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3 Sample Nonprofit Business Plans For Inspiration

sample nonprofit business plans

Download our Ultimate Nonprofit Business Plan Template here

Below are sample plans to help guide you in writing a nonprofit business plan.

  • Example #1 – Kids Are Our First Priority (KAOFP) – a Nonprofit Youth Organization based in Chicago, IL
  • Example #2 – Church of the Sacred Heart – a Nonprofit Church based in St. Louis, MO
  • Example #3 – Finally Home – a Nonprofit Homeless Shelter in Los Angeles, CA

Sample Nonprofit Business Plan #1 – Kids Are Our First Priority (KAOFP) – a Nonprofit Youth Organization based in Chicago, IL

Executive summary.

Kids Are Our First Priority (KAOFP) is a 501(c)3 nonprofit youth organization that seeks to provide opportunities for students who might otherwise not have access to the arts and humanities. We believe all students should have the opportunity to discover and develop their interests and talents, regardless of socioeconomic status or geographic location. We offer completely free after-school programming in music production, digital photography, creative writing, and leadership development to 12-18-year-olds at risk of dropping out of high school.

Our organization has been active for over five years and has run highly successful programs at two schools in the city of Chicago. We have been awarded an active grant from a local foundation for this coming year, but we will need to cover all costs on our own after that point. Nonprofit administrators have seen a lot of turnovers, leaving the organization without a sustainable plan for reaching its goals.

Organization Overview

The Kids Are Our First Priority (KAOFP) is a 501(c)3 nonprofit youth organization with a mission to provide opportunities for development and self-expression to students who might otherwise not have access. Audiences include at-risk, low-income students from elementary through high school in the Chicago area.

Our programs are built around creative learning with two goals: firstly, creating a space for learning and growth; secondly, encouraging students to share their work with the world.

KAOFP runs three different programs in partnership with closely related nonprofit organizations, providing after-school programming for elementary, middle, and high school-aged children. Programs take place twice a week at different schools around Chicago. While each program is unique in its goals and activities, all programs focus on creative development in the arts and humanities.

Products, Programs, and Services

The three programs offered by KAOFP are Leadership Development (LD), Creative Writing (CW), and Music Production (MP). Students learn in small groups led by skilled instructors. All activities are designed to encourage student engagement, creativity, expression, and community building. Instructors encourage students to share their work with the world through presentations on- and off-site.

Leadership Development (LD)

The Leadership Development program is designed to provide leadership opportunities for high school students who might not otherwise have access to these experiences. Students learn about facilitation, collaboration, communication, and organizational skills as they plan and run projects of their own design. The program’s goal is to provide a structured environment that encourages students to become more confident and comfortable being leaders in their schools, communities, and future careers.

Creative Writing (CW)

Students learn how to use writing creatively as a tool for expression, discovery, and communication. In small groups led by skilled instructors, students write poetry, short stories, and essays of their own design. They also learn about the publishing industry, read each others’ work, and share their writing with the community.

Music Production (MP)

Students learn how to use digital media as a tool for expression, discovery, and communication. In weekly sessions led by skilled instructors, students explore music production through computer software and recording equipment. Students produce their own music and write about their experiences in weekly journals. Industry professionals in the community often volunteer to lead special workshops and seminars.

Industry Analysis

The youth arts and humanities field is extremely competitive. There are many different types of nonprofit organizations doing similar work, but few credible providers with long-term commitments to their communities. KAOFP’s greatest strengths and competitive advantages are our stable and qualified staff, a strong foundation of funding and community support, and a diverse set of programs.

Our biggest competitors include national non-profits with large budgets for advertising and marketing as well as commercial programs that offer music lessons and creative writing courses which may be more cost-effective than our programs. We feel that by focusing on specific areas of creative expression, KAOFP can better serve its communities and differentiate itself from other nonprofit organizations effectively.

Customer Analysis

KAOFP serves elementary, middle, and high school-aged students with programs that include both after-school and summer programming.

Our focus is on low-income neighborhoods with a high population of at-risk youth. In these areas, KAOFP fills a void in the education system by providing opportunities for creative expression and leadership development to students who would not otherwise have access to these resources.

The demographics of our current students are as follows:

  • 91% African-American/Black
  • 6% Hispanic/Latino
  • 5% Multiracial
  • 3.9% Low Income
  • 4.9% Not Identified

Our main target is low-income African American and Latino youth in Chicago Public Schools. We would like to expand our outreach to include other communities in need of creative enrichment opportunities.

Marketing Plan

KAOFP’s marketing program is designed to support student, parent, and staff recruitment by promoting the organization’s goals and programs. Our main target audience consists of parents seeking after-school enrichment opportunities for their children that emphasize creativity and the arts.

To reach this audience, we advertise in public schools as well as on social networking sites such as Facebook and Twitter. We intend to begin marketing online through a company-sponsored blog, which will feature regular updates about KAOFP events and activities. We also intend to use word of mouth as a form of marketing.

Strategic partnerships with local schools and community centers will provide us with additional exposure as well as additional resources to secure funding.  

Operations Plan

KAOFP’s day-to-day operation is structured around its programs on Tuesdays from 4 pm to 8 pm.

Administrative offices are located in the same space as each program, allowing instructors to closely monitor their students and provide support as needed. The administrative offices serve the essential function of fundraising, communications, record-keeping, and volunteer coordination. KAOFP’s Board of Directors meets bi-monthly to provide further leadership, guidance, and oversight to our board members and volunteers.

Customer service is conducted by phone and email during our regular business hours of Monday – Friday 9 am to 12 pm.  We are not open on weekends or holidays.

Management Team

KAOFP’s organizational structure includes a Board of Directors, an Executive Director, and Program Directors. The Board of Directors provides guidance and oversight to the organization, while the Executive Director manages day-to-day operations. The Program Directors oversee each of KAOFP’s programs.

KAOFP has a small but dedicated staff that is committed to our students and our mission. Our team has a wide range of experience in the arts, education, and nonprofit sector.

Executive Director

The Executive Director is responsible for the overall management of KAOFP. This includes supervising staff, developing and implementing programs, overseeing finances, and representing the organization to the public.

Our Executive Director, Susie Brown, has been with KAOFP since its inception in 2010. She has a B.A. in Fine Arts from the University of Illinois at Urbana-Champaign and an M.F.A. in Creative Writing from Columbia College Chicago. Susie is responsible for the overall management of KAOFP, including supervising staff, developing and implementing programs, overseeing finances, and representing the organization to the public.

Program Directors

Each of KAOFP’s programs is overseen by a Program Director. The Program Directors are responsible for developing and implementing the program curricula, recruiting and training program instructors, and evaluating student progress.

Art Program Director

The Art Program Director, Rachel Smith, has a B.A. in Fine Arts from the University of Illinois at Urbana-Champaign. She is responsible for developing and implementing the program curricula, recruiting and training program instructors, and evaluating student progress.

Music Program Director

The Music Program Director, John Jones, has a B.A. in Music Education from the University of Illinois at Urbana-Champaign. He is responsible for developing and implementing the program curricula, recruiting and training program instructors, and evaluating student progress.

Theatre Program Director

The Theatre Program Director, Jane Doe, has a B.A. in Theatre Arts from the University of Illinois at Urbana-Champaign. She is responsible for developing and implementing the program curricula, recruiting and training program instructors, and evaluating student progress.

Board of Directors

KAOFP’s Board of Directors provides guidance and oversight to the organization. The Board consists of community leaders, educators, artists, and parents. Board members serve three-year terms and can be renewed for one additional term.

Financial Plan

KAOFP’s annual operating budget is approximately $60,000 per year, with an additional one-time cost of about $10,000 for the purchase of equipment and materials. The agency makes very efficient use of its resources by maintaining low overhead costs. Our biggest expense is instructor salaries, which are approximately 75% of total expenses.

Pro Forma Income Statement

Pro forma balance sheet, pro forma cash flow statement, nonprofit business plan example #2 – church of the sacred heart – a nonprofit church based in st. louis, mo.

The Church of Sacred Heart is a nonprofit organization located in St. Louis, Missouri that provides educational opportunities for low-income families. We provide the best quality of education for young children with tuition rates significantly lower than public schools. It has been voted Best Catholic Elementary School by the St Louis Post Dispatch for four years running, and it has maintained consistently high ratings of 4.5 out of 5 stars on Google Reviews since its opening in 1914.

The Church of Sacred Heart strives to build strong relationships with our community by making an impact locally but not forgetting that we operate on global principles. As such, our school commits 10% of its profits to charitable organizations throughout the world every year, while also conducting fundraisers throughout the year to keep tuition rates affordable.

We are currently transitioning from a safe, high-quality learning environment to an even more attractive facility with state-of-the-art technology and modern materials that will appeal to young students and their families. New facilities, such as additional classrooms and teachers’ lounges would allow us not only to accommodate new students but also attract current families by having more places within the school where they can spend time between classes.

By taking full advantage of available opportunities to invest in our teachers, students, and facilities, we will be able to achieve steady revenue growth at 4% per year until 20XX.

The Church of Sacred Heart provides a safe learning environment with an emphasis on strong academics and a nurturing environment that meets the needs of its young students and their families. Investing in new facilities will allow us to provide even better care for our children as we continue to grow as a school.

Mission Statement: “We will strive diligently to create a safe, respectful environment where students are encouraged and inspired to learn through faith.”

Vision Statement: “Sacred Heart believes education gives every child the opportunity to achieve their full potential.”

The Church of the Sacred Heart was built in 1914 and is located in the Old North St. Louis neighborhood, an area with a high concentration of poverty, crime, unemployment, and abandoned buildings.

The church houses the only Catholic school for low-income families in the north city; together they formed Sacred Heart’s educational center (SCE). SCE has strived to provide academic excellence to children from low-income families by providing a small, nurturing environment as well as high academic standards.

The facility is in need of renovations and new equipment to continue its mission.

The Church of the Sacred Heart is a small nonprofit organization that provides a variety of educational and community services.

The services provided by Sacred Heart represent a $5 billion industry, with nonprofit organizations accounting for $258.8 billion of that total.

The health care and social assistance sector is the largest among nonprofits, representing 32 percent of revenues, followed by educational services (18 percent), and human and other social service providers (16 percent).

The key customers for the Church of the Sacred Heart are families in need of affordable education. The number of students in the school has increased from 500 when it opened in 1914 to 1,100 at its peak during 20XX-20XX but has since declined due to various reasons.

The children at Sacred Heart are from low-income families and 91 percent qualify for free or reduced lunches. Most parents work or have a family member who works full-time, while others don’t work due to child care restraints. The number of children enrolled in Sacred Heart is stable at 1,075 students because there is a lack of affordable alternatives to Catholic education in the area.

SCE offers K-5th grade students a unique learning experience in small groups with individualized instruction.

Sacred Heart has an established brand and is well known for its high standards of academic excellence, which include a 100 percent graduation rate.

Sacred Heart attracts prospective students through promotional materials such as weekly bulletins, mailers to homes that are located in the area served, and local churches.

Parents and guardians of children enrolled in Sacred Heart are mainly referrals from current families, word-of-mouth, and parishioners who learn about the school by attending Mass at Sacred Heart.

The Church of Sacred Heart does not currently advertise; however, it is one of the few Catholic schools that serve low-income families in St. Louis, MO, and therefore uses word of mouth to attract new students to its school.

The Church of Sacred Heart has an established brand awareness within the target audience despite not having direct marketing plans or materials.

The operations section for the Church of the Sacred Heart consists of expanding its after-school program as well as revamping its facility to meet the growing demand for affordable educational services.

Sacred Heart is located in an area where more than one-third of children live below the poverty line, which helps Sacred Heart stand out among other schools that are more upscale. Expansion into after-school programs will allow it to capture a larger market share by providing additional services to its target audience.

In order to expand, Sacred Heart will have to hire additional personnel as well as invest in new equipment and supplies for both the school and the after-school program.

