The Nonprofit Business Plan

by LA Piana, David; Gowdy, Heather; Olmstead-rose, Lester; Copen, Brent

• ISBN13: 9781618580061
• ISBN10: 161858006X
• Format: Paperback
• Copyright: 2012-07-03
• Publisher: Fieldstone Alliance

Summary

A fresh, compelling approach to establishing a sustainable, results-driven nonprofit business plan. Nonprofits often use the terms "strategic planning" and "business planning" interchangeably, but a good business plan goes beyond the traditional strategic plan with its focus on mission and vision, goals and objectives. The Nonprofit Business Plan, created by the nationally recognized nonprofit consultant experts at La Piana Consulting, helps your nonprofit organization understand what a strategic business plan is and why you need one, then provides a practical, proven process for creating a successful, sustainable business model. This groundbreaking resource further explains how your nonprofit can determine whether a potential undertaking is economically viable-a vital tool in today's economic climate-and how to understand and solve challenges as they arise. With detailed instructions, worksheets, essential tools, case studies, and a rigorous financial analysis presented clearly and accessibly for executives, board members, and consultants, The Nonprofit Business Planis also an important resource for non-specialist audiences such as potential funders and investors. This innovative step-by-step guide will provide your team with a solid set of business decisions so that your nonprofit can achieve maximum results for years to come.

Excerpts

From Chapter 1:What is a Nonprofit Business Plan and Why Do You Need One?
Consider the following statements:

“Business planning is for businesses and strategic planning is for nonprofits.”
“A business plan is just a strategic plan with numbers attached.”
“I don’t need a business plan, I need a business case.”

These are some of the statements we have heard from clients in the course of discussing and engaging in business planning over the last several years. Each is built on certain assumptions common in the nonprofit sector.

“Business planning is for businesses and strategic planning is for nonprofits.”
This statement revives the old concept of nonprofit exceptionalism. After being told for more than two decades that they should operate more like businesses, nonprofits sometimes rebel, asserting that the distinct role, financing, and culture of most nonprofits make them completely different from businesses. We prefer Paul Light’s now-classic exhortation that in response to such arguments nonprofits should try to become “more nonprofit-like.”1 That is, nonprofits live in an economic world just as businesses do, but they have an essentially different function in society and therefore need to use caution in adopting business tools and business thinking wholesale. The bottom line: a nonprofit needs a business plan just as much as a business does, perhaps more so given the narrower room for experimentation and the high consequences of failure—both of which can be traced back to often-narrow operating margins and lack of adequate capital. But that business plan must be tailored to the unique needs of each nonprofit as it navigates its own complex path. Just as a manufacturing company executive would not tolerate being forced into a business planning process designed for a retail business, nonprofits need a business planning process that fits with their sector’s, and their organizations’, requirements.

“A business plan is just a strategic plan with numbers attached.”
This second statement implies that a strategic plan is still the basic document required for establishing a nonprofit’s direction and that to undertake business planning simply means adding a budget to that document, perhaps in an appendix. Such an approach reflects a missed opportunity. A solid business plan goes beyond articulation of strategy and projection of revenues and expenses—it delves into the organization’s economic logic and operational requirements, testing leadership’s assumptions and showing how and why the budget presented is likely to be sustainable in the long-term. It informs strategy, rather than being purely derivative of it.

“I don’t need a business plan, I need a business case.”
This statement reflects both a bit of discomfort with the idea of business planning and a common concern among those seeking to create one. Often they seek first and foremost a “case statement” for fundraising, a document that will persuade investors to fund whatever is being proposed. Once they enter the business planning process, however, even the most reluctant nonprofit leaders usually become enthusiastically engaged in understanding at a deeper level the enterprise or activity for which they seek to raise funds. Of course, a solid business plan is a great fundraising tool, but that is a secondary benefit; the primary value comes from engagement in a rigorous, analytical process that drives strategic, mission-oriented decisions.