The short answer: skip the strategic plan template. Too many nonprofit strategic plans are neither strategic nor plans. And for-profit businesses are no better – most organizations regardless of tax status produce long, vague documents written by committee. Even if they are good, most of them end up on the shelf.
The nonprofits that grow fastest and win the largest investments write something different: a short, investment-grade plan that spells out the problem, the goal, the strategy, the money, the people and the risks. It’s a business plan.
If that phrase makes you wince, you’re in good company. Below we explain what we mean by it, why it works so well for mission-driven organizations and exactly what goes in it. Take a look for yourself: download our free nonprofit business plan template. This is the exact framework we have used to guide our clients to more than $1 billion in new revenue for more than 500 nonprofits in 28 countries.
“A business plan? We’re a nonprofit.”
It’s the most common reaction we hear, and it’s a fair one. Many nonprofit leaders chose this work precisely because they didn’t want to spend their lives in the endless pursuit of money. Some are wary of tools that come from a business world that has too often exploited people and the planet. We understand and agree. However, consider these facts:
“Nonprofit” describes your tax status, not how you operate. If your organization has a budget, a payroll, a board, people who depend on your services, funders who choose between you and other organizations, and a goal you’re trying to reach, you are already running an enterprise. The only question is whether you have a clear plan for doing so.
Your mission is the bottom line. A company’s business plan explains how it will make money. A nonprofit’s business plan explains how it will make the world a better place by solving a social problem: the challenge, the solution, how many people will be reached, how they will benefit, what it will cost, and finally where the money will come from. Money is a means to an end, not the end itself.
The framework is neutral. It isn’t moral or immoral. It’s simply the clearest, most proven way to organize a team around a goal and raise the money to reach it.
It’s the language your funders already speak. Business ownership is the leading source of wealth in the United States, so many of your largest potential financial supporters, foundation trustees, corporate partners and board members already understand business planning. When you hand them one, they know immediately how to read it, and they see an organization that thinks in terms of goals, accountability and results.
Many of our clients started out uncomfortable with the term. Most get very friendly with the format when they experience what this type of robust planning does for their board meetings, their staff and their funding conversations.
Does this sound like your organization?
A business plan is likely a better fit than another strategic plan if any of these are true:
- Your last strategic plan took months to write and is rarely opened.
- Board members and staff describe success in different ways.
- Funders ask for numbers, milestones or multiyear projections you can’t easily produce.
- You chase grants that pull programs in different directions.
- Next year’s budget is last year’s plus a little, even though the need you serve is much larger.
- You know you could serve far more people but can’t yet show how you’d pay for it.
Why most strategic plans fail
Writing a concise plan that covers everything that matters is hard, and few nonprofit leaders were ever taught what a strong plan should contain. That’s not a criticism of their skill. It’s a gap in training, reinforced by sector habits. This is what typically happens:
- Written by committee at an annual retreat. Group wordsmithing produces long, jargon-filled mission and vision statements that nobody remembers, so everyone leaves with their own idea of what success means.
- Goals without accountability. “Strengthen programs” and “diversify revenue” can’t be measured, so they can’t be missed. Fear of looking bad keeps leaders from committing to one bold, measurable goal.
- Theory of change and logic models instead of strategy. These sector-specific tools can absorb months of staff and consultant time and still leave money, staffing, execution and risk unresolved. We see so many nonprofits with a “logic model” or “theory of change” that consumed months of effort yet leaves the organization with no actionable roadmap to execute.
- Budgets drive the plan, instead of the reverse. The rule we follow is the opposite: let plans determine budgets, and don’t let incremental budgets constrain plans.
- Silent on the questions funders ask. Who’s on the team? How big is the problem? Who else works on it? What are the risks? What will it cost in years two and three?
- Too long to read, and reinvented every few years. A good plan is short, shared openly and updated regularly.
Strategic plan vs. business plan: side by side
| Strategic plan | Business plan | |
|---|---|---|
| Starting point | SWOT analysis that produces pages of abstract findings | Clear benchmarks that produce a punch list of what’s working and what needs development |
| Mission and vision | Long, jargon-filled paragraphs written by committee | Mission: “We solve this problem in this way.” Vision: “This is what complete success looks like.” 15 to 20 words each |
| The problem | Assumed, or described in emotional terms | A problem statement under 250 words, backed by statistics on its human, social and economic cost |
| Goals | Several broad priorities (“strengthen,” “expand,” “diversify”) | One big, hairy, audacious goal (BHAG), written as “X to Y by Z”. Everyone can remember it easily. |
| How change happens | Theory of change or logic model | Strategy: the full set of choices that will reach the goal, plus a value proposition with proof that it works |
| Who’s leading | Rarely mentioned | Short bios showing a team that funders can trust |
| The landscape | Rarely mentioned | Size of the audience you serve and how you compare to others working on the problem |
| Timeline | Year 1 activities | Crawl, walk, run milestones: specific in year 1, broader in later years |
| Measurement | Activity counts and anecdotes | A handful of key performance indicators covering finances, programs, stakeholders and the organization |
| Revenue | Fundraising as an afterthought, often event-driven | A revenue model across contributed, earned and invested income |
| Communications | Newsletters, social posts and mailings | A concise marketing plan: whom to reach, what to say, what action to ask for, how to measure it |
| Risk | Not addressed | Financial, reputational, legal, governance and operational risks, with how each is managed |
| Staffing | Not projected | An organization chart that projects hires by growth phase |
| Finances | Next year’s budget, based on last year’s | A 3- to 5-year financial projection, including months of cash reserve |
| Who writes it | A committee or retreat | The CEO writes it, then revises it one conversation at a time with staff, board and funders |
| Length and life span | 30 to 50 pages, reinvented every 3 to 5 years | 10 to 15 pages, shared as a draft and updated regularly |
| What it’s used for | Compliance and the shelf | Running the organization, guiding the board, recruiting talent and raising money |
What goes in a nonprofit business plan: the 14 sections
This is the structure of our free template. Each section is short. Together they answer every question a board member, staff member or major funder will ask.
