Many people have ideas for nonprofit organizations, but they often overlook the crucial first step of making a business plan. When you want your nonprofit to match your vision, business plans are key to making that a reality.
Basics Sections of a Business Plan
- Executive Summary: a short summary of the entire document meant to entice readers
- Company Description: information about your organization and what it intends to accomplish
- Organization and Management Team: outlines the organization’s structure and provides bios of key people
- Products and Services: describes what your organization plans to sell or offer
- Market Analysis: provides data and conclusions relevant to your organization’s market focus
- Strategy and Implementation: summarizes your sales, marketing, and growth strategies
- Financial Projections: gives realistic projections for the balance sheet, income statement, and cash flow statement
What Makes a Nonprofit Business Plan Different
Nonprofit business plans are different from for-profit business plans because they don’t focus on showing how the organization intends to provide continuous profits for stakeholders. Instead, a nonprofit business plan describes how the organization intends to successfully carry out its charitable goals while raising enough funding to support itself.
The products and services section of a typical for-profit business plan is deleted and replaced with a section describing milestones and deadlines the organization believes it can achieve. Besides that exception, you should include all the other sections included in a for-profit business plan in your nonprofit’s business plan. Also, keep in mind that you should write your business plan to attract potential partners and donors aligned with the goals of the organization instead of profit-seeking investors.
Customizing Your Business Plan
A business plan usually runs about 30 to 50 pages in length, but you shouldn’t aim for that many pages if you don’t need them. If you complete the first draft of your plan and it’s only a few pages, then it likely needs some rethinking. You need to find a good balance of length and clarity, focusing more on the content quality of the pages than the quantity.
Make sure to include the essential points described above since most stakeholders want to know that information before getting involved. Once you polish these sections and make them as strong as you can, feel free to add anything else you’d like. It’s your organization, and since there are no set rules for business plans, you can customize your exactly as you see fit.
When considering your business plan, keep in mind that it’s very important to comply with all laws and regulations regarding nonprofits in Canada. This means you should review the Canada Not-for-Profit Corporations Act and similar documents before you get started. If you have the budget, consult with a qualified legal professional specializing in nonprofits to get advice about setting up your organization and pursuing donors.
Sustainability in Your Business Plan
A sustainability plan is a description of how your non-profit plans to stay open over the long-term. The plan usually covers your organization’s financial health, but it might also touch on how to handle leadership changes and significant external events, such as a new competitor or a sudden lack of volunteers. A succession plan should be part of your non-profit’s business plan you might also write mini-versions for large projects or grants to convince donors that you can carry on the work after the initial funding runs out.
Life Without a Sustainability Plan
Non-profits are often cash-strapped and lacking in crucial resources. If that sounds familiar, you might find that your staff are constantly hunting for new grants, donations, and membership fees rather than devoting their time to creating an impact in the community. In this desperate struggle for funds, it’s all too easy to stray from your original mission the thing that motivates employees and bonds them to the organization. This constant worry and hustle can create an atmosphere of despair that leads to stress and burnout.
Benefits of a Sustainability Plan
A sustainability plan can help you avoid this stress. It creates a sense of calm about your finances, which can take away the gnawing worry and a perpetual lack of funds. This confidence can have a big impact on your culture; since staff members don’t need to question job security, they can focus on making a difference, which leads to a more effective organization and happier atmosphere. A strong, positive culture makes it easier to attract and retain employees.
When your organization is sustainable, it’s easier to stick to your mission. Rather than running in all directions at once, you can focus on creating programs and initiatives that serve your audience. This is true for financial sustainability, but it also applies to leadership; when you know that staff can cover the gap while you search for a new director, there’s no need to scramble or panic when someone quits.
A sustainability plan makes it easier to create a stable funding environment. It helps ensure that your programs can continue running, even when donations drop or a non-profit funding source ends unexpectedly. That way, you don’t need to depend on unpredictable funding sources. This stability has a circular effect when donors and funding organizations see that you have an effective plan in place, they can give with more confidence, boosting your bottom line and creating additional financial security.
Perhaps one of the most important benefits of a sustainability plan is the ability to think big when it comes to opportunities. Instead of worrying about how to cover staff salaries next month, you can go after bigger grants and endowments. You have the freedom to take risks and dedicate time to dream projects that have big benefits for the people you serve.
Parts of a Sustainability Plan
Sustainability plans vary based on your organization’s current situation. They might detail how your organization plans to:
- Build an operating reserve that totals six months of operating costs
- Expand your individual donor base
- Create an annual giving membership program
- Seek multiple grants simultaneously
- Partner with local corporations
- Establish an online giving portal
- Hire a consultant to help you with long-term planning
The plan should also cover leadership succession; at a minimum, list the short-term responsibilities for each senior leader, and assign them to specific staff members so that you don’t miss important tasks in case of an unexpected departure. With a comprehensive plan, you can focus less on immediate emergency needs and adopt a big-picture, long-term mindset to guarantee your organization’s longevity.