A nonprofit business plan is an essential tool for any organization looking to grow and achieve its goals. By taking the time to develop a comprehensive plan, your nonprofit can ensure that it is on the right track for success.
What is a Nonprofit Business Plan?
A nonprofit business plan is a document that outlines the goals, strategies, and financial projections of a nonprofit organization. It can be used to attract funding from donors or investors and to track the progress of the nonprofit over time.
Why Do You Need a Business Plan For Your Nonprofit?
A nonprofit business plan is important for several reasons.
- It can help you clarify your organization’s goals and strategies.
- It can help you assess the feasibility of your proposed projects and programs.
- It can be used to attract funding from donors or investors.
- It can help you track the progress of your nonprofit over time.
Preparing To Write Your Nonprofit Business Plan
Every nonprofit group needs to have a business plan in place before its existence. The purpose of the business plan is to provide direction and ensure that the nonprofit’s resources are used in an effective manner.
The first step in writing a nonprofit business plan is to conduct a feasibility study. This study will help to determine whether or not the nonprofit is viable and whether or not it has the potential to be successful. The feasibility study should include an assessment of the current market, an examination of the competition, and a review of the financial resources that are available to the nonprofit.
The nonprofit must be able to answer the following four questions:
- What will you do?
- How will you do it?
- Who will be responsible for carrying out your activities?
- What resources (money, people, equipment) do you need in order to carry out your plans?
Once the feasibility study has been conducted, the next step is to develop a mission statement for the nonprofit. This statement should explain what the nonprofit is trying to achieve and why it exists. The mission statement should be clear and concise, and it should be easy for nonprofit staff, board members, and donors to understand.
The nonprofit’s mission statement should be clear and concise. It should answer the following questions:
- What is your nonprofit organization’s purpose?
- What are your goals?
- Who do you serve?
- What makes you unique?
Next, determine your target audience. Who do you plan to serve with your nonprofit services? You need to know their characteristics (location, age range, gender, income level, etc.). This information will help you determine how best to reach them and what services to offer.
Once you know your target audience it is important to determine what services you will offer them. List each service in detail including what it is, how it will benefit your target audience, and what resources are needed to provide it.
Now that you know these key pieces of information, it’s time to develop a nonprofit business plan that will help the nonprofit grow over time. The business plan should include information on the nonprofit’s products, services, target audience, nonprofit marketing strategies, nonprofit operations plans utilizing its human resources and financial resources.
In addition to the four questions listed above, your nonprofit’s business plan should also answer the following:
- What is your nonprofit’s organizational structure?
- How will you raise money?
- What are your marketing plans?
- What are your policies and procedures?
Your nonprofit’s business plan is a living document that should be updated regularly as your organization grows and changes. It is important to revisit it often and make sure that all of your plans and activities remain in line with your mission statement.
How to Write Your Nonprofit Business Plan
There is no one formula for writing a nonprofit business plan. However, there are a few key elements that every business plan should include. Here are the essential components:
- Executive Summary – This is a summary of your entire business plan, and should include a brief description of your nonprofit organization, its mission and goals, the problem you are trying to solve, your proposed solutions, and an overview of your financial projections.
- Organization Overview – This section should include a description of your nonprofit organization, its history, governing structure, and key programs and services.
- Products, Programs, and Services – This section should describe the products, programs, and services your nonprofit offers in detail.
- Market Analysis – This section should include an analysis of the nonprofit market, including information on the size of the market, the competition, and the needs and wants of your target audience.
- Customer Analysis – This section should include an analysis of your nonprofit’s target audience, including information on their demographics, needs, and wants.
- Marketing Strategy – This section should include a detailed marketing plan, including information on how you will reach your target audience and what methods you will use to promote your products, programs, and services.
- Operations Plan – This section should include a detailed description of your organization’s day-to-day operations, including information on staffing, facilities, equipment, and supplies.
- Management Team – This section should include the biographies of your nonprofit’s governing board members, executive director, and any other key staff.
- Financial Plan – This section should include a detailed financial forecast, including information on your nonprofit’s income and expenses, as well as projections for the next three to five years.
- Appendix – This section can include additional information such as copies of your nonprofit’s bylaws or articles of incorporation, letters of support from key stakeholders, or market research surveys.
Learn more about each of these essential components using our nonprofit business plan template.
