Non Profit Business Plan Development
- Business Plan for Investors
- Business Plan for Bank Loan
- Immigration Business Plan
- Nonprofit Business Plan
- Strategic Planning
|Obtain funding and/or tax-exempt status for a nonprofit organization|
|Project Manager; experienced writer; editor; consultants with extensive nonprofit work|
|Hundreds of successful plans for nonprofits; $400 million in fundraised capital|
In small and large ways, nonprofits make the world a better place. OGS Capital therefore pays special attention to their work with charities. The initiatives that these organizations support have manifold positive effects in the community and on the environment, and OGSCapital is dedicated to helping organizations that can, in turn, help us all.
Tax-exempt status will make your charitable organization a magnet for public and private donors
Charitable activities receive substantial support from local, state, and federal government agencies. In the United States, for example, charity organizations are tax-exempt under section 501(c)(3) of the Internal Revenue Code. Applying for tax-exempt status, which allows donors to make tax-deductible donations to the organization, requires the submission of a non profit business plan.
Show you are legitimate, worthy, and accountable
Before they will approve your organization for tax-exempt status, governmental agencies want to see that this status is being granted to a legitimate and worthy organization. In the same way, the donors that can make your dreams of social betterment a reality need to see that a plan is place and that there is responsibility and accountability. Whether you are approaching donors or governmental agencies, you’ll need to present them with a fully developed and comprehensively researched nonprofit business plan.
A non profit organization’s business plan must be exhaustively detailed: it must outline, not only the purpose of the organization and the necessity of its proposed social intervention, but also the particulars surrounding the organization’s initiatives, objectives, action plans, and budgets. Ignore any of these and you’ll be placing tax-exempt status (and the substantial funding that comes with it) out of reach.
Since 2006, OGSCapital has helped secure millions in funding for its nonprofit clients.
To ensure that you receive the status and funding you need, it is best practice to seek help writing a business plan for a non profit organization. OGSCapital, as a company with more than a decade of business plan development and consulting experience, is the foremost expert when it comes to preparing a non profit organization business plan that will satisfy the extensive requirements of tax agencies. Their one-of-a-kind, template-free, customized business plans for nonprofits have helped hundreds of charities receive tax-exempt status.
A long and global track record of success
OGSCapital has prepared successful business plans covering a wide range of nonprofit activities including education, health care, sport, green technologies, and many others. Our expertise is global: we have helped charities in the US, Africa, Europe, and Asia, including markets ranging from highly developed to emerging (and everything in between). The result of this work speaks for itself: more than $400m in attracted funding for our clients.
If you’re considering preparing a business plan for your nonprofit organization, let OGS Capital save you time and money. By outsourcing the preparation of your business plan to the professionals, you’ll significantly improve your chances of success.
Every Nonprofit Needs a Business Plan
Every day, thousands of nonprofits are started because one or more people have decided that helping others improve the quality of their lives in some way is the path well chosen. Starting a nonprofit gives entrepreneurs the opportunity to use and strengthen business skills, and to satisfy the desire to give back to the local, national, or global community. Once legally established as a business in some form, the next step is applying to the IRS or appropriate agency in the country of operation for tax-exempt status as a charity.
There are two main benefits to getting charitable status.
- Exemption from federal income tax
- Eligibility to accept charitable contributions that are tax-deductible
In addition to the ultimate goal of giving back to the community, people who start nonprofits do so for any of a number of specific reasons. The various nonprofit business plans show they provide charitable services and/or products that:
- Offer food services, including delivering food to the hungry or elderly, and operating food banks
- Provide residential facility and care for orphans and/or adoption services
- Improve health and wellness of various populations by forming and offering physical and mental health programs
- Offer programs concerning public safety
- Offer emergency food, financial assistance, and clothing
- Provide housing or other support services to patients and their families dealing with long-term treatments for serious illnesses
- Establish youth improvement groups
- Improve the environment
- Offer assistance with overcoming drug and/or alcohol addiction
- Address poverty
- Provide job training or skills improvement programs
- Establish and manage religious enterprises
- Foster youth sports
- Address cruelty to animals or wildlife preservation
- Address the prevention of child abuse
- Offer shelter for people in distress, i.e. domestic violence victims, teenagers living on the streets, homeless veterans, etc.
