Writing a Nonprofit Business Plan

Every nonprofit manager knows that a written business plan is a crucial tool in obtaining grant funding. But while the plan document is important, the process your nonprofit organization’s leaders go through to develop it may be the best thing about it. The creation and implementation of the plan encourages strategic thinking.

The business-planning process offers decision-makers an opportunity to step back and look at the organization as a whole and to specify the resources required for each project and each department. You’ll establish performance measures to allow everyone to see whether the goals are being achieved. When you implement the plan, you’ll find that the process leads to new challenges, new decisions and trade-offs.

Notepad with words business plan concept and glasses
flow chart showing business plan at top and then flows to mission, market analysis, and strategy before being cut off

The planning process will create a sharper definition of the population you want to serve, identify aspects of the program model you need to supplement, and see how to prioritize a list of potential expansion sites if that’s part of your plan. You’ll be developing estimates of how much each new initiative will cost, with a detailed timeline for getting the work done. It will describe who’s crucial to your organization and any staff changes you may want to make.

Help for the long term

Business plans guide your growth. Your management team will find that the planning process changes its approach to decision-making, knowing the right questions to ask when evaluating new opportunities, and having better insight into how to use data and research to inform decisions. And planning will help you see what your nonprofit team is good at, making it easier to say no to things that don’t make sense for the group. Knowing the financial details is key in a world where the public demands transparency about where donations are going.

The business-planning process usually includes four distinct components:

  • Strategic clarity — You’ll develop a concrete description of the impact you intend to have in the time period you’re detailing. Define the projects you want to work on and the impact they will have.
  • Priorities — You’ll be determining which specific actions and activities you’ll work toward during the target period.
  • Resource implications — You’ll figure what financial, human and organizational resources are needed to secure the impact you want to achieve.
  • Performance measures — You’ll establish quantitative and qualitative milestones to measure your progress.

In practice, these components are tightly linked. You won’t find that the planning process is linear; you’ll probably be circling back on critical decisions as new information emerges. Your written plan will result from the process.

Planning requires discipline, and implementation takes even more. You may want to develop milestones to help you see whether you’re on track and to give to the board to help monitor your progress. You can use them to communicate with funders and other supporters to show your commitment to new directions and your progress in implementation. You’ll demonstrate whether your organization is doing work it intends to do and whether that work is translating into desired results. And that will help with grant applications as well.

Overall, you’ll align your management team, staff and board on achieving significant impact, you’ll decide what your nonprofit is willing to hold itself accountable to, and you’ll enhance your group’s ability to get work done.

To learn more about how our firm can serve your nonprofit organization, don’t hesitate to contact Kathy Corcoran at (302) 254-8240.


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