Sample Nonprofit Business Plan
Nonprofit Business Plan Example – Let Children Prosper
Let Children Prosper is a nonprofit organization that provides educational resources to low-income families in the New Orleans, LA community. The organization was founded in response to the high school dropout rate in the city, which is disproportionately high among low-income students. Let Children Prosper’s goal is to help these students stay in school and graduate with the skills they need to succeed in life.
Let Children Prosper was founded in 2014 by Jamal Brown and Latonya Williams. The organization is a 501(c)(3) nonprofit and operates out of New Orleans, LA. Let Children Prosper’s mission is to provide educational resources to low-income families in order to help their children succeed in school and beyond.
Our nonprofit’s mission is to provide educational resources to low-income families so their children can stay in school and graduate with the skills they need to succeed. Let Children Prosper believes that education is the key to breaking the cycle of poverty and helping low-income individuals and their families achieve economic security.
Our nonprofit aims to expand our presence throughout New Orleans, LA by securing funding from both public and private sources. We also hope to reach schools throughout Louisiana and other states.
Products, Programs, and Services
Our nonprofit’s vision is to provide educational resources to low-income families with children who are at risk of dropping out of school due to a lack of resources.
Our nonprofit works to equip these students with the skills necessary for achieving economic security, which makes them more likely to graduate high school and attend college or vocational school.
We aim for our nonprofit’s services to be accessible throughout New Orleans, LA as well as schools across Louisiana and other states so that we can reach as many families in need as possible.
We hope that by offering free programs such as financial literacy classes and workforce development services, Let Children Prosper will help break the cycle of poverty by equipping low-income individuals with the skills needed for achieving economic stability. Listed below are some of our nonprofit’s core programs.
- Financial Literacy Classes: These classes provide essential information about financial planning and budgeting so that families can make sound financial decisions for their children’s education and future.
- Workforce Development Services: These services help prepare individuals for careers by teaching them essential skills such as resume writing, interviewing techniques, and job search strategies.
Our nonprofit’s target audience is low-income families with children who are at risk of failing school due to a lack of educational resources.
According to the National Center for Children in Poverty, “Although poverty rates declined during the 1990s, they remain high; 21 percent of American children under age 18 (16 million) were poor in 2010, compared to 18 percent (15 million) before the recession” (NCCP).
Let Children Prosper offers several core programs that provide resources such as financial literacy classes and workforce development services which our target audience needs to help them through difficult times and equip them with skills necessary for achieving economic security.
A study conducted by Tulane University reports that students living in New Orleans, LA are three times more likely to drop out of school than other students in Louisiana and the rates of high school dropouts among students living in poverty are approximately seven times as high as those living above poverty (Tulane University).
Given these alarming statistics, it is evident that our nonprofit is much needed in the area.
Our nonprofit’s customers are low-income families who have children who are at risk of dropping out of school.
These families may not have access to essential resources that their children need in order to stay in school and graduate.
Let Children Prosper offers financial literacy classes and workforce development services that can help these students achieve economic security and break the cycle of poverty.
The table below shows data from a study conducted by Tulane University which illustrates that there is a significant need for our nonprofit’s services.
% of Population Living in Poverty
|Number of Low-Income Children||
% of All Children Living in Poverty
Source: Tulane University
The table above shows that there is a significant need for our nonprofit’s services among low-income families who are of different races and ethnicities.
For example, the percentage of African American children living in poverty is 71%, which is significantly higher than the percentage of Caucasian children living in poverty (10%).
This data illustrates that our nonprofit reaches a wide variety of people who are in need and provides them with essential resources that they may not have access to otherwise.
Our marketing strategy will include the use of print, radio, and television advertisements as well as social media platforms such as Facebook and Twitter.
We will also distribute flyers and brochures in local schools, community centers, and churches.
Lastly, we will host information sessions and workshops to provide more detail about our nonprofit’s programs.
The table below shows data from a study conducted by Nielsen which illustrates that African American families are more likely to watch television than Hispanic and Caucasian families.
This data indicates that Let Children Prosper should focus on running television advertisements since this is the most effective way to reach our target audience.
We should also consider running radio advertisements, as African American and Hispanic families are more likely to listen to the radio than Caucasian families.
Lastly, we should focus on using social media platforms such as Facebook and Twitter to reach our target audience.
Let Children Prosper is a nonprofit organization that offers workforce development services and financial literacy classes to low-income families who have children at risk of dropping out of school.
