How to write a business plan for a nonprofit

Writing nonprofit business plans involves a professional approach customized to the unique nature of nonprofit organizations. Nonprofit organizations prioritize social impact over financial profit, distinguishing them from for-profit companies.

Nonprofit organizations aim to support neighborhoods and tackle societal problems with programs and services. As a result, their business strategies often prioritize mission, vision, and values to a greater extent.

Grants, contributions, and collaborations provide non-profit organizations with funding, which is reflected in the design of their business plans. Free templates can streamline the procedure by offering an organized structure to adhere to and enabling customization to meet the unique requirements and objectives of the company.

What is Business plan for nonprofit

A business plan for nonprofit is a strategic document stating your business’s mission, goals, and objectives. It will help one to lead and work with the non-profit toward its impact and sustainability. A thoroughly written business plan clearly outlines your organization’s goals and how it intends to accomplish them. This helps in drawing in volunteers, donors, and other stakeholders.

The business plan for a nonprofit is crucial because it provides a framework within which resources and decisions can be allocated. It supports the objective of a nonprofit by putting together all the financial, marketing, and operational tactics formulated for running an organization.

A comprehensive business plan would ensure that resources were thoughtfully spent and equally distributed. A new charity organization whose mission is to bring awareness to underprivileged areas could use a business plan to outline its fundraising strategies, recruit volunteers, and measure progress over time.

How to write a nonprofit business plan in 13 simple steps

Creating a business plan for a nonprofit organization is a step-by-step process that clarifies your mission and the reachability of your objectives.  You can stick to working with any sample using a free template, or customize your plan according to the needs and requirements of the mission. These steps are crucial to creating a strategic roadmap for success.

A nonprofit business plan will help you score funding, attract volunteers, and significantly impact your community. With careful consideration and open communication, the following 13 steps will assist in effectively communicating an organization’s goals, purpose, and objectives. 

1. Conduct market research and Analysis 

Creating a successful nonprofit organization requires a thorough understanding of the requirements and expectations of your target market. Improve the success of your business plan by gathering valuable insights from in-depth research on your competitors, potential partners, and intended donors. Seeking feedback from beneficiaries and engaging with granting bodies and loan providers will ensure your organization is well-prepared to meet the market demands. 

2. Choose the right writing style for the target audience

A wide range of stakeholders, including donors, volunteers, board members, loan providers, and granting organizations, should be catered to in your nonprofit business plan. Each stakeholder looks at your proposal with different needs and goals. Avoid industry jargon and acronyms to ensure accessibility.

Consider writing a longer, more detailed business plan and a condensed, one-page version to ensure that every audience gets the most important information. This strategy ensures that everyone, from all backgrounds, can comprehend and relate to your purpose easily. It will improve your capacity to attract support and propel your nonprofit’s development. 

3. Describe your non-profit organization 

Express your organization’s identity, mission, and strategy for goal-achieving in detail to create a captivating description for your nonprofit. Start by crafting a concise mission statement that defines your nonprofit’s purpose. Expand this with a vision statement that outlines your ideal community. Emphasize fundamental principles such as empathy, moral rectitude, and diversity. Decide if your organization is an LLC, company, trust, or unincorporated organization. Clearly explain your nonprofit’s unique approach or services to differentiate it from competitors.

Outline short-term goals, detailing team roles including board members (strategic oversight), staff (daily operations), volunteers (support), and key donors (financial support). Understand beneficiary needs through direct communication and surveys. Identify potential partners to enhance reach and resources.

Conduct market research using census data and competitive analysis to understand the problem scope and market gaps. Ensure the business plan meets grant and loan requirements, and use research to choose a unique, eye-catching nonprofit name. This strategy will communicate your mission, vision, and approach to stakeholders, donors, and partners.

4. Describe your vision and mission statement 

The cornerstones of any business are its mission and vision statements. They outline your goals and provide the framework for your decisions. A well-written mission statement simplifies the aims and ambitions of your company into one brief sentence.

In contrast, your vision statement describes the future you hope to build. These statements connect with your audience and articulate your nonprofit’s full potential, inspiring support and engagement.

5. Describe the management and organizational Structure

The operations section provides a detailed description of the organization’s structure. Start by outlining the roles and responsibilities of each team member, including;

• Board of Directors: Leadership team and their roles.
• Staff: Paid employees, roles, and salaries.
• Volunteers: Different tiers and specific roles.
• Donors/Customers: Notable contributors and supporters.
• Recipients: Individuals or groups benefiting from your services.

