These words belong to Dan Pallotta, an American entrepreneur, author, and humanitarian activist, who, in his Ted Talk, reiterates that a nonprofit should be run like a business. According to Pallotta, philanthropy is a market and it is the business of ‘encouraging love’ and ‘increasing awareness.’

Besides their impact through purpose, nonprofits usually need the same tools to function that any for-profit business does, including:

• a team that works on promoting the cause
• the technology that helps raise awareness of the cause
• the donors who can also be seen as customers ― because they have expectations of their money to be put to the cause they deeply care about

All these reasons show that the importance of a business plan for a nonprofit is significant. If you don’t have one, your nonprofit will hardly achieve the noble goal you want it to achieve. So, to help you write an effective nonprofit business plan, we gathered together a few useful tips that will help you properly plan your journey to raising awareness about the cause you’re passionate about.

1. First, Cover the Basics

In case a donor approaches you and asks you questions about your nonprofit, what are the first details you want them to know?

Start writing your business plan by covering the basic points you will share with potential donors. These points may include:

• What is the cause you’re promoting?
• What is the reason that prompted you to support this cause?
• How will you raise money?
• What is your nonprofit’s mission?
• What is your nonprofit’s value proposition and what makes you different?
• What will you do to support this mission?
• How will you do the marketing and ask for donations?

If you don’t know where to start, covering the basics pushes you in the right direction, as it creates an outline from which you can further develop a business plan for your nonprofit.

2. Pay Special Attention to Writing a Financial Plan

If you’re going to have some of your main donors join the board of members of your nonprofit, it’s important to provide them with a detailed financial plan to show them where their money will go.

That’s why you should consider dedicating one of the biggest parts of your business plan to the outline of your financial operations and expenses. Here are some of the points you may want to cover:

• current status of your nonprofit (including startup costs)
• projected status of your nonprofit (including the finances coming from donors and partnerships, as well as your fundraising plan)
• an income statement
• financial management statement (covering salaries, office management, and other operations)
• possible financial issues and gaps (including a solution to them)
• plans on how you will manage the finances in case of the surplus
• other donations (including grants or non-cash contributions)

If you’ve been running your nonprofit for a while and you’re planning to expand, include some accounting data to the outline for your finances for the board of members to see how successfully your nonprofit has been performing.

Besides, this section of your business plan will come in handy if the IRS or other auditors ask you to disclose the data on how your nonprofit operates its finances.

3. Add Credibility with a Nonprofit Evaluation Plan

How will your efforts to support your cause be measured?

Unlike for-profits that can measure their success by evaluating their sales, nonprofits can only measure their success by estimating how many milestones they’ve achieved.

So, if you want to write an effective nonprofit business plan, it’s important to include a section in which you will cover how you will measure your successes.

Depending on the cause you’re working on, as well as the size of your nonprofit, you should include one of these methods to see if you’ve met your goals:

• Narrowing down the mission statement. This evaluation approach will work if you have a very specific mission statement. For instance, if your nonprofit’s mission is to provide hungry people with food, your success will be measured by how many meals you’ve provided over a certain period of time. (Download Nonprofit Hub’s Creating a Mission Statement Guide here).
• Researching your impact on the cause. For example, if your nonprofit is working on improving access to education in underprivileged communities, after a certain period of time, you can do research to investigate your impact and success.
• Setting micro-level goals. If the first two approaches don’t fit, you can outline micro-level goals. Achieving these will indicate your nonprofit’s success on a greater scale.

Having such data in your business plan helps add credibility to it in the eyes of your donors and the wider public, and allows you to manage your nonprofit in a more structured way, as you have all your goals outlined.

Over to You

As you can see, running a nonprofit is a lot like running a business – you need a detailed plan on how you will achieve the goals supporting your cause.

If you don’t know where to start your plan, first, outline the basic details that your donors would want to know. Pay special attention to outlining the financial plan for your nonprofit, and add credibility to your business plan by describing how you will evaluate your successes.

Author Bio

Daniela McVicker is a blogger and a freelance writer who works closely with B2B and B2C businesses providing blog writing, copywriting, and ghostwriting services. Currently, she blogs for Essayguard. When Daniela isn’t writing, she loves to travel, read romance and science fiction, and try new wines.

The post 3 Tips to Write an Effective Nonprofit Business Plan appeared first on Nonprofit Hub.

By writing an effective report, you can help ensure that your nonprofit has the support it needs in the year to come. In other words, this might be one of the most important things you do each year. Successful nonprofits work hard to make their annual reports attractive, engaging, informative and accessible. What was once a typewritten report that only piqued the interest of a few people has certainly evolved. The annual report now comes in the form of interactive web pages, presentations and full-color brochures.

Should you choose to present your report, it should be accurate. Be sure to focus on your organization’s accomplishments, inspire people to get involved, share stories of the people you help and include all of the information mandated by law. Here are some tips on how to create an annual report that works for your organization.

1. Remember: compliance is important

Remember that this is also a compliance document. There are things you’re required to include in order to retain your nonprofit status. Creativity, appeal and other factors are important, but you must make sure you’re doing what’s required of you.

2. Identify what you want to accomplish

Rickie Ellis, head of marketing at Top Writers Review says, “Your report is going to cover what your organization has done over the past 12 months, but it will impact what happens in the future. So, you’ve got to have a clear idea of what you want your report to accomplish.”

What’s your call to action? If somebody with political pull, funds to donate or time to give reads your report, what do you want them to do next? How can your report help you accomplish your goals for the coming year?

3. Focus on your donors and volunteers

Let your volunteers and donors be the star of the annual report show. When you highlight your accomplishments, frame them as your donors’ and volunteers’ accomplishments. For example, if you were able to provide summer camp scholarships for 200 more kids than last year, it should say something like:

“Thanks to donations in excess of $50K earmarked for our summer camp fund, and the tireless efforts of more than 100 volunteers, we were able to send 200 more kids to Camp Roundabout last summer.”

4. Be honest (even if the picture isn’t rosy)

It can be disappointing or even devastating when your nonprofit organization doesn’t accomplish what you wanted it to. Still, it’s imperative that you lay out the truth in your annual report. Remember that one of your goals is to garner support, and you can do that by establishing need. If you aren’t meeting your goals, then clearly the need exists.

If you’ve had a disappointing year overall, or have just faced a few disappointments, be honest about it. People will be much more likely to support a competently run organization that’s struggling than one that covers up its shortcomings.

5. Be clear about what people can do to help

Your report is also a statement of need, even if things are going well. As you write about your efforts and successes over the past year, consider what you could have used to do even better. Then, think about the next year. What will you need in terms of funding, support and volunteerism to continue to serve the people you do and accomplish your objectives? Share your future plans and be explicit in stating your needs.

6. Make your report engaging

At the same time, this is also a marketing document. It has to be interesting enough to get people to read and keep them engaged throughout. You can do this by using quality images, telling stories that connect with people and prioritizing production value.

You might also consider different ways to present your report depending on your audience. Yes, some people will prefer a standard word document that they can read or distribute, but others might prefer a slide show presentation, interactive web pages, infographics or other content.

7. Profile your top supporters

People buy from people, and they donate to people. Show the human side of your organization by highlighting your top contributors. This includes your staff members, volunteers and donors. Let people get to know their stories, passions and efforts connect with people who may be helping your non-profit in the future.

The post 7 Tips for Building an Effective Nonprofit Annual Report appeared first on Nonprofit Hub.