular

A hierarchical organization structure is the pyramid-shaped organization chart many people are used to seeing. There is one role at the top of the pyramid and the chain of command moves down, with each level decreasing in responsibilities and authority.

On the other hand, a circular organization chart looks like concentric circles with company leadership in the center circle. Instead of information flowing down to the next “level,” information flows out to the next ring of management.

Vertical vs. Flat

A vertical organizational chart has a clear chain of command with a small group of leaders at the top—or in the center, in the case of a circular structure—and each subsequent tier has less authority and responsibility. As discussed below, functional, product-based, market-based and geographical organizational structures are vertical structures.

With a flat organization structure, a person may report to more than one person and there may be cross-department responsibilities and decision-making authority. The matrix organizational structure described below is an example of a flat structure.

Benefits of Creating an Organizational Structure

There are many benefits to creating an organizational structure that aligns with the company’s operations, goals and objectives. Clearly disseminating this information to employees:

• Provides accountability
• Clarifies expectations
• Documents criteria for promotion
• Designates decision-making authority
• Creates efficiency
• Fosters collaboration

Essential Elements of Clear Organizational Structure

Regardless of the special type of organizational structure you choose, it should have the following components:

• Chain of command
• Roles and responsibilities
• Scope of control
• Decision-making authority
• Departments or teams within the organization

Functional/Role-Based Structure

A functional—or role-based—structure is one of the most common organizational structures. This structure has centralized leadership and the vertical, hierarchical structure has clearly defined roles, job functions, chains of command and decision-making authority. A functional structure facilitates specialization, scalability and accountability. It also establishes clear expectations and has a well-defined chain of command. However, this structure runs the risk of being too confining and it can impede employee growth. It also has the potential for a lack of cross-department communication and collaboration.

Product- or Market-Based Structure

Along with the functional structure, the product- or market-based structure is hierarchical, vertical and centralized. However, instead of being structured around typical roles and job functions, it is structured around the company’s products or markets. This kind of structure can benefit companies that have several product lines or markets, but it can be challenging to scale. It can also foster inefficiency if product or market teams have similar functions, and without good communication across teams, companies run the risk of incompatibility among various product/market teams.

Geographical Structure

The geographical structure is a good option for companies with a broad geographic footprint in an industry where it is essential to be close to their customers and suppliers. The geographical structure enables the company to create bespoke organizational structures that align with the location’s culture, language and professional systems. From a broad perspective, it appears very similar to the product-based structure above.

Process-Based Structure

Similar to the functional structure, the process-based structure is structured in a way that follows a product’s or service’s life cycle. For instance, the structure can be broken down into R&D, product creation, order fulfillment, billing and customer services. This structure can foster efficiency, teamwork and specialization, but it can also create barriers between the teams if communication isn’t prioritized.

Matrix Structure

With a matrix organizational structure, there are multiple reporting obligations. For instance, a marketing specialist may have reporting obligations within the marketing and product teams. A matrix structure offers flexibility, enables shared resources and fosters collaboration within the company. However, the organizational structure can be complex, so it can cause confusion about accountability and communication, especially among new employees.

Circular Structure

Similar to the functional and product-based structure, a circular structure is also centralized and hierarchical, but instead of responsibility and decision-making authority flowing down vertically, responsibility and decision-making authority flow out from the center. A circular structure can promote communication and collaboration but can also be confusing, especially for new employees, because there is no clear chain of command.

Organic Structure

Unlike vertical structures, this structure facilitates communication between and among all staff. It is the most complex, but it can also be the most productive. Although it can be challenging to know who has ultimate decision-making authority, it can also foster a positive company culture because employees don’t feel like they have “superiors.” This structure can also be more cost-efficient because it reduces the need for middle managers.

There is no one “right” organizational structure. When deciding which structure will work best for your company, consider the following:

• Current roles and teams within the company. How are job functions currently organized? Does it foster communication and productivity? Does it impede or encourage employee growth?
• Your strategic plan. What are your company’s goals for the short-term and long-term?
• Feedback from employees, leadership and other stakeholders. What do those within your company say about how the company is structured? What feedback do you have from other stakeholders, such as customers and suppliers?
• Alignment. What structure will best support your strategic plans and address any feedback received?

What is the most common organizational structure?

A functional organizational structure is one of the most common organizational structures. If you are still determining what kind of structure to use, this organizational structure can be an excellent place to start.

What is the difference between an organizational structure and an organizational chart?

An organizational chart is a graphic that depicts the organizational structure. The chart may include job titles or it can be personalized to include names and photos.

What are the four types of organizational structures?

A functional—or role-based—structure is one of the most common organizational structures. The second type—the product- or market-based structure—is also hierarchical, vertical and centralized. Similar to these is the third structure—the process-based structure—which is structured in a way that follows a product’s or service’s life cycle. Lastly, the geographical structure is suitable for businesses with a broad geographic footprint.

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Christine is a non-practicing attorney, freelance writer, and author. She has written legal and marketing content and communications for a wide range of law firms for more than 15 years. She has also written extensively on parenting and current events for the website Scary Mommy. She earned her J.D. and B.A. from University of Wisconsin–Madison, and she lives in the Chicago area with her family.

An Open-Source Nonprofit’s Growth and Executive Pay Raise Eyebrows

The linux foundation has become a giant among the nonprofits overseeing open-source projects, leading some critics to say it’s losing touch with the movement’s egalitarian roots..

Open-source software has become a big business, even for some of the nonprofit organizations dedicated to coordinating the far-flung communities of programmers that contribute to open-source projects, usually without pay. That’s especially true of the Linux Foundation.

That organization, which oversees the development of the Linux operating system,  has seen its revenue soar over the 17 years since it formed, as it has grown to encompass hundreds of other open-source software projects, like Kubernetes, a popular technology for building cloud applications. The Linux Foundation’s revenue was $177 million in 2022—the most recent year for which its tax filings are available—up from $7.5 million in 2007. That makes it the largest open-source nonprofit, by revenue, in the world.

And as the Linux Foundation has grown, so has compensation for its top executives, who are paid handsomely even compared with executives at similar-size nonprofits in technology. In 2022, the median annual compensation for the dozen or so top executives named in the organization’s tax filings was roughly $705,000, 52% higher than it was four years prior. By contrast, the Wikimedia Foundation—which oversees Wikipedia, a free online encyclopedia written and edited by volunteer contributors—reported 2022 revenue of about $168 million and had median executive compensation of roughly $376,000.