The Church of Sacred Heart’s financial plan includes a fundraising plan that would help renovate the building as well as acquire new equipment and supplies for the school.

According to the National Center for Education Statistics, Catholic elementary schools across all grade levels spend an average of $6,910 per pupil on operating expenses. A fundraising initiative would help Sacred Heart acquire additional revenue while expanding its services to low-income families in St Louis, MO.

Financial Overview

The Church of the Sacred Heart expects to generate revenues of about $1.2 million in fiscal year 20XX, representing a growth rate of 2 percent from its 20XX revenue level. For 20XX, the church expects revenues to decrease by 4 percent due to a decline in enrollment and the lack of new students. The Church of Sacred Heart has experienced steady revenue growth since its opening in 1914.

  • Revenue stream 1: Tuition – 22%
  • Revenue stream 2: Investment income – 1%

Despite being located in a poverty-stricken area, the Church of Sacred Heart has a stable revenue growth at 4 percent per year. Therefore, Sacred Heart should be able to attain its 20XX revenue goal of $1.2 million by investing in new facilities and increasing tuition fees for students enrolled in its after-school program.

Income Statement f or the fiscal year ending December 31, 20XX

Revenue: $1.2 million

Total Expenses: $910,000

Net Income Before Taxes: $302,000

Statement of Financial Position as of December 31, 20XX 

Cash and Cash Equivalents: $25,000

Receivables: $335,000

Property and Equipment: $1.2 million

Intangible Assets: $0

Total Assets: $1.5 million

Balance Statement

The board of directors has approved the 20XX fiscal year budget for Sacred Heart Catholic Church, which is estimated at $1.3 million in revenues and $920,000 in expenditures.

Cash Flow Statement f or the Fiscal Year Ending December 31, 20XX

Operating Activities: Income Before Taxes -$302,000

Investing Activities: New equipment and supplies -$100,000

Financing Activities: Fundraising campaign $200,000

Net Change in Cash: $25,000

According to the 20XX fiscal year financial statements for Sacred Heart Catholic Church, it expects its investments to decrease by 4 percent and expects to generate $1.3 million in revenues. Its total assets are valued at $1.5 million, which consists of equipment and property worth approximately 1.2 million dollars.

The Church of Sacred Heart’s financial statements demonstrate its long-term potential for strong revenue growth due to its steady market share held with low-income families in St. Louis, MO.

Nonprofit Business Plan Example #3 – Finally Home – a Nonprofit Homeless Shelter in Los Angeles, CA

Finally Home is a nonprofit organization that aims to provide low-income single-parent families with affordable housing. The management team has a strong background in the social service industry and deep ties in the communities they plan to serve. In addition, Finally Home’s CEO has a background in real estate development, which will help the organization as they begin developing its operations.

Finally Home’s mission is to reinvent affordable housing for low-income single-parent families and make it more sustainable and accessible. They will accomplish this by buying homes from families and renting them out at an affordable price. Finally Home expects its model of affordable housing to become more sustainable and accessible than any other model currently available on the market today. Finally Home’s competitive advantage over similar organizations is that it will purchase land and buildings from which to build affordable housing. This gives them a greater amount of ownership over their communities and the properties in which the homes are located, as well as freedom when financing these projects.

Finally Home plans on accomplishing this by buying real estate in areas with high concentrations of low-income families who are ready to become homeowners. These homes will be used as affordable housing units until they are purchased by Finally Home’s target demographic, at which point the organizations will begin renting them out at a base rate of 30% of the family’s monthly household income.

Finally Home plans on financing its operations through both private donations and contributions from foundations, corporations, and government organizations.

Finally Home’s management team has strong backgrounds in the social service industry, with deep ties to families that will be prepared to take advantage of Finally Home’s affordable housing opportunities. The CEO of Finally Home also brings extensive real estate development experience to the organization, an asset that will be especially helpful as Finally Home begins its operations.

Finally Home is a nonprofit organization, incorporated in the State of California, whose mission is to help homeless families by providing them with housing and support services. The centerpiece of our program, which will be replicated nationwide if successful, is an apartment complex that offers supportive living for single parents and their children.

The apartments are fully furnished, and all utilities are paid.

All the single parents have jobs, but they don’t earn enough to pay market-rate rent while still paying for other necessities such as food and transportation.

The organization was founded in 20XX by Henry Cisneros, a former U.S. Secretary of Housing and Urban Development who served under President Bill Clinton. Cisneros is the chairman of Finally Home’s board of directors, which includes leaders with experience in banking, nonprofit management, and housing professions.

The core values are family unity, compassion for the poor, and respect for our clients. They are the values that guide our employees and volunteers at Finally Home from start to finish.

According to the United States Conference of Mayors’ Task Force on Hunger and Homelessness 20XX Report, “Hunger & Homelessness Survey: A Status Report on Hunger & Homelessness in America’s Cities,” almost half (48%) of all homeless people are members of families with children. Of this number, over one quarter (26%) are under the age of 18.

In 20XX, there were 9.5 million poor adults living in poverty in a family with children and no spouse present. The majority of these families (63%) have only one earner, while 44% have zero earners because the person is not old enough or does not work for other reasons.

The total number of people in poverty in 20XX was 46.5 million, the largest number since Census began publishing these statistics 52 years ago.

Finally Home’s goal is to help single parents escape this cycle of poverty through providing affordable housing and case management services to support them long term.

Unique Market Position

Finally Home creates unique value for its potential customers by creating housing where it does not yet exist.

By helping single parents escape poverty and become self-sufficient, Finally Home will drive demand among low-income families nationwide who are experiencing homelessness. The high level of need among this demographic is significant nationwide. However, there are no other organizations with the same market position as Finally Home.

Finally Home’s target customers are low-income families who are experiencing homelessness in the Los Angeles area. The organization will actively seek out these families through national networks of other social service providers to whom they refer their clients regularly.

Finally Home expects to have a waiting list of families that are interested in the program before they even open their doors.

This customer analysis is based on the assumption that these particular demographic groups are already active users of other social service programs, so referrals will be natural and easy for Finally Home.

Industry Capacity

This information is based on the assumption that these particular demographic groups are already active users of other social service programs, so referrals will be natural and easy for Finally Home.

There is a growing demand for low-income single-parent housing nationwide, yet there is no one organization currently providing these services on a national level like Finally Home.

Thus, Finally Home has a competitive advantage and market niche here because it will be the only nonprofit organization of its kind in the country.

Finally Home’s marketing strategies will focus on attracting potential customers through national networks of other social service providers. They will advertise to their referral sources using materials developed by the organization.  Finally Home will also advertise its services online, targeting low-income families using Google AdWords.

Finally Home will be reinventing affordable housing to make it more accessible and sustainable for low-income single parents. In this new model, Finally Home will own the land and buildings on which its housing units are built, as well as the properties in which they are located.

When a family is ready to move into an affordable housing unit, Finally Home will buy the home they currently live in. This way, families can take advantage of homeownership services like property tax assistance and financial literacy courses that help them manage their newfound wealth.

Finally Home has already partnered with local real estate agents to identify properties for purchase. The organization expects this to result in homes that are at least 30% cheaper than market value.

Finally Home will finance its operational plan through the use of private contributions and donations from public and private foundations, as well as corporate sponsorships.

Finally Home’s management team consists of:

  • Veronica Jones, CEO, and Founder
  • Mark MacDonald, COO
  • Scott Bader, CFO

Management Summary

The management team has a strong history of social service advocacy and deep ties in the communities they plan to serve. In addition, the organization’s CEO has a background in real estate development that will be helpful as Finally Home begins operations.

  • Year 1: Operation startup costs to launch first five houses ($621,865)
  • Year 2: Deliver on market offer and complete first capital raise ($4,753,000)
  • Year 3: Deliver on market offer and complete $5 million capital raise ($7,950,000)
  • Year 4+: Continue to grow market share with a national network of social services providers ($15,350,000).

This nonprofit business plan will serve as an effective road map for Finally Home in its efforts to create a new model for affordable housing.

Nonprofit Business Plan Example PDF

Download our non-profit business plan pdf here. This is a free nonprofit business plan example to help you get started on your own nonprofit plan.

How to Finish Your Nonprofit Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your nonprofit business plan?

With Growthink’s Ultimate Nonprofit Business Plan Template you can finish your plan in just 8 hours or less!

Other Helpful Nonprofit Business Planning Articles

  • Non-Profit Business Plan
  • How to Write a Nonprofit Business Plan
  • 10 Tips to Make Your Nonprofit’s Business Plan Stand Out
  • How to Write a Mission Statement for Your Nonprofit Organization
  • Strategic Planning for a Nonprofit Organization
  • How to Write a Marketing Plan for Your Nonprofit Business
  • 4 Top Funding Sources for a Nonprofit Organization
  • What is a Nonprofit Organization?
  • 20 Nonprofit Organization Ideas For Your Community

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  • Insights & Analysis
  • Nonprofit Jobs

Business Planning for Nonprofits

Business planning is a way of systematically answering questions such as, “What problem(s) are we trying to solve?” or “What are we trying to achieve?” and also, “Who will get us there, by when, and how much money and other resources will it take?”

The business planning process takes into account the nonprofit’s mission and vision, the role of the board, and external environmental factors, such as the climate for fundraising.

Ideally, the business planning process also critically examines basic assumptions about the nonprofit’s operating environment. What if the sources of income that exist today change in the future? Is the nonprofit too reliant on one foundation for revenue? What happens if there’s an economic downturn?

A business plan can help the nonprofit and its board be prepared for future risks. What is the likelihood that the planned activities will continue as usual, and that revenue will continue at current levels – and what is Plan B if they don't?

Narrative of a business plan

You can think of a business plan as a narrative or story explaining how the nonprofit will operate given its activities, its sources of revenue, its expenses, and the inevitable changes in its internal and external environments over time. Ideally, your plan will tell the story in a way that will make sense to someone not intimately familiar with the nonprofit’s operations.

According to  Propel Nonprofits , business plans usually should have four components that identify revenue sources/mix; operations costs; program costs; and capital structure.

A business plan outlines the expected income sources to support the charitable nonprofit's activities. What types of revenue will the nonprofit rely on to keep its engine running – how much will be earned, how much from government grants or contracts, how much will be contributed? Within each of those broad categories, how much diversification exists, and should they be further diversified? Are there certain factors that need to be in place in order for today’s income streams to continue flowing?

The plan should address the everyday costs needed to operate the organization, as well as costs of specific programs and activities.

The plan may include details about the need for the organization's services (a needs assessment), the likelihood that certain funding will be available (a feasibility study), or changes to the organization's technology or staffing that will be needed in the future.

Another aspect of a business plan could be a "competitive analysis" describing what other entities may be providing similar services in the nonprofit's service and mission areas. What are their sources of revenue and staffing structures? How do their services and capacities differ from those of your nonprofit?

Finally, the business plan should name important assumptions, such as the organization's reserve policies. Do your nonprofit’s policies require it to have at least six months of operating cash on hand? Do you have different types of cash reserves that require different levels of board approval to release?

The idea is to identify the known, and take into consideration the unknown, realities of the nonprofit's operations, and propose how the nonprofit will continue to be financially healthy.  If the underlying assumptions or current conditions change, then having a plan can be useful to help identify adjustments that must be made to respond to changes in the nonprofit's operating environment.

Basic format of a business plan

The format may vary depending on the audience. A business plan prepared for a bank to support a loan application may be different than a business plan that board members use as the basis for budgeting. Here is a typical outline of the format for a business plan:

  • Table of contents
  • Executive summary - Name the problem the nonprofit is trying to solve: its mission, and how it accomplishes its mission.
  • People: overview of the nonprofit’s board, staffing, and volunteer structure and who makes what happen
  • Market opportunities/competitive analysis
  • Programs and services: overview of implementation
  • Contingencies: what could change?
  • Financial health: what is the current status, and what are the sources of revenue to operate programs and advance the mission over time?
  • Assumptions and proposed changes: What needs to be in place for this nonprofit to continue on sound financial footing?