Specify the nonprofit type you are running and its location. If you are already established, share your origin story, growth, and impressive talent attracted over the years, while highlighting notable donors and recipients of your services. This comprehensive approach ensures clarity and showcases the strength and organization of your nonprofit.

6. Define the programs, products, and services

The programs, products, and services part describes what your organization offers and how it benefits your beneficiaries. Outline your specific work, how it supports your mission, and the resources that make it possible, such as partnerships, facilities, and volunteers.

Highlight any membership bases or subscription models if applicable. Emphasize the needs your nonprofit meets and your plans to continue meeting those needs. If you are established, showcase your impact, using pictures and graphics to make the information engaging. Consider diversifying your funding methods, like selling products and donating proceeds, securing direct donations, sponsorships, and grants. This comprehensive approach ensures readers understand the breadth and impact of your offerings.

7. Outline your market segmentation 

The two most important segments in your nonprofit business plan are donors and volunteers, each has smaller segments you can target more precisely. Provide information such as where they live, their age range, education level, and how they spend their free time.

Note where they work, their income, the technology they use, and their values, beliefs, and opinions. Include common behavior patterns. You can develop focused campaigns to attract and involve each group. This ensures your nonprofit’s message resonates with the right audience.

8. Create a marketing plan

A marketing plan ensures your nonprofit’s mission reaches the right audience. If your nonprofit is already operational, detail your current activities and the specific results achieved so far. If you are new, focus on projections based on solid data.

Your marketing strategy should incorporate thorough market research, including information on beneficiaries, target audience or donor base, competitor analysis, and potential partner names. Highlight any market analyses and tests you have conducted and document previous outreach and campaign outcomes.

Include your past and future marketing strategies. Cover promotion, advertising, and online marketing. Focus on four main components which are;

• Price: Outline your product pricing or donor tiers.
• Product: Detail what you offer and how it stands out.
• Promotion: Describe how you will reach your ideal audience.
• Place: Specify where you will sell products or share information, whether online, in person, or both.

These elements will develop a successful marketing strategy that attracts donors, volunteers, and supporters for your nonprofit.

9. Make a logistics and operations plan

Creating a logistics and operations plan for your nonprofit involves detailing how you’ll raise funds and execute your mission daily. Start by outlining your suppliers, which include product suppliers, financial donors, and fundraising organizers. Next, detail your production methods, whether manufacturing, purchasing wholesale, or using drop shipping. Specify your operational facilities, such as headquarters, storage, and warehousing.

List essential equipment, from phones and computers to vehicles and machinery. Plan your shipping and fulfillment strategy, deciding between self-shipping or third-party partners. Outline your inventory management approach, including stock levels and storage solutions.

Take note of the following;

• Team Roles and Responsibilities: Define the titles and duties of your core team members.
• Partners and Suppliers: List the partners and suppliers critical to your operations.
• Insurance and Licenses: Identify necessary insurance policies and any licenses or certifications required.
• Cost of Services and Programs: Detail the expenses associated with your services and programs.
• Day-to-Day Operations: Describe the daily operations and how funds and resources will support your mission.

By focusing on these areas, you create a clear and actionable logistics and operations plan that shows how your nonprofit will function efficiently and achieve its goals.

10. Write your impact plan

Your Impact Plan is a comprehensive strategy that outlines your nonprofit’s objectives, ensuring they are grounded in reality and appealing to both idealists and pragmatists. Start by clearly stating what you hope to achieve with your mission.

Detail the specific actions and initiatives you will undertake to reach these objectives and establish indicators for each output, outcome, and impact. Before starting, assess the current state of the issue you are addressing and set targets for each indicator with specific timeframes. The below elements will help guide your progress and ensure you stay focused on achieving your goals.

• Clear Goals: Define what you aim to achieve.
• Specific Objectives: Highlight the most impactful objectives and their timelines.
• Detailed Actions: Outline the initiatives and steps you’ll take.
• Success Metrics: Show how you will measure success.
• Current State Assessment: Determine the baseline and set targets.

The Impact Plan will effectively showcase your nonprofit’s commitment to achieving its mission through implementing these key elements.

11. Outline the financial plan

Your nonprofit must create a financial plan. Outline your anticipated revenue streams first to ensure sustainability and secure funding. These may include grants, in-kind support, membership dues, and sizable donations. Ensure you plan your fundraising activities. List anticipated expenses like startup costs, salaries, insurance, bills, web hosting, membership management software, and program management costs. If your nonprofit is already operating, provide past accounting information. If not, use realistic projections based on similar organizations.