- Provide educational opportunities, i.e. STEM programs for school-age children, language learning programs, ESL workshops
- Offer scholarships for higher education opportunities or workshops
- Establish literary enterprises
- Erect and/or maintain public buildings, historical venues, or monuments
- Promote appreciation for the arts
- Train and educate people interested in art, writing, and performing
- Create and maintain libraries
- Perform scientific research
- Assist migrants and refugees
- Lessen neighborhood tensions
- Establish faith-based organizations which includes places of worship, administrative groups, missions, etc.
This is just a sample of the types of nonprofit organizations established around the world, but it shows the enormous variety of services and products that nonprofits offer. In the U.S., most nonprofits seeking tax exempt status will need to meet section 501(c)3 of the Internal Revenue Code. One of the reasons it is important to utilize expert consultants, like OGS Capital consultants, when writing a nonprofit organization business plan is due to the fact the Internal Revenue Service (IRS) has a lot of leeway when deciding whether a nonprofit proposal meets the code. There are other tax exempt statuses also, like the 501(c)4 for social welfare organizations. All applications for these two types of nonprofits need business plans for nonprofits.
Tax laws can be confusing. For example, there is a fine line between the charitable 501(c)3 and the social welfare organization 501(c)4. Even the IRS admits the difference between a charitable operation and a social welfare organization is murky. A 501(c)3 can do 501(c)4 activities. The business plan nonprofit information must be carefully written to ensure the new charity enterprise qualifies for the tax exempt privileges that accompany the desired status.
Comparing Nonprofit to Profit-Making Enterprise
The other issue is separating a nonprofit from a profit-making enterprise. That can also involve a fine line. You can operate a charitable operation and get paid as an employee, but there are restrictions as to who can benefit from the operations. For example, the IRS code says a charitable 501(c)3 may not be "organized or operated for the benefit of private interests, and no part of a section 501(c)3 organization's net earnings may inure to the benefit of any private shareholder or individual." It is important for nonprofit business plans to tell the IRS how net revenues are used.
Other countries have similar laws and regulations which are designed to protect people who donate to charities and to prevent tax fraud. Though our consultants are not tax advisors, OGS Capital has carefully developed expert tax law knowledge in the countries where it has offices in order to ensure the business plan non profit information supports a legal nonprofit status. Our consultants have access to a network of professionals who can provide necessary tax advice for non profit business plan development.
Establishing legitimacy, worthiness, transparency, and accountability is critical to getting government approval for status as a nonprofit. Business plans for nonprofits play a crucial role in documenting these qualities.
Generally speaking, a nonprofit:
- Cannot benefit a particular person, including the founder, the founder's family, or anyone who has too much influence over the charity's operations
- Does not have shareholders who "own" pieces of the business so are unable to benefit from the decisions they make as a matter of self-interest
- Does not operate for the purpose of generating profit that is distributed to the charity's owners or shareholders
- Does not operate for the sole purpose of conducting business that is not related to the charity's mission and exempt purpose
- Cannot participate in political activities at the local, state, or federal level
- Cannot allow earnings to inure to the benefit of an individual involved in the nonprofit, shareholder, or anyone else who is involved with the nonprofit
A profit making enterprise produces excess revenue over expenses that is distributed to shareholders – the people who own the company. A nonprofit can have net earnings, but those earnings are used for the benefit of the nonprofit. Business plans for nonprofits address these types of issues.
Why Does a Nonprofit Need a Business Plan?
A nonprofit enterprise is a business, even if doing charity work, and needs a business plan non profit focused. There are many reasons a nonprofit needs one or more non profit business plans over the life of operations.
- Identify the mission of the charity, including creating a mission statement that specifically conveys the reason the charity exists
- Obtain tax exempt status through submission of application forms, supported by the nonprofit business plan, to the appropriate government agency
- Attract and convince people, foundations, and grant making enterprises most likely to donate or grant money to the charity for operations, or for specific projects or initiatives
- Recruit people with the right knowledge and business expertise to join the Board of Directors
- Keep the charity on track to fulfill its mission
- Support a loan application
The non profit business plan is an important document that should be regularly referred to and revised periodically as the enterprise matures. It is not a one-time static document but rather a living document that should be periodically revised to reflect organizational growth. Successful nonprofits will expand their sources of revenues and their operations as they get more established and discover new needs in their focus area. At that point, they create new business plans for nonprofits.