More About Business Planning

Budgeting for Nonprofits

Strategic Planning

Contact your state association of nonprofits  for support and resources related to business planning, strategic planning, and other fundamentals of nonprofit leadership. 

Additional Resources

  • Components of transforming nonprofit business models  (Propel Nonprofits)
  • The matrix map: a powerful tool for nonprofit sustainability  (Nonprofit Quarterly)
  • The Nonprofit Business Plan: A Leader's Guide to Creating a Successful Business Model  (David La Piana, Heather Gowdy, Lester Olmstead-Rose, and Brent Copen, Turner Publishing)
  • Nonprofit Earned Income: Critical Business Model Considerations for Nonprofits (Nonprofit Financial Commons)
  • Nonprofit Sustainability: Making Strategic Decisions for Financial Viability  (Jan Masaoka, Steve Zimmerman, and Jeanne Bell)

Disclaimer: Information on this website is provided for informational purposes only and is neither intended to be nor should be construed as legal, accounting, tax, investment, or financial advice. Please consult a professional (attorney, accountant, tax advisor) for the latest and most accurate information. The National Council of Nonprofits makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

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Crafting a Sustainable Nonprofit Business Model: Is It Possible in the Arts and Culture Sector?

Dr. Bruce D. Thibodeau, President

The creation and implementation of a sustainable business model in the arts and culture sector has sparked discussions, articles, and, for board and staff leaders, many sleepless nights. The public, private, and nonprofit sectors all face the challenges of an ever-changing world. For private and nonprofit organizations, dialog regarding sustainable business models may develop from their strategies to maximize impact and increase revenues while minimizing costs. That sounds simple enough, so why is realizing that sustainability goal so elusive?

For many, strategy, operations, and business models are not clearly defined. The external context in which nonprofit organizations operate is becoming more challenging and competitive. Socially conscious nonprofits are shifting away from decisions based solely on past experience, industry norms, and resource dependency. Instead, they are creating innovative business models and practices by shaping strategic partnerships and responses that include a deeper understanding of the internal and external forces that impact their organizations.[1] This edition of Arts Insights clarifies the differences between strategy, tactics, and business models and highlights the properties of a sustainable business model. The information provided is intended to be the start to an ongoing dialog about the challenges and opportunities ahead for the dynamic nonprofit arts and culture industry.

Defining Strategy, Tactics, and Business Model

Organizational strategy, tactics, and business model can mean different things to various stakeholders. At times, these words are used interchangeably, which can create confusion in broader discussions around strategy and sustainability. The Harvard Business Review ( HBR ) article “How to Design a Winning Business Model” sheds important light on using strategy as the primary building block of competitiveness, arguing that the quest for sustainable advantage likely begins with the right business model. Strategy is the plan to create a unique and valuable position involving a distinctive set of activities, while the business model consists of how an organization creates and captures value for stakeholders. Tactics, sometimes referred to as operations, are the residual choices open to a company by virtue of the business model that it employs. If the business model is a car, then strategy is designing and building the car and tactics are how you drive the car.[2]

The Five Elements of Strategy

The article “Are you sure you have a strategy?” tackles issues related to strategic fragmentation, catch-all phrases, and statements that companies use as strategies when really referring to tactics. It is perhaps impossible to isolate specific elements of a strategy without looking at their synergistic whole. These elements include:

  • Arenas: Where will an organization be active? In the arts and culture sector, this can take many shapes and forms both inside and outside its facilities, in its social media and digital presence, and well beyond.
  • Vehicles: How will an organization get into those arenas? This may include collaborations, new program development, and any number of paths to reach a broader audience.
  • Differentiators: What is an organization’s value proposition and positive institutional impact that will capture participation and support for its programs and services?
  • Staging: What will be the speed and sequence of the organization’s actions?
  • Economic Logic: How will the organization obtain its financial, social, cultural, community, and other returns in its quest to achieve sustainability?[3]

Key stakeholders with for-profit business savvy may believe the strategy is to run nonprofits more like a business with a financial bottom line as the primary goal. Experienced nonprofit sector professionals understand that the larger mission and intended institutional impacts are constrained by lack of resources, all of which influence the business model. The distraction of daily activities, emails, and meetings can complicate these perspectives, creating an illusion that addressing short-term or urgent needs will achieve both the strategy and underlying business model. Such fragmentation does not advance the concept of what is inherently long-term sustainability. Integrating these five elements into a cohesive strategy will allow for risk reduction in selecting a sustainable business model. It also positions the organization to flexibly respond to changing social, technological, economic, environmental, political, legal, and ethical trends.

Policy, Asset, and Governance: The Choices and Consequences

Organizations generally make choices in three key areas when crafting their business models—policy, asset, and governance.[4] These choices can have flexible or rigid consequences. For example, discounted ticket pricing is flexible and could yield an increase in attendance from a broader base, while operating in resource scarcity mode for extended periods of time can create a rigid and embedded revenue-focused organizational culture.

In another example, consequences can result from policies that seek to limit the use of unrestricted bequests into the permanently restricted endowment. The policy can create a lean but inefficient business model that lacks the financial resources it needs to operate, achieve its strategic initiatives, and create long-term sustainability. These endowment funds are typically held in trust to protect long-term legacy. Policy restrictions (choice) can become an impediment that creates negative results (consequences).

Choices and consequences in the nonprofit sector are perhaps even more pronounced and complex than in for-profits. Individuals in governance and policy roles can also provide or connect an organization with important financial, human, technological, or other material or intangible assets. Additionally, many of these key individuals are also consumers of the product or service offered by the organization for which they are setting policy and providing governance. While board members of international pharmaceutical companies may never use the drugs developed for patients, cultural institution trustees will immediately see the consequences of their choices. Running an arts and culture organization like a business takes on an entirely new meaning and creates far more intricate challenges for nonprofits in regard to strategy, tactics, and business model.

A Good Business Model: Are We There Yet?

Ultimately, the business model addresses who the customers are, what they value, and how the organization delivers value to them.[5] If strategy is about designing and building cultural institutions and tactics relate to how they operate, perhaps the institution as “the car” is the most elusive analogy of the three to solidify. The following three questions can help determine the characteristics of a good business model.[6] Is the business model:

  • Aligned with the organization’s mission and goals? Ultimately, does the business model enable building momentum towards the financial, cultural, community, social, or educational goals established as part of the strategy?
  • Self-reinforcing? As an example, if a theater company believes its purpose is to provide low-cost access to its programs for those in socioeconomically disadvantaged communities but a majority of its seats are tailored to those with the means to pay, is the business model structured correctly?
  • Robust? Can an organization capitalize on its strengths and opportunities while minimizing its weaknesses and threats (SWOT)? To achieve this, it is necessary to examine if the business model can fend off four key challenges: imitation (direct/indirect competitors), holdup (customers/suppliers bargaining), slack (organizational complacency), and substitution (new products/services).[7]

Organizations must consistently review various internal and external forces, their SWOT, available resources, industry changes, and quality of programs and services. Focus should be directed at how effectively and consistently the cultural institution is delivering on its promises to the community and stakeholders that it serves.

Strategic Planning and Implementation Changes

Members of the Academy of Management’s Strategizing Activities and Practice (SAP) understand that strategy is not something that firms have but rather something that people in an organization do. Perhaps this is a further testament to the complexities of strategy, tactics, and business model that constantly require careful quantitative and qualitative research with different ways of thinking, learning, and doing business. Creating a meaningful strategy that has an innovative business model and effective tactical operations is not easy in the arts and culture sector. Private, public, and nonprofit practitioners struggle to comprehend the depth and breadth of issues that any business faces. All firms hope to advance sustainability by having an appropriate strategy, effective tactics, and the right business model. Through research, trial and error, and passion for their respective missions, arts and culture organizations can learn a tremendous amount about strategic frameworks, analytical tools, and organizational efficiencies. While challenging, the work must continue if these community pillars hope to thrive.

A solid understanding of the dynamics within, across, and surrounding the nonprofit arts and culture sector will be one of the keys to its future success. The industry, institutions, and communities in which they operate have ever-changing demographics and socioeconomics that require careful consideration. As resources shift, local audience options expand, and live and virtual competition arise in the arts and culture sector, the factors that influence organizational sustainability are even more challenging. Focused strategies, efficient tactics, and well-defined business models must evolve—simultaneously learning from past experiences, living in an uncertain present, and looking to future opportunities. Extremely committed and socially active stakeholders continue to leave a tremendous legacy for the advancement of arts and culture as a cornerstone of resilient, diverse, and inclusive communities. Fortunately, their connection, capacity, and commitment bodes well for organizations that seek to realize impactful strategies and sustainable business models into the future.

[1] Robert E. McDonald, Gillian Sullivan Mort, Jay Weerawardena, “Sustainability of nonprofit organizations: An empirical investigation,” Journal of World Business , 2010, 346-356. [2] Ramon Casadesus-Masanell and Joan E. Ricart, “How to Design a Winning Business Model,” Harvard Business Review , January-February 2011. [3] James W. Fredrickson and Donald C. Hambrick, “Are you sure you have a strategy?” The Academy of Management Executive, November 2005, 51-62. [4] McDonald, Sullivan Mort, Weerawardena, supra. [5] Peter Drucker, “The Theory of the Business,” Harvard Business Rreview, September-October 1994, 95-104. [6] McDonald, Sullivan Mort, Weerawardena, supra. [7] Pankaj Shemawat, Commitment: The Dynamic of Strategy , New York: Free Press, 1991.

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Contact ACG for more information on how we can help your organization clarify its strategy, craft a business model, and improve operational efficiencies.

(888) 234.4236 [email protected] ArtsConsulting.com

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8 Lessons from the Front Lines of Nonprofit Arts Management

Kate Barr | June 21, 2017

Dancer mid-leap in front of purple screen.

Over the years, Propel Nonprofits (formerly Nonprofits Assistance Fund and MAP for Nonprofits) has worked with a wide range of arts organizations: small, large, urban, rural, and spanning an array of mediums, audiences, and missions.

Our partnerships with these nonprofits have yielded great lessons and insights into the finances, pitfalls, challenges, triumphs, and life cycles of arts organizations. We recently published a collection of eight lessons learned  that highlight some of the profound lessons we’ve learned through years of partnership with these organizations.

We hope these lessons can serve as a guiding light to other communities across the country who are looking to support their own creative cultures in a fiscally aware and sustainable manner.

Here are a few of the lessons we’ve learned about working with arts and culture organizations:

Get involved early and stay with the organization. Relationships need to evolve and extend to more than one person.

Arts nonprofits, like any business or organization, are prone to growing pains—including the presence of multi-decade leaders whose vision enabled the creation of the institution but whose skills (or current, defined internal responsibilities) need to adapt as the organization’s mission grows and changes.

When Park Square Theater undertook an ambitious expansion, both in operating budget and physical space, Propel Nonprofits’ long relationship with the theater enabled us to provide business-plan consulting in addition to financial assistance, shepherding Park Square’s management structure into a sustainable allocation of talent, skills, and workload. Read the full Park Square case study .

Understand the organization as a whole, not just an event in isolation.

A degree of artistic risk is often baked into cultural organizations’ work, but if they are to weather changing times and shifts in philanthropy and sponsorship, they must be built on the foundation of a solid business model.

When Penumbra Theatre, one of the nation’s most prominent African American theater companies, faced a financial crisis in 2011-12, Propel Nonprofits was able to help them return to stable ground not just by addressing the current financial shortfall, but by cultivating a nuanced understanding of the full range of circumstances that led them to that point, providing customized financial training, and helping them tighten their focus and strategy. Read the full Penumbra Theatre case study .

Understand the business models of arts organizations, and the external environment in which they operate.

It’s important for funding partners to understand the unique context within which an arts organization operates—particularly culturally specific organizations that often work within chronic shortfalls in funding and support.

