Believe it or not, creating a business plan for a nonprofit organization is not that different from planning for a traditional business. 

Nonprofits sometimes shy away from using the words “business planning,” preferring to use terms like “strategic plan” or “operating plan.” But, the fact is that preparing a plan for a for-profit business and a nonprofit organization are actually pretty similar processes. Both types of organizations need to create forecasts for revenue and plan how they’re going to spend the money they bring in. They also need to manage their cash and ensure that they can stay solvent to accomplish their goals.

In this guide, I’ll explain how to create a plan for your organization that will impress your board of directors, facilitate fundraising, and ensures that you deliver on your mission.

Why does a nonprofit need a business plan?

Good business planning is about setting goals, getting everyone on the same page, tracking performance metrics, and improving over time. Even when your goal isn’t to increase profits, you still need to be able to run a fiscally healthy organization.

Business planning creates an opportunity to examine the heart of your mission, the financing you’ll need to bring that mission to fruition, and your plan to sustain your operations into the future.

Nonprofits are also responsible for meeting regularly with a board of directors and reporting on your organization’s finances is a critical part of that meeting. As part of your regular financial review with the board, you can compare your actual results to your financial forecast in your business plan. Are you meeting fundraising goals and keeping spending on track? Is the financial position of the organization where you wanted it to be?

In addition to internal use, a solid business plan can help you court major donors who will be interested in having a deeper understanding of how your organization works and your fiscal health and accountability. And you’ll definitely need a formal business plan if you intend to seek outside funding for capital expenses—it’s required by lenders.

Creating a business plan for your organization is a great way to get your management team or board to connect over your vision, goals, and trajectory. Even just going through the planning process with your colleagues will help you take a step back and get some high-level perspective.

A nonprofit business plan outline

Keep in mind that developing a business plan is an ongoing process. It isn’t about just writing a physical document that is static, but a continually evolving strategy and action plan as your organization progresses over time. It’s essential that you run regular plan review meetings to track your progress against your plan. For most nonprofits, this will coincide with regular reports and meetings with the board of directors.

A nonprofit business plan will include many of the same sections of a standard business plan outline. If you’d like to start simple, you can download our free business plan template as a Word document, and adjust it according to the nonprofit plan outline below.

Executive summary

The executive summary of a nonprofit business plan is typically the first section of the plan to be read, but the last to be written. That’s because this section is a general overview of everything else in the business plan – the overall snapshot of what your vision is for the organization.

Write it as though you might share with a prospective donor, or someone unfamiliar with your organization: avoid internal jargon or acronyms, and write it so that someone who has never heard of you would understand what you’re doing.

Your executive summary should provide a very brief overview of your organization’s mission. It should describe who you serve, how you provide the services that you offer, and how you fundraise. 

If you are putting together a plan to share with potential donors, you should include an overview of what you are asking for and how you intend to use the funds raised.

Opportunity

Start this section of your nonprofit plan by describing the problem that you are solving for your clients or your community at large. Then say how your organization solves the problem.

A great way to present your opportunity is with a positioning statement. Here’s a formula you can use to define your positioning:

For [target market description] who [target market need], [this product] [how it meets the need]. Unlike [key competition], it [most important distinguishing feature].

And here’s an example of a positioning statement using the formula:

For children, ages five to 12 (target market) who are struggling with reading (their need), Tutors Changing Lives (your organization or program name) helps them get up to grade-level reading through a once a week class (your solution).

Unlike the school district’s general after-school homework lab (your state-funded competition), our program specifically helps children learn to read within six months (how you’re different).

Your organization is special or you wouldn’t spend so much time devoted to it. Layout some of the nuts and bolts about what makes it great in this opening section of your business plan. Your nonprofit probably changes lives, changes your community, or maybe even changes the world. Explain how it does this.

This is where you really go into detail about the programs you’re offering. You’ll want to describe how many people you serve and how you serve them.

Target audience

In a for-profit business plan, this section would be used to define your target market. For nonprofit organizations, it’s basically the same thing but framed as who you’re serving with your organization. Who benefits from your services?

Not all organizations have clients that they serve directly, so you might exclude this section if that’s the case. For example, an environmental preservation organization might have a goal of acquiring land to preserve natural habitats. The organization isn’t directly serving individual groups of people and is instead trying to benefit the environment as a whole. 

