You have a mission. What you need next when starting a nonprofit is a plan that convinces funders, attracts board members, and keeps your team pointed in the same direction. That’s what a nonprofit business plan does, and this guide walks you through how to build one.
Here, we’ll explore:
- Why a business plan is so important
- The components of a business plan
- How to write a business plan for a nonprofit
We also have a few great examples and a free nonprofit business plan template.
Let’s get planning!
What Is a Nonprofit Business Plan?
A nonprofit business plan is the roadmap to your organization’s future. It lays out where your nonprofit currently stands in terms of organizational structure, finances, and programs. Most importantly, it highlights your goals and how you aim to achieve them!
These goals should be reachable within the next 3–5 years — and flexible. Your nonprofit business plan is a living document; update it as priorities shift.
Your plan should remind you and your supporters what your organization stands for.
This document can be as short as one page if you’re just starting out, or much longer as your organization grows. As long as you have all the core elements of a business plan (which we’ll get into below!), you’re golden.
Nonprofit vs. For-Profit Business Plan: What’s Different?
At first glance, a nonprofit business plan can look a lot like a for-profit business plan. Both explain what an organization does, who it serves, how it operates, and how it plans to grow. But the goals—and some financial considerations—differ.
A for-profit business ultimately focuses on generating profits for its owners or shareholders. A nonprofit focuses on advancing its mission and creating measurable community impact. If your organization is pursuing 501(c)(3) status, your business plan should make that mission clear and show how your programs and activities support it.
Here are a few key differences to keep in mind:
- Mission comes first. A nonprofit business plan should clearly connect its mission statement, programs, and goals.
- Impact matters as much as income. Along with financial goals, include an impact plan that explains what you hope to accomplish for the people or communities you serve and how you’ll measure progress.
- The funding model is different. Instead of relying primarily on sales, a nonprofit may combine donations, grants, sponsorships, membership dues, program fees, and other revenue to explain where funding will come from and demonstrate how you’ll build sustainable support.
- Governance plays a larger role. Nonprofits typically have a board of directors responsible for governance and oversight. Your plan should briefly explain the board’s role and how responsibilities will be divided.
- Financial reporting includes nonprofit-specific information. In addition to a nonprofit budget, you may eventually need to track financial statements such as the statement of activities, statement of financial position, and statement of functional expenses. If you’re a tax-exempt organization, your reporting obligations may also include IRS Form 990.
- Success isn’t measured by profit alone. A strong nonprofit plan can include traditional financial goals—such as reaching a break-even point or building cash reserves—but it should also identify outcomes that demonstrate mission success.
Why Your Nonprofit Needs a Business Plan
A nonprofit business plan isn’t required, but it pays off.
Let’s explore the five major benefits of writing a business plan:
- Secure funding and grants
- Solidify your mission
- Set goals and milestones
- Attract a board and volunteers
- Research and find opportunities
Secure Funding and Grants
Did you know that businesses with a plan are far more likely to get funding than those that don’t have a plan? It’s true!
When donors, investors, foundations, granting bodies, and volunteers see that you have a clear plan, they’re more likely to trust you with their time and money. Plus, as you achieve the goals laid out in your plan, that trust will only grow.
Solidify Your Mission
To sell your mission, you have to know what it is. When you’re early-stage and pulled in multiple directions, writing it down forces clarity.
Writing your business plan pushes you to express your mission as clearly as possible. As the years go on and new opportunities and ideas arise, your business plan will guide you back to your original mission.
From there, you can figure out if you’ve lost the plot—or if it’s time to change the mission itself!
Set Goals and Milestones
The first step in achieving your goals is knowing exactly what they are. By highlighting your goals for the next 3-5 years—and naming their key milestones!—you can consistently check if you’re on track.
Nonprofit work is hard, and there will be moments where you wonder if it’s working. A business plan gives you a record of what you set out to do, and what you’ve actually accomplished.