Theater Mu (formerly Mu Performing Arts), an Asian American arts organization, experienced two years of deficits during a period of leadership transition that coincided with two large grants expiring. Propel Nonprofits was able to provide an evaluation of Mu’s business model and financial support that was both monetary and strategic, all in the context of a funding environment that presents structural challenges. In balancing Mu’s creative ambitions with its financial bottom line, it was crucial to consider the value of its role in the local and national arts ecosystems (as well as the historically difficult path for theaters of color). Read the full Theater Mu case study .

Artists have significant capacity for nonprofit financial management.

Many arts organizations start small, founded and run by people motivated more by a passion for creating than for managing the bottom line. But by no means does this mean that artists are incapable of gaining a sophisticated degree of financial savvy, discipline, and management.

Juxtaposition Arts CEO DeAnna Cummings calls herself an “accidental CEO.” She stepped into the business management role early in the organization’s life, while her two co-founders focused on artistic direction. She attended classes at Propel Nonprofits that focused on financial management, budgeting, managing cash flow, and using dashboards. She has since become a prodigious executive. In 2016, she was selected to be a fellow at Washington, D.C.’s prestigious DeVos Institute of Arts Management. She has demonstrated the profound evolution of an artist to the driving strategist of an innovative and forward-looking community placemaker. Read the full Juxtaposition Arts case study .

Build financial knowledge throughout the organization, and convey the joys of embracing and practicing financial rigor.

Investing in financial training and development within an arts organization can help it to grow and thrive, and allow its creative mission to become even more ambitious.

Over the course of the last few years, through a renewed focus on financial rigor and some help navigating the finer points of cash flow and projections, TU Dance has gone from needing a loan to cover payroll to running surpluses and budgeting a cash reserve. The organization’s financial culture has become razor-focused on smart spending—in particular, getting away from the culture of smaller nonprofits in which all cash available is often budgeted out and spent. Read the full TU Dance case study .

Challenge or crisis can provide opportunity.

Organizations in duress often have storms brewing (or raging) on multiple fronts, requiring strong and visionary leadership to keep the organization intact. Finding an agent of change who is willing to truly listen, internalize needed lessons, and take charge can make all the difference in turning crisis into opportunity for renewal.

Andrew Peterson joined FilmNorth (then Independent Filmmaker Project Minnesota) as interim Executive Director in 2012, when the organization was in crisis. Funders’ trust was frayed, accounting procedures were inadequate, and they were stuck under an onerous lease in an unsuitable home. Propel Nonprofits worked closely with FilmNorth and Peterson to tighten its accounting and reporting structures—an essential factor in restoring the faith that had wavered in FilmNorth’s funders. With new leadership that was open and eager to learn and adopt new, disciplined assurances and procedures, FilmNorth was able to pull through the storm and is currently thriving in greater stability and alignment with its vision. Read the full FilmNorth case study .

Access to working capital is critical for stability and growth.

Circumstances that lead to restrictions in working capital, such as owning a home building, can be both a strength and a liability for an arts organization. Activities intended to strengthen and deepen an organization’s footprint or bond with its community can also tie up funds needed for regular operations in shifting economic conditions, as well as restrict growth and core mission.

Following the revaluation of its Art Deco cinema house, In the Heart of the Beast Puppet and Mask Theater saw the credit attached to its mortgage veer into dangerous territory. A $237K loan enabled the theater to refinance its mortgage and shift the obligation to Propel Nonprofits at a lower interest rate. Propel Nonprofits also used a forgivable loan product that will enable HOTB to convert part of it to a grant if it is able to contribute to a bank account dedicated to creating a cash reserve— thus using financial instruments to aid the organization in building capital for both its own present stability and future growth. Read the full HOTB case study .

“Good” collateral isn’t critical to make a good loan.

If the leadership, strategy, and business model are strong, it’s worth looking beyond a lack of traditional “good” collateral when formulating a loan.

St. Paul Neighborhood Network (SPNN), a nonprofit with a mission of building community through media, was forced to move out of its downtown St. Paul home in 2015 on short notice. Propel Nonprofits worked with SPNN after a new home was identified and provided them with both a bridge and term loan to fund the move, operations, and technological investments. With technical and consulting assistance from Propel Nonprofits, budgets for 2016 and the following year were based on financial discipline, combining cuts in expenses with diversifying revenue. Because of strength in leadership, strategy, and business model, Propel Nonprofits ascertained that its loan was right for SPNN despite an absence of “good collateral.” Read the full SPNN case study .

PHOTO CREDIT: MICHAEL SLOBODIAN

About the Author

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Get your nonprofit set up for success with a nonprofit business plan

How to Write a Nonprofit Business Plan in 12 Steps (+ Free Template!)

The first step in starting a nonprofit is figuring out how to bring your vision into reality. If there’s any tool that can really help you hit the ground running, it’s a nonprofit business plan!

With a plan in place, you not only have a clear direction for growth, but you can also access valuable funding opportunities. 

Here, we’ll explore:

  • Why a business plan is so important
  • The components of a business plan
  • How to write a business plan for a nonprofit specifically

We also have a few great examples, as well as a free nonprofit business plan template.

Let’s get planning!

What Is a Nonprofit Business Plan?

A nonprofit business plan is the roadmap to your organization’s future. It lays out where your nonprofit currently stands in terms of organizational structure, finances and programs. Most importantly, it highlights your goals and how you aim to achieve them!

These goals should be reachable within the next 3-5 years—and flexible! Your nonprofit business plan is a living document, and should be regularly updated as priorities shift. The point of your plan is to remind you and your supporters what your organization is all about.

This document can be as short as one page if you’re just starting out, or much longer as your organization grows. As long as you have all the core elements of a business plan (which we’ll get into below!), you’re golden.

Why Your Nonprofit Needs a Business Plan

While some people might argue that a nonprofit business plan isn’t strictly necessary, it’s well worth your time to make!

Here are 5 benefits of writing a business plan:

Secure funding and grants

Did you know that businesses with a plan are far more likely to get funding than those that don’t have a plan? It’s true!

When donors, investors, foundations, granting bodies and volunteers see you have a clear plan, they’re more likely to trust you with their time and money. Plus, as you achieve the goals laid out in your plan, that trust will only grow.

Solidify your mission

In order to sell your mission, you have to know what it is. That might sound simple, but when you have big dreams and ideas, it’s easy to get lost in all of the possibilities!

Writing your business plan pushes you to express your mission in the most straightforward way possible. As the years go on and new opportunities and ideas arise, your business plan will guide you back to your original mission.

From there, you can figure out if you’ve lost the plot—or if it’s time to change the mission itself!

Set goals and milestones 

The first step in achieving your goals is knowing exactly what they are. By highlighting your goals for the next 3-5 years—and naming their key milestones!—you can consistently check if you’re on track.

Nonprofit work is tough, and there will be points along the way where you wonder if you’re actually making a difference. With a nonprofit business plan in place, you can actually see how much you’ve achieved over the years.

Attract a board and volunteers

Getting volunteers and filling nonprofit board positions is essential to building out your organization’s team. Like we said before, a business plan builds trust and shows that your organization is legitimate. In fact, some boards of directors actually require a business plan in order for an organization to run!

An unfortunate truth is that many volunteers get taken advantage of . With a business plan in place, you can show that you’re coming from a place of professionalism.

Research and find opportunities

Writing a business plan requires some research!

Along the way, you’ll likely dig into information like:

  • Who your ideal donor might be
  • Where to find potential partners
  • What your competitors are up to
  • Which mentorships or grants are available for your organization
  • What is the best business model for a nonprofit like yours

With this information in place, not only will you have a better nonprofit business model created—you’ll also have a more stable organization!

Free Nonprofit Business Plan Template

If you’re feeling uncertain about building a business plan from scratch, we’ve got you covered!

Here is a quick and simple free nonprofit business plan template.

Basic Format and Parts of a Business Plan

Now that you know what a business plan can do for your organization, let’s talk about what it actually contains!

Here are some key elements of a business plan:

First of all, you want to make sure your business plan follows best practices for formatting. After all, it’ll be available to your team, donors, board of directors, funding bodies and more!

Your nonprofit business plan should:

  • Be consistent formatted
  • Have standard margins
  • Use a good sized font
  • Keep the document to-the-point
  • Include a page break after each section
  • Be proofread

Curious about what each section of the document should look like?

Here are the essential parts of a business plan:

  • Executive Summary: This is your nonprofit’s story—it’ll include your goals, as well as your mission, vision and values.
  • Products, programs and services: This is where you show exactly what it is you’re doing. Highlight the programs and services you offer, and how they will benefit your community.
  • Operations: This section describes your team, partnerships and all activities and requirements your day-to-day operations will include.
  • Marketing : Your marketing plan will cover your market, market analyses and specific plans for how you will carry out your business plan with the public.
  • Finances: This section covers an overview of your financial operations. It will include documents like your financial projections, fundraising plan , grants and more
  • Appendix: Any additional useful information will be attached here.

We’ll get into these sections in more detail below!

How to Write a Nonprofit Business Plan in 12 Steps

Feeling ready to put your plan into action? Here’s how to write a business plan for a nonprofit in 12 simple steps!

1. Research the market

Take a look at what’s going on in your corner of the nonprofit sector. After all, you’re not the first organization to write a business plan!

  • How your competitors’ business plans are structured
  • What your beneficiaries are asking for
  • Potential partners you’d like to reach
  • Your target donors
  • What information granting bodies and loan providers require

All of this information will show you what parts of your business plan should be given extra care. Sending out donor surveys, contacting financial institutions and connecting with your beneficiaries are a few tips to get your research going.

If you’re just getting started out, this can help guide you in naming your nonprofit something relevant, eye-catching and unique!

2. Write to your audience

Your business plan will be available for a whole bunch of people, including:

  • Granting bodies
  • Loan providers
  • Prospective and current board members

Each of these audiences will be coming from different backgrounds, and looking at your business plan for different reasons. If you keep your nonprofit business plan accessible (minimal acronyms and industry jargon), you’ll be more likely to reach everyone.

If you’d like, it’s always possible to create a one page business plan AND a more detailed one. Then, you can provide the one that feels most useful to each audience!

3. Write your mission statement

Your mission statement defines how your organization aims to make a difference in the world. In one sentence, lay out why your nonprofit exists.

Here are a few examples of nonprofit mission statements:

  • Watts of Love is a global solar lighting nonprofit bringing people the power to raise themselves out of the darkness of poverty.
  • CoachArt creates a transformative arts and athletics community for families impacted by childhood chronic illness.
  • The Trevor Project fights to end suicide among lesbian, gay, bisexual, transgender, queer, and questioning young people.

In a single sentence, each of these nonprofits defines exactly what it is their organization is doing, and who their work reaches. Offering this information at a glance is how you immediately hook your readers!

4. Describe your nonprofit 

Now that your mission is laid out, show a little bit more about who you are and how you aim to carry out your mission. Expanding your mission statement to include your vision and values is a great way to kick this off!

Use this section to highlight:

  • Your ideal vision for your community 
  • The guiding philosophy and values of your organization
  • The purpose you were established to achieve

Don’t worry too much about the specifics here—we’ll get into those below! This description is simply meant to demonstrate the heart of your organization.

5. Outline management and organization

When you put together your business plan, you’ll want to describe the structure of your organization in the Operations section.

This will include information like:

  • Team members (staff, board of directors , etc.)
  • The specific type of nonprofit you’re running

If you’re already established, make a section for how you got started! This includes your origin story, your growth and the impressive nonprofit talent you’ve brought on over the years.

6. Describe programs, products and services

This information will have its own section in your nonprofit business plan—and for good reason!

It gives readers vital information about how you operate, including:

  • The specifics of the work you do
  • How that work helps your beneficiaries
  • The resources that support the work (partnerships, facilities, volunteers, etc!)
  • If you have a membership base or a subscription business model

Above all, highlight what needs your nonprofit meets and how it plans to continue meeting those needs. Really get into the details here! Emphasize the work of each and every program, and if you’re already established, note the real impact you’ve made. 