Gather crucial financial documents like balance sheets, cash flow statements, and income statements for transparency and accountability. Consider funding sources like donations, self-funding, credit cards, and loans. Carefully weigh the terms and ramifications of each choice. 

A well-structured financial plan demonstrates your nonprofit’s ability to cover operational costs and maintain financial stability for donors, loan providers, and granting bodies. This plan not only aids in securing funds but also helps your team identify funding gaps and opportunities. Use spreadsheet templates to customize these financial statements for your organization, ensuring accuracy and thoroughness.

12. Write your Appendix

The appendix of your nonprofit business plan is a treasure trove of additional information that enriches your story. Include academic papers about your beneficiaries, publications highlighting your past successes, and detailed bios of your board members. Add an organizational flow chart to illustrate your structure and your IRS status letter to confirm your tax-exempt status. Each document should enhance the reader’s understanding and appreciation of your nonprofit’s impact and potential. By thoughtfully curating these extras, you paint a fuller, more compelling picture of your organization.

13: Write the Executive Summary

The executive summary is the shining star of your nonprofit business plan, sitting at the top and wrapping up your entire document. This part should capture your reader’s attention and motivate them to read further. Begin with your mission, vision, and values, followed by your goals and timelines. Include your organization’s brief history and describe your primary programs, products, and services.

Outline your financing plan and explain how you intend to use the funding. This section should be tailored to the specific audience, with loan providers emphasizing financial plans, and potential board members focusing on goals and impact.

One page should be the maximum length for an executive summary. It should include your business’s work, objectives and vision, products and what makes them unique, target market, and marketing plan.

Describe your team, include your fundraising request, and discuss your present and future financial situation. Highlight the most interesting parts of the paper and provide a concise synopsis of what the readers may expect from the remainder of it. This strategy ensures an engaging and informative executive summary, setting the foundation for your business plan.

Why you need a business plan for a nonprofit organization

A business plan is essential for a nonprofit organization as it gives a detailed guide for accomplishing your goals. It defines your objectives, tactics, and actions required to achieve them. This degree of planning ensures that all individuals, including staff, volunteers, and board members, comprehend the organization’s direction and purpose.

A properly designed business plan helps recognize possible challenges and opportunities, allowing for proactive handling of these matters. Establishing tangible goals and detailing precise steps assists your nonprofit in remaining concentrated and effective in generating social change.

Securing funding and support requires a business plan. Granting bodies, donors, and loan providers require a thorough plan showcasing the viability and sustainability of your nonprofit organization.

A business plan demonstrates your clear vision, realistic strategy, and understanding of your financial needs and projections. Developing credibility and trust helps draw the necessary resources and partnerships required for the successful growth of your nonprofit organization. A business plan plays a part in your nonprofit organization’s growth, influence, and future achievements.

To help in setting goals and milestones

A business plan is essential for a nonprofit organization primarily because it helps set clear goals and milestones. A business plan gives the activities of your nonprofit an organized framework by defining specific goals and the steps required to reach them. It simplifies dividing a mission into manageable tasks and timelines, facilitating progress tracking and measuring success.

Setting goals and milestones helps your organization stay focused and accountable, and allows for continuous monitoring of achievements and necessary adjustments. This strategic planning is crucial if you want to grow your nonprofit and ensure you have a big impact on your community.

To assist in securing grants and funding

A business plan is vital for securing grants and funding for a nonprofit organization. A thorough and well-considered plan that demonstrates your nonprofit’s sustainability and viability is what lenders, grant organizations, and donors all look for. A

business plan is evidence of your clearly defined mission, realistic goals, and well-thought-out plan for achieving them. Building credibility and trust with potential funders involves providing financial estimates, detailing financing requirements, and outlining the plan for the funds. 

A business plan effectively communicates an organization’s structure, impact, and growth plans. It ensures funders’ investments are effectively used and contributes to significant social change. This detailed document is essential for drawing in the funds and assistance required for growth.

To aid in marketing your mission

A business plan promotes your nonprofit’s mission outlining your objectives, purpose, and strategies to potential supporters. It assists in identifying your target demographic, be it donors, volunteers, or recipients, and customizes your message to connect with them.