Attract a Board and Volunteers
Getting volunteers and filling nonprofit board positions is essential to building out your organization’s team. As we said before, a business plan builds trust and shows that your organization is legitimate. In fact, some boards of directors require a business plan for an organization to run!
Unfortunately, many volunteers get taken advantage of. With a business plan in place, you can show that you’re coming from a place of professionalism.
Research and Find Opportunities
Writing a business plan requires some research!
Along the way, you’ll likely dig into information like:
- Who your ideal donor might be
- Where to find potential partners
- Who your competition is for donors
- Which grants are available for your organization
- What is the best business model for a nonprofit like yours
With this information in place, not only will you have a better nonprofit business model created—you’ll also have a more stable organization!
Free Nonprofit Business Plan Template
Here’s a free nonprofit business plan template to get you started. Add sections as your organization grows; this covers the essentials.
Feel free to add anything else you think might be important—but this will make sure you have the basics covered!
Email*
First name
The Parts of a Nonprofit Business Plan
Now that you know what a business plan can do for your organization, let’s talk about what it actually contains!
To start, make sure your business plan follows formatting best practices. After all, it’ll be available to your team, donors, board of directors, funding bodies, and more!
Your nonprofit business plan should:
- Be consistent formatted
- Have standard margins
- Use a good-sized font
- Keep the document to the point
- Include a page break after each section
- Be proofread
Here are the essential sections of a business plan:
- Executive Summary: This is your nonprofit’s story—it’ll include your goals, as well as your mission, vision, and values.
- Products, programs, and services: This is where you show exactly what it is you’re doing. Highlight the programs and services you offer, and how they will benefit your community.
- Operations: This section describes your team, partnerships, and all activities and requirements your day-to-day operations will include.
- Marketing: Your marketing plan will cover your market, market analyses, and specific plans for how you will carry out your business plan with the public.
- Finances: This section covers an overview of your financial operations. It will include documents like your financial projections, fundraising plan, grants, and more.
- Appendix: Attach any additional useful information here.
We’ll get into these sections in more detail below!
How to Write a Nonprofit Business Plan in 12 Steps
Feeling ready to put your plan into action? Here’s how to write a nonprofit business plan in 12 steps.
Your business plan will be available for a whole bunch of people, including:
- Granting bodies
- Loan providers
- Prospective and current board members
- Donors
- Volunteers
Each audience comes from different backgrounds and reads your business plan for different reasons. If you keep your nonprofit business plan accessible (minimal acronyms and industry jargon), you’ll be more likely to reach everyone.
If you’d like, you can create a one-page business plan AND a more detailed one. Then, you can provide the one that feels most useful to each audience!
1. Research Your Market and Community Need
Take a look at what’s going on in your corner of the nonprofit sector. After all, you’re not the first organization to write a business plan!
Research:
- How your competitors’ business plans are structured
- What your beneficiaries are asking for
- Potential partners you’d like to reach
- Your target donors
- What information granting bodies and loan providers require
This information will show you which parts of your business plan need extra attention. Send donor surveys, contact financial institutions, and connect with your beneficiaries to get your research started.
If you’re just getting started, this can help you name your nonprofit something relevant, eye-catching, and unique!
2. Write Your Mission and Vision Statement
Your mission statement defines how your organization aims to make a difference in the world. In one sentence, lay out why your nonprofit exists.
Here are a few examples of nonprofit mission statements:
- Watts of Love is a global solar lighting nonprofit that gives people the power to lift themselves out of the darkness of poverty.
- CoachArt creates a transformative arts and athletics community for families impacted by childhood chronic illness.
- The Trevor Project fights to end suicide among lesbian, gay, bisexual, transgender, queer, and questioning young people.
In a single sentence, each of these nonprofits defines what their organization does and who their work reaches. Offering this information at a glance is how you hook readers immediately!
3. Describe Your Nonprofit and Its Activities
Now that your mission is laid out, show a little bit more about who you are and how you aim to carry out your mission. Expanding your mission statement to include your vision and values is a great way to start!