The organization’s day-to-day operations will include providing these services to the target audience.
Let Children Prosper will be staffed by a team of experienced professionals who are passionate about helping low-income families break the cycle of poverty.
Let Children Prosper will operate out of a facility that is located in a low-income area. This facility will be equipped with the necessary resources to provide our services.
Let Children Prosper will need to purchase supplies in order to provide workforce development services and financial literacy classes.
Goals & Initiatives
Our nonprofit has three primary goals which we will focus our efforts on achieving in the 20XX fiscal year:
- Goal 1: To provide quality educational programming and services to students in need.
- Goal 2: To increase the academic success of students in our programs.
- Goal 3: To secure funding to support our programs and services.
To achieve our goals, we will undertake the following initiatives:
- Initiative 1: Expand our tutoring and case management programs to serve more students.
- Initiative 2: Conduct research on best practices in nonprofit education and implement these practices in our programming.
- Initiative 3: Hold fundraising events and seek corporate sponsorships to generate revenue for our nonprofit.
- Initiative 4: Increase the visibility of our nonprofit through marketing and communications efforts.
Let Children Prosper will be operated by a staff of five people who will be responsible for managing the nonprofit’s programs and services.
Let Children Prosper’s organizational structure can be seen below:
The nonprofit will be overseen by a Board of Directors, which will consist of community leaders and volunteers.
The nonprofit’s Director and Program Manager will work closely with the nonprofit’s Board of Directors to monitor our nonprofit’s progress and evaluate the effectiveness of our programs.
Our nonprofit will also hire tutors and case managers who will provide individualized attention to students in need which are vital for their academic success.
Sue Smith is the nonprofit’s Director and Program Manager. She has over 10 years of experience working with nonprofit organizations, and she has a degree in Sociology from Tulane University.
George Brown is the nonprofit’s Program Manager. He has over 5 years of experience working with nonprofit organizations, and he has a degree in Business Administration from Southern Methodist University.
Caitlin Moore is the nonprofit’s Development Director. She has over 7 years of experience working in nonprofit development, and she has a degree in Psychology from Tulane University.
Jessica Doe is the nonprofit’s Fundraising Coordinator. She has over 5 years of experience working in nonprofit fundraising, and she has a degree in Communication Studies from the University of Texas at Austin.
Lisa Davis is the nonprofit’s Marketing & Communications Specialist. She has over 10 years of experience working in nonprofit marketing and communications, and she has a degree in Journalism from the University of Texas at Austin.
Board of Directors:
Kelly Johnson is the nonprofit’s Board Chairperson. She is a community leader and business owner who has over 20 years of experience working in the nonprofit sector.
John Doe is the nonprofit’s Board Vice-Chairperson. He is a community leader and business owner who has over 20 years of experience working in the nonprofit sector.
Mary Smith is the nonprofit’s Board Treasurer. She is a community volunteer who has over 10 years of experience working in the nonprofit sector.
Sam Smith is the nonprofit’s Board Secretary. He is a community volunteer who has over 10 years of experience working in the nonprofit sector.
Let Children Prosper’s nonprofit board of directors has a combined 20 years of experience working in nonprofit leadership and management.
Over the course of Let Children Prosper’s first year of operations, we expect that the nonprofit will need to hire tutors and case managers as well as new volunteers to help with fundraising efforts; however, these positions will not be included in our nonprofit’s budget for 20XX.
Our nonprofit is a 501(c)(3) nonprofit organization and relies on donations from individuals, businesses, and other organizations to fund our programs and services.
In order to continue providing our essential programs and services, we need to secure funding from both public and private sources.
Some of the ways in which we hope to secure this funding include applying for grants, holding fundraising events, and seeking corporate sponsorships.
Our nonprofit’s income statement is shown below:
Expenses & Costs
|Cost of goods sold||$57,960||$122,245||$122,523||$128,328||$134,035|
|Total Expenses & Costs||$271,850||$412,775||$435,504||$454,131||$473,263|
|Net Operating Loss||-$80,431||-$80,431||$0||$0||$0|
|Income Tax Expense||$0||$1,689||$42,853||$59,344||$77,911|
Net Profit Margin (%)
As a result of our net income of $83,568 in Year 2, we will be able to continue providing our essential programs and services to the community.