The business plan describes what makes your organization special and why people should support your cause. It also outlines your marketing tactics, such as promotion, advertising, and online engagement, to ensure you effectively target the right audience. A business plan enhances your nonprofit’s impact and authority by providing a compelling narrative about its achievements and future goals.

To help attract volunteers and partners

An effective business plan can attract volunteers and partners by clearly defining your nonprofit’s mission, objectives, and the beneficial outcomes you seek to create. It gives comprehensive details on the structure, activities, and opportunities for volunteers and partners within your organization.

By presenting your strategic plan, you show your dedication to well-structured, efficient activities, which can attract individuals interested in contributing their time or resources. The business plan showcases successful outcomes and future objectives, presenting an inspiring vision to engage volunteers and partners. A nonprofit organization with clear goals, specific responsibilities, and a successful history will attract potential collaborators to collaborate and make a positive impact.

For assistance in research and securing opportunities

A business plan investigates and captures opportunities by offering a detailed structure for recognizing and chasing new projects. It details your company’s mission, goals, and strategic priorities, guiding research toward objective alignment.

The business plan consists of market analysis, competitor details, and potential partnership prospects, allowing you to remain up-to-date on industry trends and identify areas for growth. It simplifies the identification process and helps obtain grants, sponsorships, and other funding sources by outlining the required funds and sources. A well-structured business plan enables your nonprofit to explore new opportunities, fostering growth and enhancing its influence.

Is a nonprofit business plan similar to a profit business plan?

No, nonprofit business plan writing is not similar to for-profit business plans in some sections. The different types of business plans follow specific steps of business plan writing. A nonprofit business plan differs from a for-profit plan’s structure and goal. A for-profit approach prioritizes the goals, values, programs, services beneficiaries’ needs, profit margins, and revenue growth. It also has sections on resource allocation and fundraising tactics.

A for-profit company plan includes comprehensive financial predictions, sales tactics, and marketing plans, emphasizing profitability, market share, and competitive advantage. It describes the roles, duties, and organizational structure to promote efficiency and growth. Nonprofits use market research to understand community needs and impact. The structure and content differ for each organization.

Are there nonprofit business plan writers?

Yes, there are nonprofit business plan writers who specialize in creating tailored plans for nonprofit organizations. These professionals, commonly known as consultants, strongly grasp non-profit organization’s specific requirements and objectives. Their services include creating mission statements, strategic goal outlines, fundraising strategies, and program descriptions as part of business plan writing. These consultants are experts at emphasizing the social influence of a nonprofit, guaranteeing the strategy connects with donors, grantmakers, and other parties involved. Nonprofit organizations can develop thorough and persuasive business plans by utilizing their knowledge to effectively convey their vision and strategies for accomplishing their mission.

Nonprofit business plan template on one page

Creating a short and effective business plan is necessary for any nonprofit organization. A one-page business plan helps to communicate your mission, goals, strategies, and financial needs in a simplified format that is easy for stakeholders to understand. It serves as a quick reference guide highlighting the most important aspects of your organization, making it easier to attract donors, volunteers, and partners. The following is an example of a one-page nonprofit business plan template:

Nonprofit Business Plan Template (One Page)

Organization Name: (Your Nonprofit Organization Name)

Mission Statement: (Briefly state the mission of your nonprofit, describing its purpose and what you aim to achieve.)

Vision Statement: (Describe the long-term vision for your organization as well as the impact you wish to make.)

Objectives:

• (State Objective 1)
• (State Objective 2)
• (State Objective 3)

Programs and Services: (List the key programs and services your nonprofit will offer to achieve its mission.)

Target Audience: (Identify the primary beneficiaries of your nonprofit’s work, including demographics and specific needs.)

Market Analysis:

• Need for Services: (Explain the need for your nonprofit’s services within the community.)
• Competitive Landscape: (Describe other organizations providing similar services and how your nonprofit stands out.)

Strategy and Implementation:

• Key Strategies: (Outline the strategies you will use to achieve your objectives.)
• Action Plan: (Detail the steps you will take to implement these strategies.)

Management Team: (List the key members of your team, their roles, and their relevant experience.)

Financial Plan:

• Funding Needs: (Be specific on your funding requirements and how the funds will be used.)
• Revenue Streams: (Describe your main sources of income (donations, grants, fundraising events, etc.).)
• Budget Summary: (Give a brief overview of your budget, including key expenses and projected revenue.)

Evaluation and Impact: (Discuss how you will measure the success and impact of your programs and services.)