Similar organizations

Everyone has competition—nonprofits, too. You’re competing with other nonprofits for donor attention and support, and you’re competing with other organizations serving your target population. Even if your program is the only one in your area providing a specific service, you still have competition.

Think about what your prospective clients were doing about their problem (the one your organization is solving) before you came on this scene. If you’re running an after-school tutoring organization, you might be competing with after school sports programs for clients. Even though your organizations have fundamentally different missions.

For many nonprofit organizations, competing for funding is an important issue. You’ll want to use this section of your plan to explain who donors would choose your organization instead of similar organizations for their donations.

Future services and programs

If you’re running a regional nonprofit, do you want to be national in five years? If you’re currently serving children ages two to four, do you want to expand to ages five to 12? Use this section to talk about your long-term goals. 

Just like a traditional business, you’ll benefit by laying out a long-term plan. Not only does it help guide your nonprofit, but it also provides a roadmap for the board as well as potential investors. 

Promotion and outreach strategies

In a for-profit business plan, this section would be about marketing and sales strategies. For nonprofits, you’re going to talk about how you’re going to reach your target client population.

You’ll probably do some combination of:

• Advertising: print and direct mail, television, radio, and so on.
• Public relations: press releases, activities to promote brand awareness, and so on.
• Digital marketing: website, email, blog, social media, and so on.

Similar to the “target audience” section above, you may remove this section if you don’t promote your organization to clients and others who use your services.

Costs and fees

Instead of including a pricing section, a nonprofit business plan should include a costs or fees section.

Talk about how your program is funded, and whether the costs your clients pay are the same for everyone, or based on income level, or something else. If your clients pay less for your service than it costs to run the program, how will you make up the difference?

If you don’t charge for your services and programs, you can state that here or remove this section.

Fundraising sources

Fundraising is critical for most nonprofit organizations. This portion of your business plan will detail who your key fundraising sources are. 

Similar to understanding who your target audience for your services is, you’ll also want to know who your target market is for fundraising. Who are your supporters? What kind of person donates to your organization? Creating a “donor persona” could be a useful exercise to help you reflect on this subject and streamline your fundraising approach. 

You’ll also want to define different tiers of prospective donors and how you plan on connecting with them. You’re probably going to include information about your annual giving program (usually lower-tier donors) and your major gifts program (folks who give larger amounts).

If you’re a private school, for example, you might think of your main target market as alumni who graduated during a certain year, at a certain income level. If you’re building a bequest program to build your endowment, your target market might be a specific population with interest in your cause who is at retirement age.

Do some research. The key here is not to report your target donors as everyone in a 3,000-mile radius with a wallet. The more specific you can be about your prospective donors—their demographics, income level, and interests, the more targeted (and less costly) your outreach can be.

Fundraising activities

How will you reach your donors with your message? Use this section of your business plan to explain how you will market your organization to potential donors and generate revenue.

You might use a combination of direct mail, advertising, and fundraising events. Detail the key activities and programs that you’ll use to reach your donors and raise money.

Strategic alliances and partnerships

Use this section to talk about how you’ll work with other organizations. Maybe you need to use a room in the local public library to run your program for the first year. Maybe your organization provides mental health counselors in local schools, so you partner with your school district.

In some instances, you might also be relying on public health programs like Medicaid to fund your program costs. Mention all those strategic partnerships here, especially if your program would have trouble existing without the partnership.

Milestones and metrics

Without milestones and metrics for your nonprofit, it will be more difficult to execute on your mission. Milestones and metrics are guideposts along the way that are indicators that your program is working and that your organization is healthy.

They might include elements of your fundraising goals—like monthly or quarterly donation goals, or it might be more about your participation metrics. Since most nonprofits working with foundations for grants do complex reporting on some of these, don’t feel like you have to re-write every single goal and metric for your organization here. Think about your bigger goals, and if you need to, include more information in your business plan’s appendix.

If you’re revisiting your plan on a monthly basis, and we recommend that you do, the items here might speak directly to the questions you know your board will ask in your monthly trustee meeting. The point is to avoid surprises by having eyes on your organization’s performance. Having these goals, and being able to change course if you’re not meeting them, will help your organization avoid falling into a budget deficit.

Key assumptions and risks

Your nonprofit exists to serve a particular population or cause. Before you designed your key programs or services, you probably did some research to validate that there’s a need for what you’re offering.