Try including pictures and graphic design elements so people can feel your impact even if they’re simply skimming.

7. Create an Executive Summary

Your Executive Summary will sit right at the top of your business plan—in many ways, it’s the shining star of the document! This section serves as a concise and compelling telling of your nonprofit’s story. If it can capture your readers’ attention, they’re more likely to read through the rest of the plan.

Your Executive Summary should include:

  • Your mission, vision and values
  • Your goals (and their timelines!)
  • Your organization’s history
  • Your primary programs, products and services
  • Your financing plan
  • How you intend on using your funding

This section will summarize the basics of everything else in your plan. While it comes first part of your plan, we suggest writing it last! That way, you’ll already have the information on hand.

You can also edit your Executive Summary depending on your audience. For example, if you’re sending your nonprofit business plan to a loan provider, you can really focus on where the money will be going. If you’re trying to recruit a new board member, you might want to highlight goals and impact, instead.

8. Write a marketing plan

Having a nonprofit marketing plan is essential to making sure your mission reaches people—and that’s especially true for your business plan.

If your nonprofit is already up and running, detail the work you’re currently doing, as well as the specific results you’ve seen so far. If you’re new, you’ll mostly be working with projections—so make sure your data is sound!

No matter what, your Marketing Plan section should market research such as:

  • Beneficiary information
  • Information on your target audience/donor base
  • Information on your competitors
  • Names of potential partners

Data is your friend here! Make note of market analyses and tests you’ve run. Be sure to also document any outreach and campaigns you’ve previously done, as well as your outcomes.

Finally, be sure to list all past and future marketing strategies you’re planning for. This can include promotion, advertising, online marketing plans and more.

9. Create a logistics and operations plan

The Operations section of your business plan will take the organizational information you’ve gathered so far and expand the details! Highlight what the day-to-day will look like for your nonprofit, and how your funds and resources will make it possible.

Be sure to make note of:

  • The titles and responsibilities of your core team
  • The partners and suppliers you work with
  • Insurance you will need
  • Necessary licenses or certifications you’ll maintain
  • The cost of services and programs

This is the what and how of your business plan. Lean into those details, and show exactly how you’ll accomplish those goals you’ve been talking about!

10. Write an Impact Plan

Your Impact Plan is a deep dive into your organization’s goals. It grounds your dreams in reality, which brings both idealists and more practically-minded folks into your corner!

Where your Executive Summary lays out your ambitions on a broader level, this plan:

  • Clarifies your goals in detail
  • Highlights specific objectives and their timelines
  • Breaks down how you will achieve them
  • Shows how you will measure your success

Your Impact Plan will have quite a few goals in it, so be sure to emphasize which ones are the most impactful on your cause. After all, social impact is just as important as financial impact!

Speaking of…

11. Outline the Financial Plan

One of the main reasons people want to know how to write a nonprofit business plan is because of how essential it is to receiving funding. Loan providers, donors and granting bodies will want to see your numbers—and that’s where your Financial Plan comes in.

This plan should clearly lay out where your money is coming from and where it will go. If you’re just getting started, check out what similar nonprofits are doing in order to get realistic numbers. Even if you’re starting a nonprofit on a tight budget , every bit of financial information counts!

First, map out your projected (or actual) nonprofit revenue streams , such as:

  • Expected membership contributions
  • Significant donations
  • In-kind support
  • Fundraising plan

Then, do the same with your expenses:

  • Startup costs
  • Typical bills
  • Web hosting
  • Membership management software
  • Subscription
  • Costs of programs

If your nonprofit is already up and running, include your past accounting information. Otherwise, keep working with those grounded projections!

To make sure you have all of your information set, include documents like:

  • Income statement
  • Cash flow statement
  • Balance sheet

This information comes together to show that your nonprofit can stay above water financially. Highlighting that you can comfortably cover your operational costs is essential. Plus, building this plan might help your team find funding gaps or opportunities!

12. Include an Appendix

Your appendix is for any extra pieces of useful information for your readers.

This could be documents such as:

  • Academic papers about your beneficiaries
  • Publications on your nonprofit’s previous success
  • Board member bios
  • Organizational flow chart
  • Your IRS status letter

Make sure your additions contribute to your nonprofit’s story!

Examples of Business Plans for Nonprofits

Here are two great examples of nonprofit business plans. Notice how they’re different depending on the size of the organization!

Nonprofit Recording Co-op Business Plan

This sample nonprofit business plan shows what a basic plan could look like for a hobbyists’ co-op. If your nonprofit is on the smaller, more local side, this is a great reference!

What we like:

  • Details on running a basic membership model
  • Emphasis on what it means to specifically be a sustainable cooperative
  • A list of early milestones, such as hitting their 100th member
  • Clarification that all recordings will be legal

Nonprofit Youth Services Business Plan

This sample nonprofit business plan is for a much larger organization. Instead of focusing on the details of a membership model, it gets deeper into programs and services provided.

What we like

  • The mission is broken down by values
  • A detailed look at what each program provides
  • A thorough sales plan
  • Key assumptions are included for the financial plan

How to Create a Nonprofit Business Plan With Confidence

We hope this sheds some light on how creating a nonprofit business plan can help your organization moving forward! Remember: you know what you want for your organization. A business plan is simply a tool for making those dreams a reality.

Is a membership program part of your business plan? Check out WildApricot ’s award-winning membership management software!

With our 60-day free trial , you’ll have all the time you need to fall in love with what we have to offer.

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A nonprofit business plan ensures your organization’s fundraising and activities align with your core mission.

 Four people wearing green T-shirts and high-visibility yellow vests stand at a table outside a building, packing cardboard boxes. The two people on the left, both women with long curly hair, are packing a box with cans of food. The two people on the right, both men, are speaking to each other while the shorter man on the left looks down at a long, flat box.

Every nonprofit needs a mission statement that demonstrates how the organization will support a social cause and provide a public benefit. A nonprofit business plan fleshes out this mission statement in greater detail. These plans include many of the same elements as a for-profit business plan, with a focus on fundraising, creating a board of directors, raising awareness, and staying compliant with IRS regulations. A nonprofit business plan can be instrumental in getting your organization off the ground successfully.

Start with your mission statement

The mission statement is foundational for your nonprofit organization. The IRS will review your mission statement in determining whether to grant you tax-exempt status. This statement also helps you recruit volunteers and staff, fundraise, and plan activities for the year.

[Read more: Writing a Mission Statement: A Step-by-Step Guide ]

Therefore, you should start your business plan with a clear mission statement in the executive summary. The executive summary can also cover, at a high level, the goals, vision, and unique strengths of your nonprofit organization. Keep this section brief, since you will be going into greater detail in later sections.

Identify a board of directors

Many business plans include a section identifying the people behind the operation: your key leaders, volunteers, and full-time employees. For nonprofits, it’s also important to identify your board of directors. The board of directors is ultimately responsible for hiring and managing the CEO of your nonprofit.

“Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission,” wrote the Council of Nonprofits.

As such, identify members of your board in your business plan to give potential donors confidence in the management of your nonprofit.

Be as realistic as possible about the impact you can make with the funding you hope to gain.

Describe your organization’s activities

In this section, provide more information about what your nonprofit does on a day-to-day basis. What products, training, education, or other services do you provide? What does your organization do to benefit the constituents identified in your mission statement? Here’s an example from the American Red Cross, courtesy of DonorBox :

“The American Red Cross carries out their mission to prevent and relieve suffering with five key services: disaster relief, supporting America’s military families, lifesaving blood, health and safety services, and international service.”

This section should be detailed and get into the operational weeds of how your business delivers on its mission statement. Explain the strategies your team will take to service clients, including outreach and marketing, inventory and equipment needs, a hiring plan, and other key elements.

Write a fundraising plan

This part is the most important element of your business plan. In addition to providing required financial statements (e.g., the income statement, balance sheet, and cash flow statement), identify potential sources of funding for your nonprofit. These may include individual donors, corporate donors, grants, or in-kind support. If you are planning to host a fundraising event, put together a budget for that event and demonstrate the anticipated impact that event will have on your budget.

Create an impact plan

An impact plan ties everything together. It demonstrates how your fundraising and day-to-day activities will further your mission. For potential donors, it can make a very convincing case for why they should invest in your nonprofit.

“This section turns your purpose and motivation into concrete accomplishments your nonprofit wants to make and sets specific goals and objectives,” wrote DonorBox . “These define the real bottom line of your nonprofit, so they’re the key to unlocking support. Funders want to know for whom, in what way, and exactly how you’ll measure your impact.”

Be as realistic as possible about the impact you can make with the funding you hope to gain. Revisit your business plan as your organization grows to make sure the goals you’ve set both align with your mission and continue to be within reach.

[Read more: 8 Signs It's Time to Update Your Business Plan ]

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Business planning guidance for arts and cultural organisations

The purpose of this guidance is simple – to help you write the best business plan you can. It is based on preparing a business plan that:

  • collates and clarifies your business model(s)
  • is clear, coherent and realistic
  • has an appropriate level of ambition
  • is attractive to stakeholders, funders and investors

What has shaped this guidance?

In developing this guidance we have drawn on three main sources of inspiration and evidence: • our own experience of working with clients in the sector developing and implementing business plans • the wide range of available popular and academic literature on business planning for both the non-profit sector and organisations more generally – some key examples are listed in Appendix A • feedback from Arts Council England and other funders on their experiences of assessing business plans for potential funding

The world in which arts and cultural organisations operate is changing rapidly and in uncertain ways. Reductions in public funding, new models of funding such as commissioning, shifting policy priorities, localism and now Brexit are all transforming the funding landscape. The adoption of new technologies is remaking old industries and creating new ones.

We cannot control or predict the future but in trying to understand and plan for it organisations can help to shape that future and ensure that they remain relevant and therefore successful.

Who is this guidance for?

This guidance is for anyone who is involved in developing a business plan for a non-profit arts or cultural organisation, which includes micro organisations, small and medium enterprises (SMEs) and large scale organisations. It is therefore designed to cover a wide range of organisations with a breathtaking diversity of purposes and activity. The underlying principles of business planning remain the same whatever the focus of your organisation but you may have to adapt elements to your particular needs.

he guidance has not been written as an application ‘template’ that current or potential Arts Council-funded organisations should follow slavishly. It draws on good practice and you are encouraged to apply it appropriately. While the most common constitutional form will be that of registered charity and Company Limited by Guarantee, it is not assumed that this is the only model. The guidance therefore uses the terms ‘organisation’ and ‘business’, ‘board’ and ‘governing body’ interchangeably.

Who has produced this guidance?

The guidance has been produced by Dawn Langley (Alchemy Research & Consultancy) and Susan Royce who are both consultants in the creative and cultural sector. The guidance was commissioned by Arts Council England and is designed to provide independent advice and support.

Commissioned by Arts Council England

Download Business Planning Guidance in full (PDF)

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Nonprofit Business Plan: A Comprehensive Guide

  • by Jess Convocar on February 21, 2024
  • last update on February 22, 2024
  • Reading Time: 7 minutes

Nonprofit Business Plan: A Comprehensive Guide

Like any other business, nonprofit organizations need careful, structured planning to ensure sustainable growth. This is possible by creating a business plan that not only serves as a roadmap but also helps in attracting donors and volunteers needed to bring the organization’s vision to fruition.

Crafting the perfect business plan involves many things, but the most important part is understanding what it should look like and how it can help the organization forward its mission. This guide simplifies the process, breaks down its unique components, and provides step-by-step instructions on how to write a nonprofit business plan.

What is a business plan for nonprofits?

A business plan for nonprofits is a strategic document that outlines a nonprofit organization’s goals and operational approach. While similar to for-profit business plans, the focus here is on achieving social impact rather than financial profit.

