Business plans for nonprofit
Organizations: What To Consider

Having a business plan is just as important (if not more important) for nonprofit organizations as it is for profit-generating companies. Like their corporate counterparts, nonprofit organizations need a business plan as a means of formalizing their strategy and carving out a roadmap. Nonprofits, however, have their own unique set of requirements and concerns to take into account.

Are you planning to launch a nonprofit organization? If so, here are a few things you need to consider before you open.


The Nonprofit

According to the National Center for Charitable Statistics, more than 1.5 million nonprofit organizations are registered in the U.S. Though nonprofits do not compete with one another in the traditional sense, such organizations must still create a nonprofit business plan as to why Americans should donate to their cause and why government agencies should award them grants.

In other words, competition is fierce in the nonprofit space. Relying entirely on acts of benevolence from outsiders is not without its risks. In fact, the amount of money that nonprofits raise in a year is highly correlated to the health of the economy. If you plan to start a nonprofit organization, ensure that your business plan includes strategies to deal with economic downturns.

Revenue through Sales

Some nonprofit organizations generate additional revenue by selling goods or services the same way a traditional business does. Girl Scouts, for example, sell cookies, while some animal shelters sell calendars. Diversifying your nonprofit’s revenue streams can help lower its risk, as it will not rely solely on one source for its funding.

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and Accountability


In recent years, there has been a growing awareness about “scam charities.” More donors are demanding transparency and accountability from organizations before they sign any checks. In addition, sites like Charity Navigator evaluate charities in the United States, providing free ratings of their financial health, accountability, and transparency. If you want your nonprofit to be taken seriously, ensure that transparency and accountability are goals in your business plan on which the organization cannot compromise.

and Paperwork

Keeping your organization transparent and the people in it accountable requires lots of recordkeeping and paperwork. Though you would most likely rather spend your time providing the services to which your organization is dedicated – whether it is feeding the homeless or raising awareness about water conservation – you may be surprised at how much time is spent on mundane administrative tasks. Things like applying to be a 501 (c) (3) nonprofit organization under the Internal Revenue Code, publishing your 990 tax return forms on your website, and acquiring a Better Business Bureau accredited charity seal are time-consuming tasks, but important ones, nonetheless. So, when you’re ready to launch your nonprofit, ensure that your business plan includes strategies for dealing with the large amount of paperwork your organization will face.

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