Use this section to highlight:
- Your ideal vision for your community
- The guiding philosophy and values of your organization
- The purpose you were established to achieve
Don’t worry too much about the specifics here—we’ll get into those below! This description is simply meant to demonstrate the heart of your organization.
4. Outline Management, Governance, and Your Board
Use this section to give readers an understanding of how decisions get made and what your organization needs to operate effectively.
This will include information such as:
- Team members: Introduce executive leadership, staff, key volunteers, and your board of directors.
- Organizational structure: Explain how your nonprofit is organized and who reports to whom. A simple org chart can be helpful if you have several staff members or departments.
- Type of nonprofit: Describe the specific type of nonprofit you’re running and your legal or tax-exempt status, such as a 501(c)(3) charitable organization.
- Board governance: Explain the board’s role in governance, oversight, fundraising, and strategic direction. You can also mention the board’s size, committees, and areas of expertise.
- Location and facilities: Include where your organization operates and any facilities or other physical resources you need to deliver your programs.
- Staffing needs: If you’re planning to hire, explain which positions you’ll need, when you’ll need them, and how those roles will support your growth.
If you’re already established, add a section on how you got started. This is your opportunity to tell your origin story, explain how the organization has grown, and highlight the nonprofit talent you’ve brought on over the years.
Don’t be afraid to include a little personality here. Your management and governance section isn’t just a list of job titles. Use it to show why your team is equipped to execute the mission. If you’re a newer nonprofit with a small staff or an all-volunteer team, that’s OK, too. Be honest about your current capacity and explain how you plan to build it over time.
5. Describe Your Programs, Products, and Services
This information will have its own section in your nonprofit business plan—and for good reason!
It gives readers vital information about how you operate, including:
- The specifics of the work you do
- How that work helps your beneficiaries
- The resources that support the work (partnerships, facilities, volunteers, etc.)
- If you have a membership base or a subscription business model
Above all, highlight what needs your nonprofit meets and how it plans to continue meeting those needs. Really get into the details here! Emphasize the work of every program, and if you’re already established, note the real impact you’ve made.
Try including pictures and graphic design elements so people can feel your impact even if they’re simply skimming.
6. Conduct a SWOT Analysis and Needs Assessment
Before you start setting ambitious goals, take a step back and look honestly at where your nonprofit is today. Two useful tools are a SWOT analysis and a needs assessment.
A SWOT analysis helps you look internally at your organization’s strengths and weaknesses and externally at the opportunities and threats you may face.
For example, your SWOT analysis might identify:
- Strengths: A strong reputation in the community, experienced board members, or an established donor base
- Weaknesses: Limited staff, inconsistent fundraising, or outdated technology
- Opportunities: New grant opportunities, potential partnerships, or growing interest in your cause
- Threats: Increased competition for grants, economic uncertainty, or changes in the needs of the people you serve
A needs assessment looks more closely at the problem your nonprofit is trying to address. What does your community actually need? Who is affected? What services already exist? Where are the gaps?
Tip: Community surveys, government statistics, research studies, program data, interviews, and feedback from the people you serve can all help you build a stronger case.
Together, these exercises can help you avoid building your business plan around assumptions. They also give you a more realistic starting point for your impact plan, fundraising plan, and financial projections.
7. Write Your Marketing and Outreach Plan
Having a nonprofit marketing plan is essential to making sure your mission reaches people—and that’s especially true for your business plan.
If your nonprofit is already up and running, detail the work you’re currently doing, as well as the specific results you’ve seen so far. If you’re new, you’ll mostly be working with projections—so make sure your data is sound!
Your Marketing and Outreach section should include:
- Beneficiary information
- Information on your target audience/donor base
- Information on your competitors
- Names of potential partners
Note any market analyses and tests you’ve run. Also document any outreach and campaigns you’ve run, along with the outcomes.
