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How to write a business plan for nonprofit organization

How to Write a Business Plan for Non Profit Organizations

Let's go through these sections in detail. Executive Summary As the essay on pollution global warming implies it is a summary of the entire plan and is prepared after the complete plan document has been drawn up. It plan for website business advertising stakeholders, advisors and staff brief information about what the organization is currently doing and what it is up to in the coming period.

Vision and Mission Statement A Vision statement tells the whole world "what" the NPO wants to achieve and for what purpose it is in existence. It sets the boundaries within which employees can decide and act towards achieving results and also informs third parties like investors, vendors, and clients dealing with the organization what the NPO expects from them.

Values Goodwill is the strongest asset to any NPO. As a non-profit organization, an NPO has to approach government and non-government entities for aid and donations to fund their activities and also approach the community for support to their service.

Such entities would donate and support only if the NPO has strong goodwill and reputed name. To ensure this, any NPO has to have a work culture based on good values, which are listed as part of the strategic plan to remind all internal staff and external stakeholders the values recognized and adhered by the NPO.

Values respected by a typical NPO would include qualities like integrity, trustworthiness, honesty, transparency, teamwork, accountability, etc. Campaigning the Cause The NPO has to sell its laudable cause, purpose and the change it wants to bring about through its service to governments, foundations, philanthropic entities and individuals to obtain grants and raise funds.

The success of its operations and achievement of the goals how write depends on funds raised through various campaign methodologies adopted by the NPO. In a for-profit organization, the marketing function is very important as this brings in the revenues for the organization without which the organization will not survive. In an NPO, products, and services are not marketed but the cause and purpose are sold as a noble concept to governments and foundations that give grants to NPOs.

Similar to any marketing activity, the NPO should plan its campaign of conveying its message to such entities and convincing them to make grants in its favor. This section details exhaustively everything an NPO has to do to raise the targeted funds, leaving no stone unturned, including the message, whom to approach, how to approach and grant seeking methodologies.

Having stated the Vision, Mission, and Values of the NPO, and detailing the campaign to be adopted to sell the cause, the strategic plan should now lay down Goals, Tasks and Key Performance Indicators to be achieved. Goals and Tasks The purpose of preparing a strategic plan is to achieve definite goals and complete specific nonprofit organizations by the end of the plan period.

NPOs are generally service providers and a goal could be a number of beneficiaries to be serviced during the plan period. When plan period is 3 to 5 years, long-term goals can be broken down into annual goals under the SMART rule and any shortcoming in one year can be made good in the subsequent plan year. Such goals identified and defined help employees of the NPO to clearly understand what they have to do and achieve.

Nonprofit Business Plan Strategy

In the course of operations during the plan period when actual performance is compared with the goals set, employees can find where they stand and take necessary steps if needed to achieve the goals as planned. Goals set also help NPO management to monitor whether the resources of people, money, and technology are used appropriately to achieve the set goals.

Where deviations are found, the NPO management can take corrective measures to bring back the NPO activities on the right and planned track. Hence it is important to clarify and list all the goals and targets to be achieved by the NPO.

It informs everyone in the organization what the NPO is planning to achieve in the current plan period and in the period immediately following. Key Performance Indicators NPO's activities have to be conducted efficiently with high productivity as resources are scarce while goals and targets are high.

Efficient and productive use of donated grants and funds will strengthen the goodwill and image of the NPO helping it to raise funds with ease in the future. To deploy resources efficiently, the strategic plan identifies and sets benchmarks as key performance indicators that would be used to measure and show how efficiently the NPO activities have been conducted during the plan period. As the very name implies, Key Performance Indicator KPI is a measure that tells how efficiently a key activity has been performed.

A Sample Non-Profit Organization Business Plan Template

Key activities that determine the success of an organization are listed and measured periodically to find how efficiently the organization is functioning. In the transportation industry, the number of passengers transported or quantum of cargo carried may be a key factor. In a service industry, like for example insurance, the number of policies sold will be a key performance indicator.

When goals are broken into key performance activities and benchmarks are set for such activities, comparison of actual performance with such benchmarks "indicates" how efficiently activities are being performed. Once activities are identified and benchmarks set, monitoring key performance indicators becomes a continuous process for the NPO's management to correct deviations in the right time.

How to write a business plan for nonprofit organization; business planning for nonprofits

Key Performance Indicators also help in improving the efficiency of an organization's operations by comparing performance with similar competing entities in the same industry. As mentioned above competing insurance service providers can compare their key performances and strive to improve their efficiency to beat the competition.

An NPO should derive the maximum benefit out of its resources as they have been obtained after sustained efforts from donors. Hence an NPO should set key performance indicator for every activity possible to measure the utilization of its resources.

The more the benefit, the better are the chances of getting how to write a business plan for nonprofit organization grants and donations in the future. Human Resources Human resources development and deployment is a very important factor for the success of any organization. The strategic plan has to detail existing human resources, additional manpower needed to execute targets set, training needs of staff, authority and accountability in performing various tasks and empowerment to take decisions in the right time.