Our nonprofit’s balance sheet is shown below:
|Total Current Assets||$37,710||$113,340||$184,482||$286,712||$423,416|
|Net fixed assets||$209,490||$172,530||$135,570||$98,610||$61,650|
LIABILITIES & EQUITY
TOTAL LIABILITIES & EQUITY
The nonprofit’s net assets will increase by $35,000 as a result of our income statement.
Cash Flow Statement
Our nonprofit’s cash flow statement is shown below:
|CASH FLOW FROM OPERATIONS|
|Net Income (Loss)||-$80,431||$83,568||$79,583||$110,210||$144,693|
|Change in working capital||-$11,340||-$1,625||-$2,350||-$2,133||-$2,409|
|Net Cash Flow from Operations||-$54,811||$118,902||$114,193||$145,037||$179,244|
|CASH FLOW FROM INVESTMENTS|
|Net Cash Flow from Investments||-$246,450||$0||$0||$0||$0|
|CASH FLOW FROM FINANCING|
|Cash from equity||$0||$0||$0||$0||$0|
|Cash from debt||$317,971||-$45,424||-$45,424||-$45,424||-$45,424|
|Net Cash Flow from Financing||$317,971||-$45,424||-$45,424||-$45,424||-$45,424|
|Net Cash Flow||$16,710||$73,478||$68,769||$99,613||$133,819|
|Cash at Beginning of Period||$0||$16,710||$90,188||$158,957||$258,570|
|Cash at End of Period||$16,710||$90,188||$158,957||$258,570||$392,389|
The nonprofit’s expected cash balance of $90,188 will be used to continue providing our essential programs and services to the community.
For 20XX, we expect that most of our funds will come from private donations; however, we require some donations for our operating expenses. As a result, the nonprofit plans to apply for grants this year.
Additionally, the nonprofit is always looking for opportunities to expand its fundraising efforts with events or corporate sponsorships. The nonprofit has also begun looking into ways we can use social media to develop a stronger online presence and increase brand awareness.
Let Children Prosper is committed to transparency and accountability. We will be publishing our nonprofit’s annual report on our website which will include a financial overview as well as program and service highlights.
The nonprofit plans to seek out individual donors as well as larger contributions from businesses and other organizations.
Our nonprofit relies on donations from individuals, businesses, and other organizations.
In order to continue providing our essential programs and services, we need to secure funding from both public and private sources. Some of the ways in which we hope to secure this funding include applying for grants, holding fundraising events, and seeking corporate sponsorships.
In order to generate more donations, we will be undertaking the following fundraising initiatives:
- Annual Appeal Letter: This letter will be sent to past donors in order to request contributions for our nonprofit’s education programs.
- Social Media Campaign: We will create a social media campaign on various platforms such as Facebook, Twitter, and Instagram to promote our nonprofit’s work and request donations from the public.
- Online Fundraising Page: We will create an online fundraising page where individuals can donate to our nonprofit.
As a nonprofit organization, we aim to engage in donor outreach and online fundraising through websites such as Facebook and PayPal. We also plan to create a nonprofit blog where individuals can stay informed about our mission and learn how they can become involved with Let Children Prosper.
We are also exploring the option of hosting an annual fundraiser that will feature live entertainment, food, drinks, and opportunities to interact with nonprofit representatives.
Our nonprofit’s Board Treasurer is also a member of the Grants Coordinating Committee for the nonprofit’s parent organization which has resources that may be useful in securing grant funds for Let Children Prosper. Additionally, the nonprofit will begin looking into using social media such as Facebook or Instagram to increase brand awareness and improve brand recognition among our target audience.
The nonprofit has also applied for membership in the National Association of Nonprofit Organizations & Executives which will provide access to additional resources and training related to nonprofit management and fundraising.
Writing a Nonprofit Business Plan Conclusion
Developing this type of business plan can be challenging for many nonprofit groups because they may lack familiarity with basic business principles such as market research and financial projections. There are several steps that can be taken to make the process go more smoothly:
- Get your team involved – A strong team effort will not only ensure that everyone has a voice when it comes to planning but also increase buy-in and motivation.
- Utilize resources – There are many helpful resources available for nonprofit organizations, including books, online tutorials, and non profit business plan templates. Get our FREE nonprofit business plan pdf or nonprofit business plan Word.
- Seek expert help – If you’re feeling overwhelmed or unsure where to start, it may be helpful to consult with an experienced business consultant or nonprofit organization.
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