Tips for Writing a Nonprofit Business Plan


Some of the most amazing entrepreneurs that I’ve ever supported have been folks that wanted to launch a nonprofit. They’re trying to do something philanthropic or socially conscious and they assume a nonprofit is the way to do that. They come to me looking for help with their nonprofit business plan.

Once we sit down and have a discussion, they often realize there are quite a few things they didn’t know. They found themselves wishing someone had told them these things BEFORE they started, before they established their entity.

The fact is, there are a lot of misconceptions about what it takes to start a nonprofit and how to make it successful.

Nonprofit businesses are often harder to launch and grow than a regular business. Most nonprofits are charitable businesses that are operating based on the goal of people helping people. However, running the business means you aren’t necessarily available to do the volunteer work most nonprofits require. The reality is that most nonprofits need at least some paid staff to make it operate successfully.

It’s important to talk about what every person hoping to start a nonprofit should know in the beginning stages. It is critical to discuss how they can get started on their nonprofit business plan.

Securing Grants

When it comes to getting the money you need, you may be thinking about donations or grant funding. You may figure you can do lots of things to attract income that’ll support the business. While yes, there are often different funding sources available, that doesn’t automatically mean those funds will go to your nonprofit.

Some of the most amazing nonprofits I’ve seen are no longer around today because they put way too much hope and faith into government grants. Securing a government grant is only half of the battle — and it’s a battle that’s hard to win.

There’s a lot of competition to land grants and they’re often laden with numerous stringent expectations and rules. If you don’t do something perfectly on an application you’ll be immediately disqualified.

Once you’re past the application stage and receive a grant, there’s a whole other phase that you’ll have to be ready for. There may be quarterly submissions tracking your financials and how you’re using that grant funding. The government requires accountability as there’s a specific purpose for the grant.

The reality is, grants aren’t just “free money” which you can spend however your nonprofit needs to use it. Additionally, managing grants will often require staff to manage all of the steps and processes. That’s something you’ll have to consider when writing your nonprofit business plan.

What to include in your business plan: Outline the specific grants and grant creation organizations you want to pursue, and the grant value for each one.

Soliciting Donations

Besides government grants, the other aspect that people often overlook is the fact that fundraising is really, really difficult. It’s not enough to say that you’re going to ask others to give you donations. That’s not something that happens easily.

Do you have a history of fundraising (even in government) or campaigning or fundraising for schools or other nonprofit organizations? If so, you know how challenging it can be to get people to give money. You’re asking people to donate their money willingly and generously — and will likely be doing it over and over and over again.

What to include in your nonprofit business plan: How do you plan to solicit donations – door-to- door, online, paid ads, drives and events? Get specific and note how many people need to donate how much money for you to meet your needs.

Choosing an Entity

It’s important to keep in mind that nonprofit status isn’t for everybody. You can still run a charitable business and use a different entity type to lessen some of that burden for yourself.

For instance, an LLC is a limited liability company that’s a hybrid between a for-profit and nonprofit business. It enables you to raise money as a charity. It also allows you to get money via a revenue stream as you’re selling a product or service.

Remember, you’re an entrepreneur, even if you run a nonprofit, and your goals, vision, and mission are what makes you a great business, not your entity type. You have options and while a nonprofit might be the most obvious choice, there are other alternatives you should explore before you make that decision.

It’s also important to know that your business plan will look very very different if you choose an LLC versus a C-corp versus a B-corp. You need to understand each option before you build your business plan so that everything matches your vision and moves you forward on a path that leads you towards success.

What to include in your business plan: After deciding on an entity, list how this entity is (or isn’t) required to report incomes, how it’s legally required to spend money, and whether it has special tax requirements you need to adhere to.

Knowing what to consider, you can better decide if the nonprofit route is the best choice for your business idea. If it is, including the key details mentioned in this post will help you write a nonprofit business plan that’s ready to wow investors.

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