What is a Non-Profit Business Plan?
A non-profit business plan is simply a roadmap of the non-profit organization, which outlines the goals and objectives of how it can achieve its targets. A non-profit is a company that is started for any other 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 include the required elements in such a plan.
Uses of a Non-Profit Business Plan
Owners of non-profit organizations need business plans for:
- Persuading big donors or foundations to finance their projects
- Hiring board members so that they get an idea of what they are committing themselves to
- Acting as a compass for the whole non-profit business; 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 changes. In such a way, non-profit owners can adjust clauses as the organization grows.
Components of a Non-Profit Business Plan
The 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 compared to that for a mature non-profit. As such, the plan may vary depending on the specific type of 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, which 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 it started, and its unique strengths. He or she can also outline the non-profit’s products, services, and programs. Additionally, the owner needs not forget 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 to the staff. He or she should also highlight subsidiaries (if there are any), its objectives, strategies on how to scale up, and a few trends in that 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 comprehensive way under this section. The individual should also incorporate unique features like 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 copyrights and patents owned by the non-profit.
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 serve? The marketing plan should provide detailed answers to the questions. For instance, the owner should outline the competitors of his non-profit or other collaborators working with his organization.
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? 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.
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.
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 grants, which the non-profit has received or applied for.
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 material, mission and vision statements, and an annual report if the non-profit is not a startup.
The Bottom Line
Non-profit organizations also need to be managed effectively. The best way to achieve it is by developing a business plan. A non-profit business plan serves as a compass for the entire organization. Put simply, it outlines the non-profit’s goals and objectives, the organizational structure, the marketing, financial plan, and operational plans, as well as the products or services rendered by the organization.
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