Projects implemented by nonprofit organizations typically revolve around fostering social welfare, advocacy, education, or humanitarian aid. For instance, a nonprofit working to address homelessness might outline projects such as providing shelter and meals, offering job training programs, and collaborating with local agencies to advocate for affordable housing policies.

A typical business plan for nonprofits includes:

  • The nonprofit’s mission, which sets the foundation for the entire plan;
  • Specific objectives,
  • Fundraising strategies,
  • Resource allocation,
  • And how it plans to measure success in terms of societal or community benefit.

But one thing to note is that there is no one-size-fits-all plan. Every little detail incorporated into the plan must be tailored to the organization’s needs, where it currently stands, and how it can contribute to its primary purpose – guiding the nonprofit to success.

Why Your Nonprofit Needs a Business Plan

A good plan does not only help attract external support but also benefits the organization internally. Listed below are the key reasons why your nonprofit needs a business plan:

Clarity of Mission, Vision, and Strategic Direction

Running a nonprofit organization isn’t the easiest task, and there may be times when you question whether you’re truly making an impact. Having a business plan gives you a perspective of the progress you’ve made and provides a distinct path moving forward.

This clear-cut framework ensures that the mission, vision, and strategic direction remain focused, helping the nonprofit make informed decisions and navigate challenges with purpose.

Proper Resource Planning and Financial Management

Poor financial management can lead to many problems, especially in nonprofits. With a business plan, this can easily be taken care of.

Since nonprofit organizations rely on various external funds, there should be an emphasis on resource planning and management. This involves forecasting the organization’s needs, such as financial, human, and technological resources, and strategically allocating them to support the mission and vision. Doing so also demonstrates fiscal responsibility to donors and stakeholders.

Strategic Fundraising and Sustainability

One of the most common and effective ways nonprofits gain support is through fundraising activities. A business plan helps you develop a targeted fundraising strategy that aligns with the organization’s goals. Clearly outlining the fundraising objectives, target audiences, and specific tactics provides a roadmap for effective resource mobilization.

Additionally, a structured plan attracts and retains donors by instilling confidence in them about the tangible impact their contributions can make.

Risk Management

A business plan is vital for developing strategies to handle risks and potential challenges. This proactive approach helps minimize the impact of unforeseen events, like economic recessions or natural disasters, on the nonprofit’s operations.

A robust risk management strategy not only saves time and money but also improves decision-making , avoids surprises, and, most importantly, prevents harm to the people your nonprofit serves.

Legal and Regulatory Compliance

Because the business plan already lays out how the organization works, it’s easier to understand and adhere to nonprofit laws like tax exemption and revenue regulations.

Dealing with these things from the start helps prevent potential problems, maintains transparency, and builds trust with stakeholders. This allows you to focus on carrying out the mission without legal conflicts.

How to Create a Business Plan Strategy

steps to create a business plan strategy

When gearing up to create a business plan for your nonprofit organization, it’s important to begin by thoroughly understanding the unique aspects of your mission. This solid foundation will guide you through the next steps of crafting a well-thought-out plan, which includes:

1. Create a strategy

Before anything else, you must identify your why .

Ask yourself what you want to happen. What does the organization stand for? Who does it serve? What do you hope for it to become?

If your long-term goal is to create a lasting impact and expand the community you serve, establish a strategy that mirrors your mission. Begin by assessing your organization’s current position, strengths, weaknesses, and opportunities. Based on your assessment, leverage the strengths and address weaknesses that may hinder progress.

Next, clearly define who your target audience is. Understand their specific needs and preferences to tailor your approach effectively.

Once the key factors have been determined and written down, it will serve as the starting point for the strategy.

2. Plan programs

The planning step is where you delve into the how. What are your plans to sustain and amplify the impact you aim to create?

Since you are not selling products or providing services to generate revenue, you’ll need to rely on fundraising events to support your cause. To do this effectively, create detailed program plans covering goals, activities, timelines, and expected outcomes. As always, ensure these plans align with your organization’s mission.

After establishing the programs, set up a monitoring system that tracks their effectiveness and evaluates them regularly. This helps you make informed changes as the nonprofit or the community’s needs evolve.

3. Ensure financial sustainability

Nonprofits receive financial support from various channels, such as individual donations, grants, sponsorships, and fundraising events. To ensure economic sustainability, building relationships with potential donors, individuals, institutions, and various funding sources is important to avoid relying too much on a single avenue.

In this sense, a well-thought-out budget is crucial for financial stability. Make sure to allocate resources carefully, considering program costs, administration expenses, and other needs. A clear and transparent budget not only aids in financial planning but also boosts trust with supporters.

4. Prioritize legal considerations

Even though dealing with changing rules might seem to lead to more paperwork than focusing on your mission, remember that compliance is as important as pursuing your organization’s goals. Some vital legal considerations include:

  • Legal structure and registration
  • Tax exemption (if applicable)
  • Fundraising compliance
  • Financial accountability
  • Intellectual property (such as logos, trademarks, and copyrights)
  • Data protection and privacy

Maintaining a good standing is crucial for obtaining licenses, securing grants and funding, protecting your organization’s reputation, and keeping the right to solicit support.

If you don’t have an in-house legal counsel, it’s a good idea to seek advice from experts who know nonprofit laws in your area when planning your business.

How to Write a Nonprofit Business Plan

nonprofit business plan components

Now that you’ve covered all the essential details, the next step is to create the business plan outline. There’s no strict format to follow, as it all depends on your organization’s specifics. However, make sure not to exclude these essential components when creating a nonprofit business plan:

1. Executive Summary

This part is a quick overview of the whole document. Since it’s the first thing people see in the business plan, it’s crucial to make it clear and interesting enough to grab their attention and encourage them to read the entire plan. Include the organization’s fundamentals – its history, objectives, and financing plans.

2. Organizational Overview

Provide a gist of who you are and who you serve. Here, express the organization’s mission, vision, and specific short-term and long-term goals.

3. Products, Programs, or Services Rendered

In this section, you must provide a detailed description of all the products and services mentioned in the executive summary. Highlight any unique aspects, such as innovative features and distinct advantages, that set you apart. State how instrumental these are to the success of your initiatives and how each one addresses the industry need.

4. Operational Plan

This is where you detail how your nonprofit will function on a day-to-day basis. Outline each team member’s daily, weekly, and monthly tasks, specifying responsibilities, timelines, and collaboration points to ensure a cohesive and efficient operation.

Additionally, spotlight any key processes, workflows, or systems necessary to achieve your mission.

5. Marketing Plan

The marketing plan should reflect the mission of the organization. Under this section, outline the strategies and channels to get your nonprofit out there. Include details about your target audience, methods for reaching them, and any promotional activities. This section may also cover partnerships, collaborations, and outreach efforts.

6. Financial Plan

The financial plan provides a comprehensive overview of your nonprofit’s financial health and projections. Include a budget, funding sources, and a breakdown of how funds will be allocated to support your operations and programs. This part is vital for demonstrating sustainability and helping make better-informed decisions.

7. Appendix

In the appendix, incorporate all the additional documents and information supporting the business plan’s main body. This may include resumes of key personnel, detailed financial statements, legal documents, or any other relevant materials.

Here’s a quick step-by-step guide on how to write a business plan:

  • Start by outlining the executive summary providing a concise overview of the plan.
  • Develop the organizational overview, which includes the mission and vision of the nonprofit.
  • Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis to identify and address internal and external factors.
  • Clearly articulate short-term and long-term goals and objectives.
  • Describe the programs and activities that will help achieve these goals.
  • Develop a marketing and outreach strategy to engage the community and attract support.
  • Create a detailed financial plan, including budgets, revenue streams, and financial projections.
  • Outline the governance and management structure, including roles and responsibilities.
  • Detail monitoring and evaluation processes to assess program effectiveness.

Nonprofit Business Plan Template

Once you have a clear grasp of your organizational goals and strategies, here’s a sample nonprofit business plan template to get you started:

business plan arts nonprofits

Frequently Asked Questions (FAQs) on Nonprofit Business Plan

Q: how often should a non-profit business plan be updated.

Although nonprofit plans usually set up a roadmap for at least three to five years, they should be regularly reviewed and updated to ensure they remain relevant and aligned with the organization’s purpose and changing external factors. For younger companies, an annual update with six monthly reviews may be sufficient, while more established nonprofits might opt for an annual review with quarterly check-ins.

Q: What role does evaluation play in a non-profit business plan?

Smaller nonprofits often conduct formal evaluations because their funders require it, but the benefits extend in both directions. Internally, evaluations help the organization assess its performance, impact, and effectiveness. In doing so, the nonprofit meets funder expectations and gains valuable insights for improvement, ensuring transparency and better alignment with its mission.

Q: How can a non-profit maintain adaptability in its strategies?

To stay adaptable, a nonprofit can follow three basic practices. First, keep the business plan up-to-date to align with the changing goals and environment. Second, stay on top of current industry trends to anticipate shifts in the landscape and prepare ahead of time. Lastly, revamp tools and approaches to ensure strategies remain innovative and effective.

Plan for Nonprofit Success with Convene

man and woman writing a nonprofit business plan

A well-crafted nonprofit business plan is crucial for success. To achieve this, cooperation is necessary within the internal teams and partners. However, communication can be a common roadblock, especially in a remote workplace.

This is where Convene comes into play.

Convene is a reliable board portal for nonprofits that facilitates effective planning through its interactive and secure features. Easily collaborate with everyone in the organization by leveraging Convene’s live meeting capabilities, such as annotations and digital sign-offs. Also, keep track of the updates and reports with its secure document management features.

Check out this page to learn more about Convene and how it can benefit your nonprofit organizations.

Jess Convocar

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Business Plan Resources

We've put together a few resources to help you write a Business Plan, an essential component of starting or expanding a business, attracting investment or applying for a loan.

- Download a PDF of the handout from the Business Plan Essentials workshop that is a part of Springboard's Work of Art Toolkit .

- Read an article  (from BPlans) on How to Write a Business Plan for an Arts Business .

-  View sample plans (from BPlans) that might be helpful to look at for arts-related businesses:

Custom Quilt Artist Art School and Gallery Decorative Pottery Music Theater

-  Download a PDF of a Business Plan Template from BPlans.

Springboard Staff

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Step by step guide for starting a california nonprofit.

Emily-Chan

Attorneys Emily Chan and Gene Takagi explain the steps to starting a nonprofit in California.

Congratulations. You've got an idea for making the world a better place, and you want to start a nonprofit as the means to do so. The good news is that starting a California nonprofit isn't that hard to do if you have a sound plan, the right team, and sufficient startup capital.

The bad news is that running a successful nonprofit is not easy. You'll need to think through exactly how you will bring value to the public, obtain funds, attract staff and/or volunteers, build a board of directors, and comply with the laws that regulate nonprofits. Your answers to these questions will determine whether you should start a nonprofit or consider alternatives. More on these points later in this article.

Here are 10 basic steps for starting a California nonprofit public benefit corporation:

1. Determine the name of the corporation. A nonprofit is typically formed as a corporation and its name can be a valuable asset. In California, a corporation name may be adopted if the name is not the same as or too similar to an existing name on the records of the California Secretary of State, or if the name is not misleading to the public. You can check the current database of existing names in the business search page on the Secretary of State website ( http://kepler.sos.ca.gov/ ). You can also reserve a name for 60 days by mailing in a Name Reservation Request ( http://www.sos.ca.gov/business/corp/pdf/naavreservform.pdf ). You must also make sure the name does not infringe on another person’s trademark rights. This is not always easy to determine, but a good start includes running a trademark search on the U.S. Patent and Trademark Office database and a simple Google search. For some founders, it may also be important to confer with intellectual property counsel to help ensure they are not infringing on another’s rights and to protect their name from being used by other parties.

2. Draft and file the articles of incorporation . A corporation is legally created with the filing of the articles of incorporation. Articles of incorporation typically identify: 

(a) The organization’s name;

(b) Purpose or purposes of the nonprofit;

(c) Agent for service of process -- that is, a person whose name and address are identified and who can receive lawsuits and other official correspondence and other matters; and

(d) Any limitations on corporate powers.