Nonprofits need to identify what they want to achieve because it identifies where the charity is headed and what it will take to reach a particular destination. It is a process that leads to the identification of the nonprofit's mission, objectives, strategies, and actions to promote success within a specific time frame. The information is then presented in an organized manner in the non profit organization business plan.
The process also identifies the various risks that may prevent the charity from fulfilling its mission or meeting goals. Every enterprise today operates in a dynamic and volatile environment, making it more challenging to determine outcomes. During formation of business plans for nonprofits, there are a number of risks nonprofits need to consider in order to protect themselves from the threats that can prevent the enterprise's survival. The business plan for nonprofit includes:
- Financial risks – risk the nonprofit will not collect enough donations to fund operations; risk of overcommitting on projects or initiatives; risk of not having enough cash set aside in a contingency fund; risk of being unable to continue programs or initiatives after grant funding ends; lack of adequate insurance coverage
- Compliance risks – risk of changing legislative and regulatory requirements that place a burden on the nonprofit, requiring new compliance efforts
- International risks – nonprofits operating in foreign countries must consider risks like failing to understand cultural norms, unstable governments, and lack of communication and transportation infrastructures
- Operational risks – risk of overspending, staff inadequacies in terms of expertise, and unforeseen events like supplier difficulties; risk of taking on projects outside of the mission, creating a strain on operations; risk of being unable to serve clients as desired due to internal problems
- Strategic risks – risk of events occurring that make it difficult to meet goals, such as unanticipated needs of targeted population; risk of making poor strategic decisions concerning a new venture, capacity building, or collaborations; risk of over committing staff and resources to achieve an unrealistic end result
- Management risks – risk associated with poor decision-making by founders, executives, and managers who lack leadership skills; risk of poor financial management when the desire to fulfill the mission is not balanced against available resources; lack of understanding or consideration of risks and their potential consequences; risk of forming a Board of Directors consisting of members with inadequate knowledge of nonprofit management
Nonprofits have other challenges to overcome that funders want addressed in the business plan for nonprofit. For example, measuring results is not always easy because the core mission of a nonprofit is to give back to the community. How does a nonprofit measure an improvement in the local environment or a reduction in occurrences of domestic violence among clients after leaving a safe haven facility?
During business planning, desired outcomes are identified within context of the risks to meeting those outcomes. Identifying appropriate measurements is important to accountability, and funders will want to know how the nonprofit intends on identifying progress or lack of progress towards reaching goals.
OGS Capital has worked with hundreds of clients starting or growing nonprofits. Consultants have broad knowledge and expertise across industries, enabling them to assist clients with addressing the many aspects of establishing, managing, and growing a nonprofit enterprise.
Strategic Planning for the Nonprofit
Strategic planning is often thought to be applicable to profit making organizations but not to nonprofits. The truth is the strategic planning cycle is applicable and critical to every enterprise of every size and stage of growth. It includes:
- Setting goals
- Identifying desired outcomes
- Designing strategies for reaching desired outcomes
- Identifying measures and targets to keep efforts on track
- Analyzing results
- Identifying ways to achieve better or new results
- Restarting a new cycle with new goals
Strategic planning cycles never end. They enable the nonprofit to envision its future and to determine how to get there. Strategic planning embraces the charity's mission, values, and culture. A strategic plan is a companion document to the non profit business plan, but there is overlap. The goal is to help the enterprise become forward thinking rather than simply responding to current events or circumstances.Nonprofit strategic and non profit business plans are roadmaps. The business plan non profit is created before startup and should be reviewed and/or amended at least annually, or more frequently, over the life of the charity in order to keep the nonprofit on track with its vision and mission. It is important to reference the non profit business plan frequently. It is used as a foundation for operations, and to obtain loans, attract funders, and educate the public on the charity's mission. The business plan for nonprofit is largely externally focused in that it considers things like markets, customers or clients, and competition, connecting everything to operational decisions and financial projections.The strategic document is a roadmap for achieving a specific set of goals within a specific timeline. It can focus on the entire enterprise's operations or a specific project or initiative, such as an annual capital fundraising effort. The strategic plan is usually an internal tool which communicates the future direction of the nonprofit to staff, donors, grant makers, and other supporters who are instrumental in helping the nonprofit meet its strategic goals. This type of document provides detailed strategies within the context of the non profit business plan. For example, a non profit business plan sets marketing goals and describes general approaches to reaching clients.The strategic plan establishes specific goals and describes action steps to reach those goals, usually within a 1-5 year period. The strategic plan is often used to raise capital for high dollar projects like a new building, equipment purchases, or a new initiative. It is also important to capacity building, setting growth goals, and identifying how targets will be reached.
