Why Do NPO’s Need Business Plans?

Do you really need a business plan? When was the last time you took a critical look at all aspects of your organization—your programs or services, your members or constituents, your staffing, your systems? Are you thinking about succession issues? Are your funders asking about your diversity, equity, and inclusion practices? Have you incorporated social media into your communication strategies but haven’t figured out how it translates to new members or donors? Have you added programs and projects over the years, but haven’t terminated any?

Nonprofit organizations are typically so passionate about mission, rightfully so, they often pay less attention to what I call the “business of the business.” It is not enough anymore to simply do the “once-every-five-year-strategic-plan.” Organizations are complex, they are systems: successful organizations require much more than updated goals and a discussion of their mission.

Business planning is a useful tool for a more comprehensive and integrated approach to nonprofit organizational development. A business plan (or organizational development plan if the business terminology is less acceptable in your nonprofit environment) incorporates strategic decisions not only about focus, programs, and imperatives but also about constituents, governance, leadership and management, staffing, practices, and culture. In addressing the “business of the business” the plan guides how to develop the organization to achieve strategic goals and to engage constituents. In one single document, it aligns identity and strategy, marketing and communications, and resources – financial, human, and technological. It ensures that all the pieces fit together — a seamlessness that flows throughout the organization, that leverages all the organization’s assets and diminishes organizational disconnects or inefficiencies.

So yes, to address the questions facing your organization deliberately and systematically today, to ensure relevancy, and to be potent in your ability to achieve your mission — nonprofits need business planning. Based on rigorous and critical organizational analysis, which defines where you are, and informed decisions, which defines where you are going, the business plan guides how to design and develop the organization to get you from where you are to where you want to be.

For more information and a business plan outline see The Business Plan Blueprint.