How to Create a Nonprofit Business Plan
Could your organization use a nonprofit business plan? The answer is yes. Although the nonprofit sector doesn’t always work like the for-profit world and you might not think of your nonprofit as a business, having a business plan can boost your growth and support.
The most important thing to remember is that your nonprofit needs to be unique so it stands out from other nonprofits. Secondly, you want to convey the value that those who engage with your organization or donate money will receive. This can be making them feel charitable but also more productive and engaged. Think about the value/emotion you are hoping to evoke and convey it through your business plan.
The following sections should be included in your nonprofit business plan:
- Executive Summary
- Organization Overview
- Products, Programs, and Services
- Industry Analysis
- Customer Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
- Appendix
Let’s break each of these down.
Executive Summary
Start your nonprofit business plan by clearly stating your organization’s mission and describing how it plans on reaching its goals. Include a concise description of what makes your organization stand out among competitors (e.g., “We are the only non-profit animal welfare organization in XYZ county” or “Our college student volunteers provide assistance at less than half the cost as our competitors”). Succinctly communicate why people should care about your organization so they will choose to support you. Include other pertinent information about your organization such as the bios of key staff members and the amount of funding you are looking to raise.
The purpose of the executive summary is to convey key information about your organization so readers can decide whether they are interested and willing to read the rest of your plan. Keep the executive summary to one to two pages in length. Create it after completing the other sections so you can simply summarize them. But make sure you do so in an exciting and compelling manner, so readers want to read and learn more about your organization.
Organization Overview
This section should include a description of your organization’s overall structure, beginning with who founded it and how it is currently governed. Other important information to provide includes your the nonprofit is located, how many paid/unpaid staff members there are, what facilities are available for use by customers or employees, and what kind of support services are provided (e.g., IT, HR). Lastly, explain any accomplishments your organization has achieved to-date, as the best indicator of future success is past performance.
Products/Services/Programs
In this section, write about your nonprofit’s services or programs in detail. Document the programs you offer and how they function. Provide details, sketches, etc. to clearly communicate the offerings and value your organization provides. If applicable, consider including audience testimonials that express satisfaction with your nonprofit’s offerings.
Industry Analysis
For industry analysis, address some questions and provide information that supports your answers. Consider this: how big is the industry? For example, if you provide education to high school students, discuss the market size for public and private high school education.
Also answer the following questions:
- What trends are facing the industry (positive or negative)?
- What are some of the industry challenges facing organizations?
- How can your organization help people overcome those problems?
Customer Analysis
This section should begin with a definition of who the organization considers to be its primary target market (e.g., high school students, working moms, etc.). Based on this group’s needs and wants, prioritize which benefits/offerings from your services or programs are most important to them. This section should also include facts about your supporters’ key needs and pains or other information that might be helpful for your nonprofit’s fundraising efforts.
Marketing Plan
The marketing plan should discuss how the individuals you serve are likely to find out about your organization’s services and programs along with what promotional activities will be used to reach new audiences. Outline why each activity is beneficial for growing your nonprofit and which demographic it best targets. For strategies that have already been used, provide specific figures on results achieved.
Below are sample promotional activities that many nonprofit organizations use:
Public relations
Developing relationships with the media and utilizing earned media coverage helps with free public exposure. This in turn gets the word out about an organization’s mission. For example, you can create press releases related to new staff additions or upcoming events and share them with your media contacts.
Social media marketing
Social media sites allow organizations to stay connected with supporters and advocates at any time of day. There are different social media platforms that work for different organizations. For example, Twitter is a great way to have quick conversations with people about an issue. Facebook is a good place for sharing more in-depth content and articles on a particular subject area. LinkedIn is a platform where you can build your network of contacts and share information about your organization or topic area.
Blogs and Other Content
Producing great content for blogs or other channels can be an extremely effective way to bring people back to your site or area of social media where they are more likely to donate. A blog can allow you to have conversations with supporters and advocates, answer questions, give more information about your organization or cause, and talk about the issues in your community. In addition, the use of photos, videos, infographics, etc., is a great way to get information across in a compelling manner.
E-newsletters
Sending out an e-newsletter is a great way to engage your supporters. You can include links back to your website, send updates about your organization, share compelling videos or photos from recent events, etc. Just make sure your audience has opted in to hear from you and be sure you don’t spam their inboxes with constant updates every day.
Event marketing
Organizing special events around a particular subject area is a good way to inform the public about an issue or about your organization. Some examples of events are panel discussions about a subject, fundraising dinners, etc. Webinars have grown in popularity with nonprofits in recent years as well. With so many options for virtual, hybrid or in-person gatherings, you’ll be sure to find a way to boost your nonprofit’s audience and growth.
Newspaper/Magazine ads
Just because digital marketing has grown doesn’t mean that traditional media isn’t viable. Unfortunately, this can be one component of advertising that nonprofits often neglect due to lack of funds. Adding an ad to the back of a newspaper with some basic information about what you do, how people can get involved, and what you are looking for in terms of volunteers, donors, etc., is still a great way to spread the word.
PPC advertising
Don’t forget about pay-per-click advertising on search engines like Google. This makes it possible to drive traffic to your website based on specific keywords your target audience searches or pages they visit online. You can write compelling ads that allow you to get the word out about what your organization does.
Operations Plan
This section should describe in detail how your nonprofit runs or plans to run its business day-to-day. Outline internal systems that will be used to track and monitor each product, service, or program offered by the organization (e.g., accounting software). Describe what kind of training employees may need to perform their duties effectively. Also include information about whether future hiring plans are scheduled. If so, mention whether all positions will need to be filled immediately or if some can be temporarily contracted out until permanent staff is hired. Finally, create a chart showing the milestones your organization hopes to achieve annually over the next five years.
Management Team
Provide a list of important management team members within your organization. Make sure to include each person’s title, how long they have been working there, and what responsibilities are part of their role. For each person, include any previous experience they have as well as personal traits that would help them succeed in it. If there are no existing employees with enough business expertise to serve certain roles, list the qualifications the ideal candidate would possess instead.
Financial Plan
In this section of your business plan, provide a detailed breakdown of how much funding you are seeking broken down by category (e.g., marketing, staffing, etc.). Provide information about how much revenue is expected from donors and customers compared to funds needed to cover operating costs such as salaries, advertising, and rent. If the organization already has an existing revenue stream, explain how new funding will be used to fund new operations.
Appendix
The appendix is a good place for any additional information that you would like readers of your nonprofit business plan to have. This includes additional industry research and information on your products, services, or programs. It might also include testimonials from satisfied customers or profiles of board members. Or, it might include architectural designs of a new facility you hope to build.
In summary, a nonprofit business plan is a document that outlines your nonprofit organization’s goals and objectives. A well-written, comprehensive plan can help you attract funding from potential donors or investors. It will also provide clarity to stakeholders by giving them an understanding of your vision for the organization’s future growth.
*This spotlighted blog post is courtesy of Growthink
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