Sections of Non Profit Business Plans
A non profit business plan is very similar to a business plan for a profit making enterprise. The business plan for nonprofit is a document that applies to the nonprofit at various stages of the life cycle.
- Before start-up
- During maturity as the charity grows
- During a declining stage
- During a turnaround stage
- When the charity must revise its direction in response to changing client needs or operating environment
The non profit organization business plan consists of sections that provide the information government agencies and the nonprofit need to establish, manage, and operate the nonprofit over a period of time. One of the common mistakes young nonprofit startups make when writing a nonprofit business plan is jumping into the organization's formation with minimal upfront strategizing.
It is exciting to start a nonprofit because of the charity work it does, conveying a strong sense of goodwill and the satisfaction that comes from taking action. However, a nonprofit is a business and should be treated like a business. The business plan for nonprofit helps the entrepreneur achieve this goal. No business should start without a business plan. The IRS requires a certain amount of information to accompany application for tax exempt status, and that information is presented concisely and thoroughly in a non profit business plan.
The sections non profit business plans can vary as needed to properly describe the business but typically will include the following information:
- Executive Summary – concise overview of the nonprofit's mission or reason for existence, strengths, marketing plan, assets, programs, and financing
- Legal structure – a 501(c)3 is organized as one of three forms – corporation, unincorporated association, or trust; supporting documents include Articles of Incorporation, Articles of Association, or Trust Documents
- Operating Plan – programs and services must further the exempt purposes and cannot include activities that involve politics or lobbying, conducting a trade or business not related to the exempt purposes, or benefit private interests; describe how the nonprofit will deliver its products or services; explain the systems and processes that will ensure the nonprofit can deliver its programs and services
- Marketing Plan – in this case the market is the constituencies the nonprofit will serve; explain how the targeted population will be reached, the need for the nonprofit's services, other nonprofits serving the population, and potential collaborators; include market research and a description of intended promotional efforts
- Management and Staffing Plan – describe the expertise of key management staff and board members and critical staff positions; describe how the nonprofit will recruit people with the necessary skills
- Financial Plan – every business needs to address finances which includes actual and proforma financial statements for 3-to-5 years
The federal Form 1023 application for tax exemption status requires most of the business plan nonprofit information. Each state also has requirements for nonprofit startup which include items like obtaining licenses and permits, having a physical address, and having enough money to establish the basic infrastructures. This information is included in non profit organizations business plan.
Some nonprofits do operate commercial enterprises to generate income. They may include selling products like t-shirts or other items with logos, or opening a thrift store. If this is one way the charity will raise funds, it is important to show in the non profit organizations business plan how the revenue is generated and that profits will be used to further exempt activities and not to benefit particular individuals.
Expert Consultants Help Entrepreneurs with Critical Details
A lot of research takes place before the first word of a nonprofit business plan is written. The challenge when writing a nonprofit business plan is capturing the details in the non profit organizations business plan in a way that successfully portrays the nonprofit so that anyone reading the information precisely understands what the nonprofit expects to achieve and what it needs to perform efficiently and successfully. Many startups begin operations on a small budget because they need to get up and running in order to pursue donations and grants for larger projects. The quality of the non profit organization business plan determines initial startup success. Without high quality business plan nonprofit information, it can take months to get the nonprofit approved as tax-exempt because the IRS or any other government agency will have a multitude of questions that delay the process.
OGS Capital consultants understand the nuances of the nonprofit operation and offer clients expert knowledge-based services for writing a nonprofit business plan. Their experience as entrepreneurs, executives and senior managers, professional consultants with top global consulting companies, and non profit business plan creators means they can provide clients with the highest quality services and realistic practical perspectives based on real world experience.