Finally, list all past and future marketing strategies you’re planning. This can include promotion, advertising, online marketing plans, and more.
8. Create a Logistics and Operations Plan
This section of your business plan will take the organizational information you’ve gathered so far and add detail. Highlight what the day-to-day will look like for your nonprofit, and how your funds and resources will make it possible.
Be sure to make note of:
- The titles and responsibilities of your core team
- The partners and suppliers you work with
- Insurance you will need
- Necessary licenses or certifications you’ll maintain
- The cost of services and programs
This is the what and how of your business plan. Be specific. Show exactly how you’ll accomplish the goals you’ve outlined.
9. Build Your Financial Plan and Budget
One of the main reasons people want to know how to write a nonprofit business plan is that it’s essential for securing funding. Loan providers, donors, and granting bodies will want to see your numbers—and that’s where your Financial Plan comes in.
This plan should clearly lay out where your money is coming from and where it will go. If you’re just getting started, look at what similar nonprofits are doing to set realistic numbers. Even if you’re starting a nonprofit on a tight budget, every bit of financial information counts!
First, map out your projected (or actual) nonprofit revenue streams, such as:
- Expected membership contributions
- Significant donations
- Grants
- In-kind support
- Fundraising plan
Then, do the same with your expenses:
- Startup costs
- Salaries
- Insurance
- Typical bills
- Web hosting
- Membership management software
- Subscription
- Costs of programs
If your nonprofit is already up and running, include your past accounting information. Otherwise, keep working with those grounded projections!
To make sure you have all of your information set, include documents like:
- Income statement
- Cash flow statement
- Balance sheet
Together, these documents show that your nonprofit can stay financially afloat. Highlighting that you can comfortably cover your operational costs is essential. Plus, building this plan can help your team identify funding gaps or opportunities.
10. Write Your Impact Plan and Define Your KPIs
Your nonprofit isn’t in business to generate revenue. You’re here to create an impact. Your impact plan explains what you hope to accomplish, who you want to help, and how you’ll know whether your work is making a difference.
Start by connecting your goals back to your mission statement. Then work backward from the change you want to create. This is where key performance indicators (KPIs) are a valuable tool. KPIs are specific measurements you can use to track progress toward your goals.
Your nonprofit KPIs might measure:
- Program participation: Number of registrations, attendance, or program completions
- Outcomes: Employment placements, graduation rates, improved skills, or other changes related to your mission
- Community impact: Changes in the broader issue you’re addressing
- Fundraising: Donor retention, dollars raised, average gift, or fundraising growth
- Financial health: Revenue, expenses, cash reserves, or the percentage of revenue coming from different funding sources
- Engagement: Volunteer hours, member participation, event attendance, or recurring donors
Try to choose KPIs that tell you something useful—not simply numbers that are easy to collect. If your mission is to improve educational outcomes, for example, counting the number of newsletters you send isn’t necessarily a meaningful measure of impact.
Your KPIs can also help connect the rest of your business plan. Your fundraising plan should provide the resources needed to achieve your impact goals, your nonprofit budget should account for the cost of delivering those programs, and your board of directors can use your KPIs to monitor progress.
Start with the measures that will genuinely help you understand whether you’re moving toward your mission. As your nonprofit grows and your data improves, you can refine them.
11. Write Your Executive Summary
Your Executive Summary sits at the top of your business plan and is often the only section some readers will read closely. Make it count.
Your Executive Summary should include:
- Your mission, vision, and values
- Your goals (and their timelines!)
- Your organization’s history
- Your primary programs, products and services
- Your financing plan
- How you intend to use your funding
This section will summarize the basics of everything else in your plan. While it comes first in your plan, we suggest writing it last! That way, you’ll already have the information on hand.
You can also tailor your Executive Summary to your audience. For example, if you’re sending your nonprofit business plan to a loan provider, you can really focus on where the money will be going. If you’re trying to recruit a new board member, highlight goals and impact instead.