The articles of incorporation are typically signed by an "incorporator," which can be just one person but may also be signed by the initial board of directors if they are named in the articles.

There are sample articles found on the Secretary of State’s website ( http://www.sos.ca.gov/business/corp/pdf/articles/arts-pb.pdf ). These are a good starting point but are not comprehensive guides on every important consideration. For example, the samples provide little guidance on specific purpose statements.

A word on specific purpose statements : A broad specific purpose statement provides room for the organization’s mission to evolve without requiring an amendment to the articles of incorporation. It may also make it easier to comply with charitable trust laws that require charitable funds be used consistent with the specific purpose of the organization at the time such funds were originally acquired. If, instead, you adopt a narrow purpose statement such as "to restore and maintain Pomponio State Beach," you can't use funds to restore any other beaches, but the statement would provide a stronger mission anchor to help ensure that your organization stays on a specific course after the founders have left.

For additional information on this issue, read Starting a Nonprofit: Articles of Incorporation and Specific Purpose Statements ( http://www.nonprofitlawblog.com/home/2012/11/starting-a-nonprofit-articles-of-incorporation-and-specific-purpose-statements.html ).

More about the agent for service of process : It is also important to understand that the agent is responsible for receiving lawsuits and possibly other important legal documents on behalf of the organization and making sure those documents reach the President or other authorized officer in a timely manner. If the agent fails to do so (e.g., fails to have his or her mail checked regularly while away for an extended period) the organization could face negative consequences such as losing a default judgment for not showing up to defend a lawsuit. An organization can identify an individual as agent or may elect to pay for a corporate agent, which may be preferred if there is no person willing to accept this responsibility or if privacy concerns are an issue (the agent’s street address will be a matter of public record).

3. Appoint the board of directors . If the initial directors are not named in the articles of incorporation, the incorporator can and should appoint the board through a written action.

Under California law, a nonprofit board may be composed of as few as one director, but the IRS is unlikely to grant 501(c)(3) status to a nonprofit with only one director and most nonprofits have anywhere between three and 25 directors.

These directors should understand their duties and responsibilities to act with reasonable care and in the best interests of the organization while providing direction and oversight over the organization’s activities, finances, officers, and legal compliance. BoardSource offers valuable resources on nonprofit corporate governance, including these Ten Basic Responsibilities of Nonprofit Boards ( http://www.boardsource.org/Knowledge.asp?ID=3.368 ).

4. Draft the bylaws and conflict of interest policy . A corporation’s bylaws typically address, at a minimum, fundamental provisions related to the management of the activities and affairs of the corporation. Bylaws should provide guidance to the board and reassurance of sound governance practices to government authorities, funders, and other interested stakeholders.

Bylaws typically contain specific provisions detailing:

(a) The purpose or mission of the nonprofit;

(b) How directors are elected or otherwise selected (e.g., by majority vote of directors at the annual board meeting);

(c) How the board may take an action (e.g., by majority vote of directors);

(d) How board meetings are called and noticed (e.g., six times per year with 14 days advance notice by email);

(e) How board meetings are conducted (e.g., the chair of the board presides);

(f) The officers of the corporation (a president or chair of the board, secretary, and treasurer or chief financial officer are required by California law);

(g) The duties and responsibilities of each officer;

(h) The authorization of board and non-board committees (e.g., committees tasked to act with the authority of the board versus committees that can only make recommendations);

(i) The level of indemnification provided by the corporation to protect its directors, officers and other agents; and

(j) The reports due to directors (e.g., financial reports).

If the nonprofit has voting members, the bylaws will also need to contain additional provisions regarding member rights and processes. Nonprofits considering a voting membership structure may want to first discuss such structure with a lawyer, particularly if they do not expect their members to actively participate in meetings and regularly exercise their voting rights. Public Counsel provides an Annotated Form of Bylaws for a California Nonprofit Public Benefit Corporation on its website ( http://www.publiccounsel.org/publications?id=0060 ).

Separately articulated policies commonly supplement the bylaws in addressing key governance and management issues. For example, although not required by federal tax law, it is considered to be a best practice for any nonprofit to have an adopted conflict of interest policy. Additionally, a nonprofit must describe its policy regarding conflicts of interest in the IRS Form 1023. Accordingly, it would be advantageous for most nonprofits to adopt a policy similar to the sample policy provided in Appendix A of the Instructions to Form 1023 ( http://www.irs.gov/pub/irs-pdf/i1023.pdf ).

5. Take the initial board actions at a board meeting or by unanimous written consent of the directors . The board should take the following actions:

(a) Adopt the bylaws and conflict of interest policy;

(b) Elect officers;

(c) Adopt a fiscal year (such as a year ending December 31 or June 30);

(d) Approve establishing a bank account;

(e) Approve applying for federal and state tax-exempt status;

(f) Approve reimbursement of startup expenses (if applicable); and

(g) Approve the compensation of the executive director (CEO) or the treasurer (CFO) (if applicable).

6. Obtain an employer identification number (EIN) . An officer or authorized third party designee may apply for and obtain an EIN online ( http://www.irs.gov/Businesses/Small-Businesses-& ;-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online).

7. File the initial registration form (Form CT-1) with the California Attorney General’s Registry of Charitable Trusts . This annual registration is required for the majority of nonprofit public benefit corporations and must be filed within 30 days after receipt of assets. The Form and Instructions are available online ( http://oag.ca.gov/charities/forms ). The corporation’s articles of incorporation and bylaws should be included in the initial filing. The Form 1023 application and federal determination letter (Step 9) should be submitted upon receipt of the determination letter to complete the filing. Check out this livestream webinar from the Attorney General's office on March 26th at 1pm:  https://oag.ca.gov/charities/initialregistration-live .

8. File the Statement of Information (Form SI-100) with the Secretary of State . The Statement must initially be filed within 90 days of the date of incorporation. This biennial filing requirement, which identifies the organization’s address, principal officers, and agent for service of process, can be filed online ( https://businessfilings.sos.ca.gov/ ) or by mail.

9. Apply for federal tax exemption with the Internal Revenue Service (IRS) and receive a determination letter from the IRS . Completing the Form 1023 application for exempt status under Internal Revenue Code (IRC) Section 501(c)(3) ( http://www.irs.gov/pub/irs-pdf/f1023.pdf ) may be the most challenging part of the startup process. It is a legally-driven and comprehensive inquiry covering 11 Parts and 8 Schedules. A critical section for careful completion is Part IV, Narrative Description of Your Activities, which asks ( http://www.irs.gov/pub/irs-pdf/i1023.pdf ):

For each past, present, or planned activity, include information that answers the following questions.

  • What is the activity?
  • Who conducts the activity?
  • When is the activity conducted?
  • Where is the activity conducted?
  • How does the activity further your exempt purposes?
  • What percentage of your total time is allocated to the activity?
  • How is the activity funded?
  • List any alternate names under which you operate, including any “aka” (also known as) or “dba” (doing business as) names.

Form 1023 also requires information regarding (a) organizational structure; (b) compensation and other financial arrangements with officers and directors, and certain highly paid employees and independent contractors; (c) members and other individuals and organizations that receive benefits from the organization; (d) organizational history (e.g., an organization that was spun off or previously fiscally sponsored by another organization may need to complete an additional schedule as a successor organization); (e) specific activities; and (f) actual and/or projected statement of revenues and expenses (which should be consistent with any identified activities).

Part X is designed to determine the organization’s classification as either a private foundation or a public charity. Public charity status is generally the more favorable tax status, but requires an organization to meet certain requirements. For most organizations, this means passing a public support test over a five-year measuring period. For organizations that will receive a large bulk of their support from few sources over their first five years, monitoring and managing of the public support ratio may be critically important. Public Charity Status Simplified (a little) is a helpful online resource from Insight Center for Community Economic Development ( http://www.insightcced.org/uploads/publications/legal/public_charity_status_simplified.pdf ).

The filing fee for Form 1023 is currently $850 for all but the smallest organizations.

The IRS may typically take 3-4 months or longer to process a Form 1023 application for exempt status. However, the waiting period may be much longer if the application contains errors, omissions, or other information that require additional development by a special IRS department. The IRS application process is further explained on its Where Is My Exemption Application website ( http://www.irs.gov/Charities-&-Non-Profits/Where-Is-My-Exemption-Application%3F ).

10. Apply for California tax exemption with the California Franchise Tax Board (FTB) and receive an affirmation of exemption letter from the FTB . Organizations with a 501(c)(3) federal determination letter can request California affirmation of tax exemption under California Revenue & Taxation Code section 23701d from the FTB by filing Form 3500A along with a copy of the IRS determination letter. The FTB will recognize the organization’s exemption from state income taxes as of the federal effective date. An organization that does not have a 501(c)(3) federal determination letter is otherwise required to file the more complicated Form 3500 for state income tax exemption. There is no fee for Form 3500A and a $25 fee for Form 3500.

You can find a downloadable form at

https://www.ftb.ca.gov/forms/misc/3500a.pdf

Do you need to work with an attorney to start a nonprofit?

Although the majority of nonprofits are set up without the help of lawyers, it's easy to make mistakes that become costly to correct later (such as unwisely creating voting membership structures, adding unlawful provisions to template bylaws, violating the commerciality doctrine, etc.). We recommend having experienced professionals involved -- such as attorneys, board members with nonprofit incorporation experience, and experienced consultants. Don't discount the value of a knowledgeable attorney.

Should You Start a Nonprofit?

Now that you know how to start a California nonprofit, you should thoughtfully consider whether this is the right choice for your ideas and for the public benefit. There may be other ways to carry out your dreams, including working under the umbrella of an existing nonprofit, See Alternatives to Forming a Charitable Nonprofit ( http://apps.americanbar.org/buslaw/blt/2009-07-08/takagi.shtml ). One often overlooked alternative is fiscal sponsorship, a relationship that may allow a group to house a charitable project within an existing nonprofit with the ability to spin it off at a later date. For more information on fiscal sponsorship, see Fiscal Sponsorship Basics from the Bar Association of San Francisco. ( http://www.sfbar.org/forms/vlsp/fiscal-sponsor-memo.pdf )

About Emily Chan and Gene Takagi:

Attorneys Emily Chan and Gene Takagi wrote this guide for the California Association of Nonprofits as part of their pro bono work.

Emily Chan , an associate with the NEO Law Group, was recognized as the 2012 Outstanding Nonprofit Lawyer – Young Attorney by the Nonprofit Organizations Committee of the American Bar Association. Gene Takagi is managing attorney of the NEO Law Group, an adjunct professor at the University of San Francisco, and contributing editor of the Nonprofit Law Blog.

You can reach them at www.neolawgroup.com or 415-977-0558.

More news for nonprofits here >

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The details on our privacy policy, site disclaimer, permission to reprint, permission to link, and where to report technical issues. [ Read more... ]

The California Nonprofit Performing Arts Grant Program is funded by the State of California and administered by the California Office of the Small Business Advocate (CalOSBA). Eligibility criteria applies.

PLEASE NOTE: Lendistry is the sole entity designated as the Intermediary of the California Nonprofit Performing Arts Grant Program (the “Program”). This site ( canonprofitperformingarts.com ) and the other websites available on or through this site (the “Designated Sites”) are the only approved websites designated for the administration of the Program. Any other website purporting to administer or otherwise act as an Intermediary in connection with the Program may be fraudulent. As such, you should exercise extreme caution and avoid providing any information (personal or otherwise) in connection with the Program on or through any website other than the Designated Sites. Further, neither Lendistry nor any of its partners will charge any fees to apply for a grant under the Program and we recommend that you avoid any third parties purporting to charge fees for you to apply.

This Program is now closed, and grant awards are no longer available.

Important information for 2023 tax returns, 1099 tax forms now available for download.

How can you retrieve your 1099 tax form? Your 1099 tax form is available at https://tax1099.com/edelivery/login . CLICK HERE for a guide on how to retrieve your 1099 tax form with step-by-step instructions.

