Nonprofit Business Planning and Organization
Every organization, whether for-profit or nonprofit, needs to manage its staff, set goals, market, deliver products and services, maintain budgets, and measure progress. The business rules are pretty much the same whether you’re providing meals to shut-ins or turning your mother’s cookie recipe into a million-dollar enterprise. Business fundamentals matter — no matter how lofty your mission.
Ditto for business planning. The same steps apply whether your venture is big or small, service or retail, for-profit or nonprofit. But to nonprofit organizations, certain steps require special attention.
Before launching a nonprofit organization, test your idea by asking these questions:
Is this idea something you really believe in? A driving passion isn’t the only qualification for success, but it sure helps. Having that passion helps balance the fact that most people who start, run, or work with nonprofit organizations earn less money than they would working in the private sector. What motivates them isn’t the money but doing something that they really care about.
Does the nonprofit fill a need? The process of planning is to make sure that your venture — for-profit or nonprofit — is likely to succeed. One indicator is whether it addresses a real market need.
You probably don’t think of nonprofits as competing in the same way that for-profit companies do, but, in fact, they do. They often compete for scarce grant monies. They also need to check out what other similar nonprofits are doing to make sure that they aren’t duplicating efforts.
Don’t agonize about how you word your answers; just give your responses serious consideration. Your findings will be useful when you write your mission, goals, and business plan.
By their very name, nonprofits don’t have a profit motive, but they do still have to be efficient and accountable. If your organization relies on charitable contributions, donors will weigh your organizational capabilities in much the same way they weigh the capabilities of a for-profit company. That’s because whether they’re directing charitable funds or nest-egg dollars, investors want to ensure that their money goes into ventures that will succeed.
Before investors and charitable donors pledge their support, they want to know that an organization has the capabilities to turn ideas into reality. As you write the plan for your nonprofit organization, pay special attention to these four qualities:
Strong and streamlined operations
Innovative ideas based on R&D expertise that’s capable of designing, developing, and enhancing distinctive products, services, and technologies