- Problem: the problem you’re solving, described with concise statistics.
- Solution: what success looks like, in human, social, economic or environmental terms.
- Value proposition: why your organization is the best solution, with proof that your programs work. New programs can point to the best available research or a pilot.
- Team: brief bios of the executive team and board. Sophisticated funders look at the team first.
- Goal: your vision and your BHAG, written as “X to Y by Z.”
- Market: how many people (or places) face the problem, who else works on it and how you compare. “Market” simply means the population or place you serve.
- Strategy: how you deliver impact, and how you’ll grow.
- Milestones: the crawl, walk and run phases on the way to your BHAG.
- Metrics: a small set of key performance indicators. Too much data is as bad as none.
- Marketing and communications: who needs to be reached, the one or two messages each audience must remember and the action you want them to take.
- Revenue: how money comes in now and how it will grow, across individuals, foundations, corporations, government, earned income and impact investors.
- Risk: the risks you can foresee and how you’ll manage them. Naming risks builds credibility with funders. Hiding them erodes it.
- Financials: a summary of 3- to 5-year projections, with a detailed version available on request.
- Organization chart: planned growth in staffing, keyed to each milestone phase.
If it isn’t easy to read, it’s wrong. Use numbers, facts and research as evidence, avoid sales language and skip the fancy formatting. This is a working document, not a brochure.
Proof: what a business plan did for Treehouse
In one of our most famous case studies, in 2012, Treehouse, a Seattle nonprofit supporting youth in foster care, had a lot working against it. Educational program staff turned over at more than 30% a year, programs were siloed and hard to explain, and fundraising relied on costly events with donor attrition above 50%. Previous efforts to raise graduation rates had failed.
Instead of another strategic plan, Treehouse’s leadership built a business plan around one audacious goal: foster youth in King County will graduate at the same rate as their peers, with a plan for their future, by 2017. Many experts in the sector reacted with disbelief and criticism that the goal was “unrealistic.”
The plan did what strategic plans rarely do: it moved money. A board member presented it to AT&T executives, whose company had previously given $25,000. Their response: “We’ve never seen a charity show us a business plan this strong.” Six months later, AT&T invested $1 million. In the 12 months after the plan was in place, Treehouse raised about $6 million in new funding and grew its annual budget to over $10 million, adding 10% to 20% growth each year after. Today its model is expanding across the United States.
How to get started
- Don’t start from scratch. First, align your board and leadership on the big decisions: mission, vision, value proposition, BHAG, strategy and year-1 priorities. Capture them in a one-page planning framework.
- Skip the retreat. Replace long, exhausting planning sessions with short, focused working meetings: 30 minutes, twice a week, phones down.
- Let the CEO write it. The CEO is the chief planner and should write the plan or closely oversee whoever does. Revise it one conversation at a time, not by group wordsmithing.
- Stop at 80%. Don’t let the perfect be the enemy of the good. Share the draft with trusted funders, partners and staff, and use their feedback to improve it.
- Plan for a year, not a weekend. A good plan takes about three months to create, another three to test and at least a full year of funding and execution before it truly takes hold.
Get the free template. Our nonprofit business plan template includes completed example pages, a training video and planning notes. It’s the same framework behind more than $1 billion in new revenue for our clients.
Not sure your organization is ready to plan? Take the free 10-minute nonprofit assessment to see where you’re strong and what to fix first.
Frequently asked questions
What’s the difference between a nonprofit strategic plan and a business plan?
A strategic plan usually describes priorities and aspirations. A business plan adds what it takes to act on them and fund them: one measurable goal, a clear strategy, milestones, key performance indicators, a revenue model, risks, a staffing plan and multiyear financial projections. It’s the document serious funders expect to see.
Does writing a business plan mean running our nonprofit like a corporation?
No! It means being as clear about your mission’s results, costs and funding as the best companies are about theirs. Your values, your people and your purpose stay exactly where they are. The plan just makes them easier to act on and easier to fund.
Our board or staff resist the word “business.” What should we do?
Start with what the plan contains rather than what it’s called. Most teams come around once they see a plan that gives everyone the same definition of success and gives funders a reason to invest. We still recommend the name “business plan” in the end: it tells funders and partners that you think in terms of goals, accountability and results.
How long should a nonprofit business plan be?
No more than 10 to 15 pages. Staff and board members rarely read long documents. Keep a detailed financial projection available for anyone who wants more depth.
How long does it take to create one?
About three months to draft. Your mileage may vary, but if it takes much longer, you’ve got deeper constraints that need attention. Add another three months to test with stakeholders and at least a year of funding and execution before it fully takes hold. After that, you update it regularly rather than starting over.
Do we still need a theory of change or logic model?
No. These are nonprofit-only concepts that people in the private sector aren’t familiar with, and presenting yourself with these alien concepts gets you off on the wrong foot. What’s more, these concepts are much more abstract and ambiguous than a clear-cut, time-bound goal with associated strategies and KPIs.
Related: Nonprofit Strategic Planning: Why Most Fail, and the Investment-Grade Alternative
Adapted from Scaling Altruism: A Proven Pathway for Accelerating Nonprofit Growth and Impact by Donald Summers (Wiley, 2024), Chapters 1 to 3. See also Harvard Business Review, “Your Strategic Plans Probably Aren’t Strategic, or Even Plans.”