But you probably are also taking some calculated risks. In this section, talk about the unknowns for your organization. If you name them, you can address them.

For example, if you think there’s a need for a children’s literacy program, maybe you surveyed teachers or parents in your area to verify the need. But because you haven’t launched the program yet, one of your unknowns might be whether the kids will actually show up.

Management team and company

Who is going to be involved and what are their duties? What do these individuals bring to the table?

Include both the management team of the day-to-day aspects of your nonprofit as well as board members and mention those who may overlap between the two roles. Highlight their qualifications: titles, degrees, relevant past accomplishments, and designated responsibilities should be included in this section. It adds a personal touch to mention team members who are especially qualified because they’re close to the cause or have special first-hand experience with or knowledge of the population you’re serving.

There are probably some amazing, dedicated people with stellar qualifications on your team—this is the place to feature them (and don’t forget to include yourself!).

Financial plan

The financial plan is essential to any organization that’s seeking funding, but also incredibly useful internally to keep track of what you’ve done so far financially and where you’d like to see the organization go in the future.

The financial section of your business plan should include a long-term budget and cash flow statement with a three to five-year forecast. This will allow you to see that the organization has its basic financial needs covered. Any nonprofit has its standard level of funding required to stay operational, so it’s essential to make sure your organization will consistently maintain at least that much in the coffers.

From that point, it’s all about future planning: If you exceed your fundraising goals, what will be done with the surplus? What will you do if you don’t meet your fundraising goals? Are you accounting for appropriate amounts going to payroll and administrative costs over time? Thinking through a forecast of your financial plan over the next several years will help ensure that your organization is sustainable.

Money management skills are just as important in a nonprofit as they are in a for-profit business. Knowing the financial details of your organization is incredibly important in a world where the public is ranking the credibility of charities based on what percentage of donations makes it to the programs and services. As a nonprofit, people are interested in the details of how money is being dispersed within organizations, with this information often being posted online on sites like Charity Navigator, so the public can make informed decisions about donating.

Potential contributors will do their research—so make sure you do too. No matter who your donors are, they will want to know they can trust your organization with their money. A robust financial plan is a solid foundation for reference that your nonprofit is on the right track.

Business planning is ongoing

It’s important to remember that a business plan doesn’t have to be set in stone. It acts as a roadmap, something that you can come back to as a guide, then revise and edit to suit your purpose at a given time.

I recommend that you review your financial plan once a month to see if your organization is on track, and then revise your plan as necessary.

Additional Help

Our free business plan template can help you work through each section of your plan. Also, be sure to check out a complete nonprofit business plan example for reference. 

If you’re looking for a tool to help you write your business plan, you may want to check out LivePlan. It can easily be configured to create a nonprofit business plan with step-by-step guidance throughout the process. You’ll be able to easily develop forecasts and compare to your actuals through a single dashboard to actively plan, adjust, and present to investors and board members. It’s a great option to keep business planning simple so you can focus on serving those that you’re hoping to help.

Editor’s note: This article was originally published in 2014. It was updated in 2021.

When it comes to marketing, nonprofits have a few things in common. First and foremost, every nonprofit relies on marketing efforts to attract donors and volunteers. Every nonprofit, no matter how well staffed, could use more marketing resources. And, last but not least, there are never enough hours in the day to accomplish every task on the marketing to-do list.

I’ve noticed these common threads in every nonprofit that I have worked with as a marketing specialist. I’ve watched leaders and volunteers work 14-hour days, stay open late to accommodate clients, and network their hearts out to make sure there is enough money in the bank to keep their lights on. With so much going on, it’s no surprise that marketing sometimes takes a back seat.

However, when it comes to marketing, social media is an excellent tool for nonprofits. Social media can reach donors and volunteers, it doesn’t require multiple staff members to manage, and it doesn’t require a big time commitment.

To help nonprofits get the most out of social media, I’ve created this guide that nonprofits can use as a social media playbook. Whether you’re new to social media, or a veteran, this guide is full of tips to maximize your time and exposure.

Frequently asked questions:

Like any nonprofit, you probably have some questions. Here’s a quick list of the most frequently asked questions that I hear from nonprofits:

Which social media sites are best for nonprofits?

Nonprofits have had great experience with all kinds of different social platforms. Facebook and Twitter are the most common. If you’re just starting out, I would start with one of these two.

If you’re a social media veteran, you might want to try Jelly. It’s a new Q&A platform that lets you interact with a large following of people.