The strategic plan should also clearly define the organization hierarchy such that operational issues are properly escalated and solved in right time without wastage of resources. Having set goals and tasks along with key performance indicators to measure efficiency, the NPO should now analyze their strengths and opportunities to make use of and their weaknesses, threats, and risks to be cautious about while executing the strategic plan.

A large army could be his strength, lack of adequate firepower or air support could be his weakness, civil disturbance in the opponent country could be an opportunity to attack while the opponent country having a stockpile of nuclear weapons could be a threat! Similarly, business strategies are drawn up after analyzing business strengths, weaknesses, opportunities and threats, termed as SWOT Analysis.

The SWOT Analysis includes not only the listing of strengths, weaknesses, opportunities, and threats but also how they are going to be managed. The NPO should plan how read article is going to use its strengths to increase its activities in raising more funds to serve more beneficiaries, how it is going to overcome its weaknesses, how it is going to use opportunities to expand its activities and what steps it is going to take to meet a threat.

Sustenance of activities is a very important requirement for any NPO and to ensure this the NPO has to identify and leverage its strengths and opportunities to overcome weaknesses and threats.

Risk Analysis Most of the activities of an NPO are dependent on environmental or outside factors beyond the control of the NPO, having an inbuilt element of risk while being performed.

Hence an NPO having defined its goals and targets should identify possible risks that may arise while executing the strategic plan to achieve the goals. After listing the risksan NPO should detail how it is going to avoid and manage the risk if it occurs. A shortfall in revenue in a for-profit organization can be met with how to write a business plan for nonprofit organization and long-term borrowings from investors and lending agencies.

But in an NPO shortfall in revenue will undermine its activities and to sustain its present activities and growth plans, an NPO should always be raising sufficient funds from targeted sources. To ensure this an NPO should identify the risks that may occur in obtaining the needed funds and be ready with alternate and precautionary actions in its strategic plan against such risks.

Financial Projections The strategic plan is to be quantified to monitor performance and evaluate results achieved. A Financial Projection of revenues and expenses is to be drawn up for the current period and the plan period.

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Generally, it is a three year period for which projections are made to be as realistic as possible. For the immediate current period, the annual plan is broken down into monthly or quarterly plan source effective monitoring of actual performance and timely correction of deviations. If KPIs measure the efficiency of individual activities that constitute an organization's overall operations, Financial Projections targets monitors the overall health of the organization.

In a for-profit business organization improving the how to write a business plan for nonprofit organization line will be the objective, measured by the projected profit to be achieved during the plan period. In an NPO where profit is not the motive, Financial Projections fix expense budgets to be within allocated resources for various activities.

An NPO can spend only what it raises as grants and funds from its beneficiaries and hence everyone in the NPO should know how much they can spend on various activities to be within the available funds' position. Where expenses go beyond the projected limits, the NPO management takes corrective action to bring down such expenses.

An NPO Financial Projection also forecasts grants to be received and funds to be raised during the plan period. The staff team entrusted with this activity should ensure that the targeted grants and funds are raised to meet the expenses planned during the plan period.

Where it is found that the planned fund-raising is falling below targeted values, the NPO management should increase its efforts in this regard to raise the shortfall grants and funds.

Measurement of Success The strategic plan should specify clearly how the NPO will measure the success of its activities. This will be a measurement of its services, as an NPO, since there would be no profit to judge the success of any NPO operations. In this section, details of what to just click for source and how to measure the various achievements of the NPO is explained.

What to measure will generally be based on goals and tasks set by the NPO to be achieved during the plan period. How to measure success will be a methodology used to measure the actual performance of NPO compared to the targets set for each goal. Plan Appraisal Having prepared the strategic plan, it should be used by all stakeholders in achieving the targeted results and not just maintained in the organization's archives.

The NPO's management should conduct periodical reviews of actual performance in comparison with the strategic plan, call for review meetings with concerned staff and take corrective steps wherever deviations are reported.

The strategic plan is not only for guiding the NPO in the right direction but should also help in monitoring the activities of the NPO.

A management reporting and information system should be in place to report actual performance to the corporate management. Variance reports should be prepared periodically and circulated to concerned staff for taking corrective action, well in time. Conclusion Strategic Plan for a non-profit organization is essential as resources are scarce while their applications are always high.

Strategic Plan helps to utilize resources effectively and efficiently, thereby performing better and achieving the goals set in the annual plan. When set tasks are how to write a business plan for nonprofit organization as planned, the NPO is recognized as a good performer by governments, foundations, and philanthropists enabling the NPO to obtain higher grants and raise more funds for its activities in the following years.

Download this sample template in Microsoft Word docx format. Published by iPlanner.

Creating a Nonprofit Business Plan That Works


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