Know the Key Differences When Creating Your Non-Profit Business Plan
As a business plan consultant for non-profit and for-profit startups, I find that non-profit founders, like for-profit entrepreneurs, seek experienced help crafting their business plans. They see the value in strengthening their strategies for fundraising, board development, operations, and marketing before presenting to partners and funders. As an aspiring non-profit founder, you must understand four critical differences between for-profit and non-profit plans.
1. Your non-profit must sell to TWO separate markets
One market is your customers/clients/constituents who receive services; the second is your organization’s funders and funding partners. These are generally two very separate groups (those in need and those with the means to give), each requiring a distinct marketing strategy to reach them. While flyers and a good street presence may be all that is needed to reach your clients, an internet presence and networking may be necessary to reach your funders. The first marketing strategy is generally covered in a ‘Marketing Plan’ section and the second in a ‘Fundraising Plan’ section.
2. Your non-profit plan must include ‘Outcomes and Evaluation’
Your non-profit’s results are much more difficult to measure and explain than a for-profit company’s. Growth in the size of your budget is less relevant than the extent to which your organization fulfills its charitable mission. Your challenge is to find specific, quantifiable ways to measure this mission fulfillment through related indicators. For example, a charter school may seek to increase its students’ eventual college enrollment rates but must settle for measuring improvements in test scores for many years until it graduates its first class. Your non-profit plan must demonstrate the key metrics and specific target numbers (‘Outcomes’), as well as the techniques for when and how those metrics will be measured (‘Evaluation’). This section of the plan will be in addition to a complete financial rundown.
3. Increased importance of your Board
Your non-profit’s Board of Directors is not only an advisory body but a group legally responsible for the activities of the non-profit. Therefore, your plan must show that the organization either has a diverse, skilled, independent, and well-connected Board or that you have a specific plan for developing one. The early recruitment of qualified and active Board members can also provide invaluable feedback on the plan itself.
4. Your non-profit business plan will need customization for each audience
Foundations and government agencies have specific proposal templates and application forms, requiring you to customize your non-profit’s basic business plan. For-profit funders, on the other hand, will often accept the standard format business plan. This doesn’t mean it isn’t essential to create a solid and well-structured non-profit plan – it just means that you must be prepared to cut, paste, and revise pieces of that plan to meet each funder’s requirements.
Remember to launch your non-profit with the seriousness of a business while understanding how your plan must differ from that of a business. If you do, your chances of success will improve significantly.