The basic steps to incorporation include:
- Do advance planning and choose a name
- Form a Board of Directors
- Choose a legal structure
- Obtain a Federal Employer Identification Number (EIN)
- Complete documents for filing for 501(c)3 status, which includes proof of state formation, copy of bylaws, proforma financial statements, proposed budgets for following two years, historical narrative of past activities plus description of present and future activities
- Register for Charitable Solicitation and Fundraising
The non profit organizations business plan includes this information and much more. The financial statements need a detailed breakdown of revenues and expenses. The IRS requires a certain number of years of financial projections based on how long the nonprofit has been in existence in order to make a determination of exempt status. New charities must submit financial statements for the current year and proforma statements for the next two years.
Creating a Mission Statement
Creating a mission statement for the non profit organizations business plan is not as easy as stating the passionate belief in giving back to the community. The mission statement uses as few words as possible to state the central purpose of the nonprofit. It is the guiding foundation for decision-making.
When writing a nonprofit business plan, the mission statement in the non profit organisation business plan must find balance between being narrow enough to keep the charity on track to achieve its purpose and broad enough to give the nonprofit room to maneuver in meeting its goals through growth and expansion. An effective mission statement includes the nonprofit's values which serve as the guiding force underlying the way the enterprise achieves its mission.
OGS Capital consultants understand the importance of getting the mission statement right in the non profit organisation business plan. They assist entrepreneurs with forming a mission statement that meets the following intents:
- States the charity's reason for existence
- Has a sharp focus
- Makes a compelling statement
- Supports the nonprofit's brand
- Attracts and keeps the attention of donors, and private and governmental funders
- Motivates staff at all levels of the enterprise
- Attracts the desired talent with needed skills
- Places the nonprofit within a social context (giving back to the community)
- Assures the IRS or other relevant government agency the nonprofit fits within the definition of a tax-exempt organization
Creating an effective, clear, informative mission statement in the non profit organisation business plan is challenging, so hundreds of nonprofit entrepreneurs have already relied on OGS Capital consultants for assistance. People unfamiliar with the qualities of a well written mission statement make common mistakes. When writing a nonprofit business plan, poorly written mission statements lack clarity of organizational purpose, are unnecessarily long, and/or are not appealing to the people the organization wants to attract. Other common mistakes include using terms that outsiders would not recognize and being too general.
A solid mission statement is critical to writing a solid nonprofit business plan. The statement is the foundation upon which all decision are made, from the type of people who are hired to operations to the way money is spent. This is one of the most important steps when writing a business plan for non profit.
Achieving the Mission
Once the mission statement is created, the non profit business plan sections describe how the nonprofit will fulfill its mission. The document can address startup, or can be used to describe a specific project, initiative, or venture. The non profit business plan is particularly crucial to raising money because most do not sell revenue generating products, or the products they do sell do not generate nearly enough to support the nonprofit's operations and projects.
There are exceptions, of course, like the Girl Scout annual cookie sale which provides most of the organization's revenues. If the organization operates for-profit commercial enterprises which donate all or most profits to a nonprofit, a business plan separate from the non profit organisation business plan is prepared for the profit generating operation.
The important question answered in the nonprofit business plan is this: How will the organization generate, deliver, and measure the services needed to fulfill the mission? For example, a foundation may solicit big donations which are then parceled out to other, smaller nonprofits through a grant making process. Only a small administrative office is required. A small nonprofit that feeds the homeless each week needs a facility for cooking the food, and a means of getting the food to its clientele.
There is an unlimited variety of nonprofits in operation today. They may provide health services, job training, youth programs, support groups, products that improve the quality of life for people with special needs, education programs, special needs services, literacy programs, drug addiction counseling, and so much more. The non profit organization business plan must precisely explain the:
- Who - Who will manage the nonprofit? What are the qualifications of the nonprofit founder and key management staff? Who are the board members, and what makes each one a valuable addition to the board. Who will have what responsibilities? What are the staffing needs? Also, will the nonprofit depend on volunteers?
- What – What will the nonprofit offer as services and/or products to its clients? What market is targeted? What makes the nonprofit's offerings beneficial to the people it intends to serve? What are the market trends? What communication channels are needed? What are the future plans for growth? What new services and products are will have eventual launch? What collaborations are already in place or will be cultivated?
