Creating your nonprofit business plan

by Urban Views RVA January 30, 2019

Part three of a three-part series

Does a nonprofit need a business plan? The answer is “yes.” With this column we share guidance from Bridget Ciaramitaro, experienced nonprofit planner, so you can get to work planning for the business success of your nonprofit.

First, we asked Ciaramitaro, “what is a business plan for a nonprofit?”

“A business plan builds upon the strategic plan. In some ways, the business plan determines the feasibility of implementing the strategic plan. I’ve heard it said that a strategic plan is a wish list without a business plan. This plan includes the vision, mission and values of the organization, and the strategic goals and objectives. It includes the program model for the organization answering the question ‘why do we do what we do?’ The program model aids in determining what needs to be done in order for the organization’s program(s) to be successful. This includes determining if all the program activities actually support the program model. This is an opportunity for the nonprofit to determine if there has been mission drift.”

Questions to ask during this time include: “Are some programs or activities being offered simply because at one time there was a funding stream? Are programs really making a difference in the lives of the people being served?”

Ciaramitaro continued, “The business plan addresses organizational needs for the next three to five years. Is there a facility need? Does the organization have debt that needs to be paid off? Has the organization been running a deficit? What needs to be funded in order to increase program effectiveness or serve more people? What is a unit of service for the organization? What is the cost of a unit of service now? How will that change future forward? With a three to five year planning budget in place, what are the sources of funds for making this budget doable? These and many other questions will lead the nonprofit in determining a business model and affirming a core business.”

“A core business might be defined as the one thing the organization does that defines why they are needed. It is the reason for their existence. The business model determines how this core business will be funded thus the importance of researching, identifying and pursuing the source of funds needed to implement the budget.”

She asks the hard questions that require work to answer. Don’t be intimidated, just get to work.

Ciaramitaro explained that business planning requires an organization to know its vision, mission and strategic goals and its current financial position well beyond the profit and loss statement. She encourages use of an outside consultant who is willing to ask hard questions to lead the process, but warns “the consultant cannot ‘write the plan’ for the organization. Strategic business planning is a process that involves the people served, the board, staff, and other stakeholders.”

Share these columns within your organization and get ready to plan. Bridget Ciaramitaro is the president of Ciaramitaro & Associates, LLC. Reach her at bridgetciaramitaro@att.net or via LinkedIn.