This guide also provides information on your username and password that is needed to sign in. Once signed in, you may elect to opt-in to download your 1099 tax form electronically or opt-out to receive it by mail.

For assistance with accessing your 2023 tax form please contact Lendistry’s dedicated Customer Experience Team at (888) 870-2203 (Monday – Friday, 8:00 a.m.-5:00 p.m. PST) or [email protected] .

Important Note: Lendistry and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Readers should consult their own tax, legal and accounting advisors before completing their tax filings.

Important Deadlines

The application window for the California Nonprofit Performing Arts Grant Program will be closing on June 16, 2023.

To be considered for a grant award, applications must be submitted with all required documents uploaded to Lendistry’s Portal by the deadline.

Other Important Deadlines:

  • Applications that are approved for funding must sign their Grantee Agreement by June 22, 2023. Applications with unsigned Grantee Agreements after this deadline will not be funded.
  • All funding opportunities for this Program will end on June 30, 2023.

Important Note: Funding for this Program is limited. Being selected to move forward in the review process and/or fully validated does not guarantee you will receive a grant award. It is possible that the number of applicants that meet the eligibility requirements will exceed the available funds remaining.

Program Overview

The purpose of the California Nonprofit Performing Arts Grant Program was created to provide grants to eligible nonprofit performing arts organizations (see Definitions) to encourage workforce development. The Program includes $49,500,000.00 to be allocated in one or more rounds to eligible nonprofit performing arts organizations that meet certain criteria.

The Program requires these grants to be awarded on a first-come-first-served basis in specified amounts depending on the applicant’s annual gross revenue in the 2019 taxable year.

Grant moneys awarded under this Program shall only be used for the following:

1. Employee expenses, including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums;

2. Contributions or payments to a centralized payroll service;

3. Recruitment, training, development, and other human resources related expenses; and/or

4. Other operating expenses or equipment for employees.

Definitions

Definitions that pertain to this Program are provided below.

1. “ Eligible nonprofit performing arts organization ” means a registered 501(c)(3) nonprofit entity that satisfies the criteria for a qualified small business pursuant to subdivision (g) of Section 12100.82, with no more than two million dollars ($2,000,000) in annual gross revenue. An eligible nonprofit may be in one of the following North American Industry Classification System codes, as reported on the entity’s tax return:

  • 711110 – Theater Companies and Dinner Theaters;
  • 711120 – Dance Companies;
  • 711130 – Musical Groups and Artists; or
  • 711190 – Other Performing Arts Companies.

Eligibility Requirements

Grantees: Nonprofit Performing Arts Organizations

A nonprofit performing arts organization must satisfy the following criteria, at minimum, to be eligible to receive a workforce development grant under the California Nonprofit Performing Arts Grant Program:

1. Applicant satisfies one of the following:

i. meets the definition of an “eligible nonprofit performing arts organization” pursuant to Program guidelines, meaning that Applicant is registered as a 501c(3) nonprofit entity that satisfies the criteria for a qualified small business pursuant to subdivision (g) of Cal. Gov’t Code § 12100.82, has no more than two million dollars (≤ 2,000,000) in annual gross revenue, and is in one of the following North American Industry Classification System codes, as reported on the entity’s tax return:

711110 – Theater Companies and Dinner Theaters. 711120 – Dance Companies. 711130 – Musical Groups and Artists. 711190 – Other Performing Arts Companies; or

ii. serves as a fiscal sponsor for entities that meet the requirements set forth in subsection 1(i) above; and

2. Applicant, or in the case of a fiscal sponsor, such Applicant’s eligible, fiscally-sponsored organization began operating in the state prior to June 1, 2019, as evidenced by the eligible nonprofit performing arts organization’s official filing with the California Secretary of State.

Ineligible Businesses or Organizations

The following types of businesses or organizations are ineligible to receive a Grant Award under the Program:

  • a nonprofit entity not registered as either a 501c(3);  
  • a government entity (other than an entity owned and/or operated by a Native American tribe) or elected official office;   
  • a business or organization primarily engaged in political or lobbying activities;   
  • a passive business or organization, investment company or investor who files a Schedule E on its tax returns;  
  • a church or other religious institution, other than a school, child care, or other educational organization affiliated with a church or other religious institution where (i) greater than 50% of the gross annual revenue (as reflected on the entity’s most recent federal tax filing (2019)) is derived from the school, child care facility or other educational business and (ii) the grant funds will be used only for eligible costs and expenses directly related to the school, child care, or other educational organization, and no portion of the Grant Award will be used for any normal profit or overhead of the church or other religious institution;  
  • a financial business or organization primarily engaged in the business of lending, such as a bank, finance company or factoring company;  
  • a business or organization engaged in any activity that is illegal under federal, state or local law;  
  • a business or organization of a prurient sexual nature, including a business or organization which presents live performances of a prurient sexual nature or a business or organization which derives directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature;  
  • a business or organization engaged in any socially undesirable activity or activity that may be considered predatory in nature such as rent-to-own businesses or check cashing businesses;  
  • a business or organization that restricts patronage for any reason other than capacity, specifically any business that illegally discriminates patronage;  
  • a speculative business or organization, meaning a business or organization for the sole purpose of purchasing and holding an item until the market price increases or other business or organization principally engaged in risky activity for the chance of an unusually large profit, including but not limited to, (i) oil wildcatting, (ii) dealing in stocks, bonds, commodity futures, and other financial instruments and (iii) mining gold or silver in other than established fields;  
  • an eligible nonprofit performing arts organization (as defined in Section 6(a)(i) above) that is affiliated (as such term is defined in 13 C.F.R. § 121.103) with another Applicant;  
  • a business, organization, franchise, or location of which any executive director or equivalent senior managing officer of Applicant, or in the case of a fiscal sponsor, such Applicant’s eligible, fiscally-sponsored organization, has already applied for and received a grant under the Program;  
  • a publicly traded corporation, or a business or organization majority owned and controlled by a publicly traded corporation; or  
  • a business or organization that does not have (1) multiple clients providing income to the business or organization as demonstrated by multiple W-9 forms, invoices, purchase orders or (2) a business plan clearly stating a pathway to obtaining multiple clients and/or creating two (2) or more jobs.  

Grant Awards

Grants amounts will be awarded based on the annual gross revenue of the eligible nonprofit performing arts organization, or in the case of a fiscal sponsor, such sponsor’s eligible, fiscally-sponsored qualified nonprofit performing arts organizations.

Required Documents

For lendistry to review an application, applicants must upload all the following required documentation:, application certification, government-issued identification, proof of tax-exempt status 501(c)(3), proof of business organization.

(at least one of the following):

  • Articles of Incorporation;
  • Articles of Organization;
  • Business License;
  • Fictitious Business Name;

Proof of Revenues

(unaltered and filed 990 tax returns for 2019)

Fiscal Sponsor Agreement

In addition to the Fiscal Sponsor Agreement, the Fiscal Sponsor and Sponsee must download and sign an Affidavit attesting to the terms of the Sponsor/Sponsee relationship.

CLICK HERE to download the Affidavit.

This list is not exhaustive. Lendistry may contact you by email, phone, and/or text (if authorized) to request additional documentation to verify the information you submitted in your application.

Important Notes for Uploading Documents in Lendistry’s Portal:

  • All documents must be submitted in PDF format.
  • File size must be under 15MB.
  • The file name cannot contain any special characters (!@#$%^&*()_+).
  • You can only upload one file for each requested document. If a document requires you to upload multiple files, you will need to upload the files as a single ZIP file.
  • Please   download and save   the Application Certification before you fill it out.

Program and Application Guide

The Program and Application Guide includes an overview of the program, tips for applying, and step-by-step instructions on how to complete and submit the application.

Contact Our Call Center: 866-759-5320

Call Center Hours: Monday – Friday 7:00 a.m. – 7:00 p.m. PST

Closed on all Federal holidays.

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‘Dynamic Pricing’ for Burgers and Shakes? Wendy’s Will Give It a Whirl.

The company plans to introduce dynamic pricing as early as 2025 along with digital menu boards that would reflect price changes, Wendy’s chief executive said during a February earnings call.

A cyclist rides in front of a Wendy's fast food restaurant.

By Lola Fadulu

Maybe you are the type who enjoys biting into a warm, spicy chicken nugget from Wendy’s, and at $5.99 for a 10-piece in Midtown Manhattan, it is a tempting treat.

Soon, you may want to consider what time it is before you satisfy such a craving, because the fast-food chain is going to price those crispy chunks of meat and other menu items differently, depending on the time of day.

The company plans to begin testing dynamic pricing as early as 2025, Wendy’s president and chief executive, Kirk Tanner, said during a February earnings call.

The feature will be rolled out along with digital menu boards that would reflect the price changes; the company plans to invest approximately $30 million in those initiatives.

“We are always focused on improving the customer and crew experience, and in that spirit, we are leveraging technology in our restaurants even more,” Mr. Tanner said.

Mr. Tanner, who became the Wendy’s chief executive last month after a long career at PepsiCo, did not offer many details during the call on how much prices could change, or exactly how the dynamic pricing model would work.

Wendy’s customers expressed outrage on social media over the new strategy, with some even calling for a boycott. One quipped that she’d plan to get lunch at 11 a.m. or 3 p.m .

In a statement issued after this article was published online, Wendy’s said it had “no plans” to “raise prices when our customers are visiting us most.” Rather, the company said, the dynamic pricing plan “could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”

The announcement came as food inflation in the United States appeared to be cooling after two years of rapid growth . The cost of food at home rose in January, but at a much slower pace, and restaurant chains and other food providers have said that they are no longer raising prices as steeply. The cooling could be explained partly by consumers pushing back against rising prices and companies saying they have had to spend less for labor and packaging.

In adopting the pricing strategy, Wendy’s will join a number of other companies that have introduced dynamic pricing, often to the chagrin of customers.

Uber and Lyft, for example, charge more when demand outpaces the availability of cars on the road — during rush hour, for instance, or in bad weather. Concertgoers have also experienced dynamic pricing, with some Bruce Springsteen fans, for instance, finding that seats on Ticketmaster were costing upward of $5,500 when he returned to performing with his band after a yearslong hiatus.

Dynamic pricing has also been widely adopted in the commercial theater world , which has helped institutions that experienced losses to recover. But the variable prices could hurt new attendees, as they are likely the ones to be searching for tickets to a show at the last minute, when tickets become more expensive.

Many consumers have learned to take notice of changing prices. Before choosing where to eat, 81 percent of consumers check menu prices “always or often,” and half report noticing when restaurant prices have changed, according to a January 2023 survey of 901 U.S. consumers by Capterra , a company that connects businesses with software vendors.

Around 52 percent of those surveyed believed that dynamic pricing was price gouging, the Capterra survey said.

As for Wendy’s, its dynamic-pricing plan and the accompanying digital menu boards would help with sales growth while improving order accuracy and crew experience, Mr. Tanner said.

Wendy’s also plans to introduce menu changes that would be directed by artificial intelligence. The company announced in December that it would expand its use of a platform called Fresh AI , which it had made part of its drive-through experience to improve speed and accuracy, Mr. Tanner said.

Altogether, Mr. Tanner said, the technology has helped employees “to focus on what matters, preparing fresh high-quality Wendy’s favorites and building customer relationships.”

Lola Fadulu reports on the New York City region for The Times. More about Lola Fadulu

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Spring Training at Coachella:  AEG, the entertainment giant, is trying to organize large-scale training camps marketed to M.L.S. fans, as other sports have done. Will it work ?

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  3. The Ultimate Guide to Writing a Nonprofit Business Plan

    Step 3: Outline. Create an outline of your nonprofit business plan. Write out everything you want your plan to include (e.g. sections such as marketing, fundraising, human resources, and budgets). An outline helps you focus your attention. It gives you a roadmap from the start, through the middle, and to the end.

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