12. Compile Your Appendix (IRS Letter, Form 990, Board Bios)
Use the appendix for any extra information that will be useful to readers.
This could be documents such as:
- Academic papers about your beneficiaries
- Publications on your nonprofit’s previous success
- Form 990 documentation
- Board member bios
- Organizational flow chart
- Your IRS status letter
Make sure your additions contribute to your nonprofit’s story!
Nonprofit Business Plan Examples
Here are two great examples of nonprofit business plans. Notice how they’re different depending on the size of the organization!
Small Nonprofit Example (Membership / Co-op Model)
This sample nonprofit business plan shows what a basic plan could look like for a hobbyists’ co-op. If your nonprofit is smaller and more local, this is a great reference!
What we like:
- Details on running a basic membership model
- Emphasis on what it means to be a sustainable cooperative
- A list of early milestones, such as hitting their 100th member
- Clarification that all recordings will be legal
Larger Nonprofit Example (Programs & Services)
This sample nonprofit business plan is for a much larger organization. Instead of focusing on the details of a membership model, it gets deeper into programs and services provided.
What we like:
- The mission is broken down by values
- A detailed look at what each program provides
- A thorough sales plan
- Key assumptions are included for the financial plan
Tips for Formatting Your Nonprofit Business Plan
Writing a business plan can feel like a big project, but the format doesn’t have to be complicated. The goal is to create a document that’s easy to understand, easy to update, and useful to the people who will actually use it.
If you’re not sure what the finished product should look like, looking at a nonprofit business plan example can help you see how these pieces fit together. Remember, there’s no single required format. A small grassroots organization may need a much shorter plan than a large nonprofit with multiple programs, employees, and revenue streams.
Most importantly, don’t try to make your plan perfect before you use it. Your first version is a starting point. As your organization learns more through fundraising, programs, a needs assessment, and conversations with the community, you can update your assumptions and goals. A useful business plan should grow with your nonprofit.
Frequently Asked Questions (FAQs)
How long should a nonprofit business plan be?
Most nonprofit business plans are about 7–30 pages, depending on the organization’s size, complexity, and mission. Aim for enough information to explain your mission statement clearly, needs assessment, programs, fundraising plan, impact plan, and financial outlook without adding unnecessary detail.
How is a nonprofit business plan different from a for-profit one?
Both types of business plans explain an organization’s goals, operations, and financial outlook. The main difference is that a nonprofit business plan revolves around mission and impact, rather than profit for shareholders. It should connect your mission statement to your programs, fundraising plan, and impact goals.
Does the IRS require a business plan for 501(c)(3) status?
No. The IRS does not require a formal business plan to apply for 501(c)(3) tax-exempt status. However, IRS forms ask for information about your organization’s purpose, activities, finances, and plans that overlap with many sections of a nonprofit business plan. Having a plan prepared can therefore make the application process easier and help you clearly explain how your organization will operate and advance its exempt purpose.
What are the essential sections of a nonprofit business plan?
There’s no single perfect format, but most nonprofit business plans include:
- Executive summary
- Mission statement and organization overview
- Needs assessment
- Impact plan
- Operations and governance
Do I need an attorney or consultant to write a nonprofit business plan?
You can create a business plan internally using information your nonprofit already has about the mission, programs, community needs, and finances. However, you may want an attorney or consultant brought in if you need specialized guidance (e.g., when navigating 501(c)(3) requirements).
How often should I update my nonprofit business plan?
Treat your nonprofit business plan as a living document. A good rule of thumb is to review it at least annually, ideally as part of your strategic and budgeting process. Update your mission-related goals, fundraising plan, impact plan, nonprofit budget, needs assessment, and financial projections when circumstances change. You may also want to revisit the plan after a funding change, leadership transition, or shift in community needs.
Create Your Nonprofit Business Plan With Confidence
We hope this sheds some light on how creating a nonprofit business plan can help your organization move forward! Remember: you know what you want for your organization. A business plan is a tool for turning those dreams into reality.
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