How many social media sites should we use?

You can use as many social sites as you’d like, but don’t over commit. Time is always a factor for nonprofits, so keep that in mind as you sign up for various social sites. If I had to give you a number, I’d say two social media sites is perfect.

How often should we post?

You should post at least once a day to every site that you run. If you can post more frequently, go for it. However, the key to social media engagement is consistency, so set a frequency schedule that you can stick to.

How often should we promote ourselves?

In the social media world, you want to adhere to the 80/20 rule. Eighty percent of your posts should be interesting content that’s relevant to your nonprofit; the other twenty percent can be promotional. You don’t want to go overboard with promotions because you’ll sound too desperate, which turns off your fan base.

What to post:

Wondering what kind of post are the most useful? Well, wonder no more. Here are five kinds of posts that every nonprofit should have on their social media sites:

1. Show people how you help

Help your audience make a connection with your nonprofit by sharing a story about those you help. Whether you assisted a family with medical care, provided food for the homeless, or helped stray animals, it’s important to show your audience how they help. Here’s a great example from the Animal Humane Society:

2. Try a reoccurring theme

You’re probably familiar with Throwback Thursday, right? For Throwback Thursday, every Thursday your friends post a picture from their past on their Facebook page. Well, you can try something similar. Think of a reoccurring theme that fits your nonprofit, and schedule posts ahead of time. For example, the Animal Humane Society has Success Story Saturday, and the Red Cross has Fire Safety Friday:

3. Share news updates

Share news articles that pertain to your nonprofit. It’s a great, unbiased way to keep your audience informed about changes that impact your organization. Livestrong, for example, shared this article from CNN on its Facebook page:

4. Say thanks

Social media gives your nonprofit the chance to publicly thank or acknowledge supporters. If a volunteer reaches a milestone or you receive a big donation, turn to social media and say thanks. It’s always nice to be recognized, like this tweet from the Susan G. Komen foundation does:

5. Promote events

When you host an event, use social media to get the word out. You can even set up an event on Facebook so people can register with ease. If you don’t know how, this short tutorial explains it in three easy steps. Here’s how a food shelf promoted an upcoming event:

In addition to these five posts, you can also share statistics about your organization, tie posts to upcoming holidays, share pictures of events as they happen, offer small historical tidbits about how your organization got started, and highlight volunteers. The options are endless.

Tips to grow your following:

The success of your social marketing relies on attracting the right fan base. Don’t get hung up on the number of followers. You’re looking for quality over quantity. Five hundred followers who have an interest in your organization and are willing to contribute to your success are more beneficial than two thousand followers who aren’t engaged with your nonprofit.

Here are some tips to attract your target audience:

• Share content from other nonprofits. Share the social media love. If you share content from another nonprofit, they might do the same, which exposes your nonprofit to more people.
• Tag others. Anytime you can tag others, you should. Again, it increases your exposure. So, when you’re thanking an organization for a big donation, or if you just teamed up with a new business, include them in your post.
• Put social media buttons in emails. Links to your social media pages should be embedded in your email signature. You should also include social media buttons in any email correspondence that you send out.
• Run a contest. To boost your fan base, you could host a contest or a giveaway. By asking your current followers to share links to the giveaway, you can boost your following quickly. Check out this post on HubSpot to learn more about running a successful social media contest.

Timesaving tools:

You don’t have to log into your social media accounts every day and create posts. There are several apps and online tools that you can use to juggle several social media sites and schedule posts ahead of time.

For example, with a management tool you can access your Twitter and Facebook account from one dashboard. You can post to both sites, schedule posts ahead of time, and keep an eye on your feeds—all from one place. Here are three of the most popular management tools:

• Hootsuite
• Buffer
• IFTT

• Use a curation tool (see below)

You’ll also want to share interesting content from other sources on your page, but who has time to scour the internet for articles, infographics, and videos that are relevant to your audience? To save time, use a curation tool. These tools scan the internet for content based on keywords that you supply. You get a list of relevant content, which you can share instantly or schedule for a later date. Here are two options:

• Swayy
• Klout

Final thoughts:

Social media is a marketing tool every nonprofit should have in its toolbox. It provides access to donors, volunteers, and even clients who may need your support.

How does your nonprofit use social media? Has it helped your organization? Tell us how you utilize social media as a marketing tool, and share your tips in the comment section below.