7 Steps to Write a Nonprofit Business Plan

Starting a nonprofit is like starting a business in many ways. It requires thorough strategy, intentionality, and execution. Along with filing your 501c3 form and assigning your Board of Directors, your nonprofit business plan is another critical nonprofit formation task. When done right, it will help you get your organization up and running quickly, laying out your mission and purpose, your fundraising and marketing models, and how you measure your goals. 

We've outlined seven steps to creating a strong nonprofit business plan. 

What is a nonprofit business plan? 

Though nonprofits are mission-focused rather than profit-driven, a business plan provides a blueprint for your organization. It helps clarify your mission and goals and outlines the steps to reach them. A nonprofit business plan describes the current state of your nonprofit and a roadmap for at least three to five years. 

Why do nonprofit founders need a business plan?

A business plan is essential whether your nonprofit is just in the idea phase or if you are already up and running. Every nonprofit needs a business plan for several reasons.

To run a successful organization, a solid business plan can help you:

• Outline your goals

• Clarify your mission and message

• Document your fundraising/financial model

• Attract qualified board members, donors, and volunteers

• Assist with applying for grants

Sitting down to write your nonprofit business plan can feel overwhelming, but we've outlined it step-by-step so you can get started with confidence.

Step 1: Gather Your Data and Documents

Before you write your business plan, be sure to collect your organization's critical financial data and documents, operating expenses, and other critical data you will need to showcase your organization's financial needs and goals. If your nonprofit is new, gather all the available information about funding sources you've secured and make operational funding projections, making sure to consider your organization's projected costs.

Step 2: Start with the Who, What, Why

Your business plan should begin with who you are as an organization, what you do (your mission statement), and why you do it (your core values), enabling you to outline your vision. Writing a mission statement requires you to explain exactly what your nonprofit does. 

A good starting point is asking and answering these questions: 

• Who does your nonprofit serve? 

• Why does it serve them? 

• How does it serve them? 

Here are some nonprofit mission statement examples to draw inspiration from:

• “To prevent and end homelessness for families with children in the communities we serve through housing, resources, and opportunity.”

• “Oceana's mission is to protect and restore the world's oceans. Our vision is for the oceans to be as rich, healthy, and abundant as they once were.”

• “Our vision is an informed, engaged, and connected city. Our mission is a free place for everyone to discover, create and share ideas and information.”

Creating a clear, targeted language that reaches a specific audience delivers benefits that even go beyond composing a great nonprofit business plan. A thoughtful and concise mission statement can help open doors to fundraising opportunities, attract the right individuals to sit on your board, and compel volunteers to get involved. 

“It is hard to put to words the value in having a team of dedicated people assist with the creation of a new nonprofit. Resilia has been invaluable in this process. The services, resources available and direct assistance provided have all been top notch.” - Dustin 

Need expert help to file and start your nonprofit? Schedule a consultation call.

Step 3: Write Your Outline 

An outline will help you organize your writing and focus on vital information. You should draft an outline for your business plan that includes your mission statement, budget, marketing, fundraising and financial model, volunteers, programs, board, goals, etc.

Step 4: Explain Your Offerings

This section describes your organization's activities, including the programs, products, and services you offer. Be sure to answer these questions:

• What products, programs, or services do you provide? 

• How does your non-profit benefit the community? 

• What need does your nonprofit meet and what are your plans for meeting that need?

Step 5: Write Plans for Key Areas 

The next step is to outline your Funding, Financing, Marketing, and Operational Plans. These sections should provide a clear, detailed plan for how you intend to execute in these areas. If your nonprofit is new, outline projections based on the research you’ve gathered about your community, cause, and funders supporting similar causes. 

Financial - A financial plan is one of the most critical parts of a nonprofit business plan. It will help ensure that your organization has its basic financial needs covered, and should include:

• Your nonprofit’s startup costs

• An outline of your current and future financial projections

• An income statement, balance sheet financial, cash flow statement, and financial projections

• Any grants, contributions, and in-kind support you’ve received

• A fundraising plan that includes funding gaps, if any, and how you will manage them, as well as what will be done if you have surplus funding

Marketing - A marketing plan should describe all of your marketing efforts. It will likely be your most detail-heavy section because it should outline how you plan to deliver on your business plan. If you’re a new nonprofit, be sure to do your research and include projections based on what you’ve gathered. Your marketing plan should include:

• Research that outlines your target audience

• Donors

• Similar nonprofits competing for the same donors

• Potential partners 

Outline any marketing activities such as campaigns and initiatives you’ve executed, and the outcomes.

Operational - An operational plan describes how your nonprofit executes its work. It should provide an overview of the day-to-day operations of your organization including the people and partners you work with, any legal requirements your organization needs to meet, and any other operational needs you have. 

In this section, you should also include your team, board members, and any other individuals critical to your organization. If you’re a solo founder, include your bio.

Step 6: Your Impact Plan

Your impact plan should be precise about how your nonprofit will achieve the Who, What, and Why. It should include details on what change you’re seeking to make, how you will make it, and how you will measure it. Funders want to know for whom, in what way, and how you’ll measure your impact.

The Impact Plan should answer these questions:

• What goals are most meaningful to the people you serve?

• How can you best achieve those goals?

Step 7: Executive Summary and Appendix

Though it is often written last, every great business plan should begin with an executive summary that provides a quick but compelling introduction to your organization. Your executive summary should describe your overall purpose (going into more depth than your mission statement does), summarize market research and analysis, and tell how your organization will meet that need. In the Appendix, you can include additional essential documents for your nonprofit, such as an organizational flow chart, current fiscal year budget, a list of the board of directors, your IRS determination letter, balance sheets, and more.