- When – When will the nonprofit be fully operating? When will the nonprofit need to add staffing? When will the nonprofit pursue new projects or initiatives?
- Where – Where will the nonprofit offers its services? Options include at a facility owned or leased by the nonprofit, on the streets, and in homes. There are nonprofits offering food to the homeless served out of vans and online downloadable free education programs. Nonprofits operate in a variety of innovative places.
- How – How will the marketing efforts reach the people the nonprofit will serve? How will the services or products be delivered? How will products be sourced? How will the nonprofit generate cash? How will the nonprofit find enough capital to fund required assets needed to be fully functioning? How were the income statement, balance sheet, cash flow statement, and budgets built? How will the nonprofit generate in-kind support?
Having a passion to give back to the community is an important motivator, but it is not enough to support starting a nonprofit. A nonprofit is a business, and that is why the information in the business plan non profit is required to get IRS approval for tax exempt status. However, the non profit organisation business plan is also needed because every profit and nonprofit business needs to do in-depth market research, have the financial knowledge required to succeed, and create staffing, marketing, and operating plans.
More Than a Good Idea
A common mistake some people make is thinking a nonprofit does not generate profit. Successful nonprofits have retained earnings that are used to fund equipment, facilities, repairs, projects, growth in the client base, and so on. The difference is that a nonprofit does not use its profits to benefit any particular individual. The profits are used to fund the nonprofit. Without adequate cash on hand, the nonprofit is at risk of not being able to cover payroll when donations decline in a particular month or not being able to cover operating expenses.
OGS Capital offers clients a wealth of business knowledge when writing a business plan for non profit. It is the knowledge needed to write high quality business plan nonprofit information that brings results and serves as a roadmap for success. Having a good idea is simply not enough in today's complex world. Nonprofits have many of the same issues as for-profit enterprises.
- What is the value proposition?
- How will revenue be generated?
- What market research is needed?
- Who are the competitors?
- How will the organization recruit staff with the right skills?
- What is the marketing plan?
- How will the organization communicate its availability to targeted clients?
- What are the organization's goals?
- What success strategies were identified?
These are just a few of the similarities between a nonprofit and a profit making organization.
Benefits of OGS Consulting Services
Raising capital for operations is just as critical for a nonprofit as it is for a business generating profits. The non profit business plan is a key document for startup, getting tax exempt status, and having a roadmap for success. OGS Capital brings a set of advantages to each client for an affordable price while delivering a high quality document when writing a business plan for non profit.
Many non profit organization business plan writing services use templates which fail to capture the uniqueness of the nonprofit. OGS Capital only produces customized nonprofit business plans. Conveying the uniqueness is critical to attracting operational and project funders for long-term success.
Following are some of the advantages OGS Capital consultants offer nonprofit clients when assisting with nonprofit business plans:
- Relevant knowledge about the nonprofit industry
- Experience in more than 40 industries, giving them a unique perspective that is critical to creating quality non profit business plans
- Ability to identify opportunities the nonprofit entrepreneur has overlooked
- Unbiased consulting that help clients establish or grow their nonprofits with realistic expectations
- Process that is efficient, realistic, thorough, and consistent with the mission
- The knowledge and expertise that nonprofit founders and managers lack for developing a high quality non profit business plan
- Affordable pricing for the highest quality product
- Customized business plan non profit development
- Access to a network of business professionals
- Access to a network of funders
- Proven fund raising success
- Experience in more than 30 markets around the world
- Completed business plan nonprofit information available in approximately 10 days
OGS Capital consultants know and utilize best practices during nonprofit business plan development and strategic planning. Using professional consultants is a good decision when writing a business plan for non profit because they can help the entrepreneur get the nonprofit started as quickly as possible on a solid foundation, and shorten the time it takes to get tax-exempt status, build capacity, or initiate a new project.
Contact OGS Capital Today
Starting a nonprofit is a major decision, but the process is greatly simplified by contacting OGS Capital when ready to start writing a business plan for non profit. Complete the online contact form at your earliest convenience or call us to discuss options for nonprofit business plans. We are available 24 hours a day, 7 days a week and look forward to assisting you as you strive to give back to the community.Download Sample From Here
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