Platt Perspective on Business and Technology

Nonprofits and mission centered business plans

Posted in nonprofits, startups by Timothy Platt on December 23, 2009

I started posting to this category – Nonprofits a couple of days ago with an initial posting and this one in mind as a dual starting point. I wrote the first half of this starting point on social networking in support of a mission and this one turns to the issue of business plans and building a foundation to grow and develop from. I will go on to explore a few issues related to strategy and operations in a nonprofit context, among other things in future postings in this series.

Business plans are often thought of as a resource for early stage planning, development and execution for new organizations so I am also adding this to my Startups and Early Stage Businesses category and cite other postings there as relevant here too.

The first point to make here, which I can guarantee I will repeat is that nonprofits are first and foremost businesses. They are mission and vision driven and are often formed and operated with a goal of fulfilling significant and even vital social and societal objectives. But to succeed in that to any significant measure they have to select and prioritize their tasks and processes and their intermediate goals like any successful business would. And nonprofits are among the most demanding businesses as:

• Any and all income coming into a nonprofit is developed from the discretionary income of donors and potential donors.
• Products and services developed by nonprofits in return for funds received generally go to people and groups other than the ones that provide funding and income for the nonprofit – unlike most any other business where products and services go directly to those who pay for them and to their immediate families and/or their businesses.

Mission and vision, and compellingly presenting them through marketing and communications and with ongoing social networking and community development are crucial to making this work. But all operational and project-based efforts in support of that have to be business-like and business driven.

This becomes an issue where people enter into building new nonprofits as dreamers and visionaries but without the necessary business infrastructure experience or skills needed to make their dreams and visions work. This does not mean that there is no role for dreamers and visionaries. They are essential to the mix to make sure that that business infrastructure is organized to most effectively promote and support the underlying mission and vision. It does, however, mean that people with business and organizational backgrounds are needed too who can bring their skills, experience and energy to the table. And together, these two different but essential participant types have to:

• Develop an effective business plan as a resource for moving forward and for measuring and validating progress in that.
• While at the same time fleshing out the initial mission and vision in practical, economically and functionally reachable steps.

It is this demonstrable grounding in practicality while still honoring and acknowledging the larger, longer term goals that make a nonprofit compelling, both to the people that the nonprofit would reach out to help and to those it would reach out to for funding and volunteer support.

Vision and the passion needed to make it a reality do not always mesh smoothly with the sometimes more measured seeming pace of the business people who would set up and manage that side of the nonprofit, and conflicts can arise, and certainly where decisions are being made as to who will do what, and with what authority. Everyone has to be willing to cede ground and control over some things while taking on and managing others in the founding team. And this means setting egos aside and both in developing a sound business plan and in following through on it – even as realized circumstances call for realistic adjustments and in both steps taken and order of steps taken, and in timing.

Good business plans in this regard, always include more than one and generally include three scenarios for building the organization and getting it functionally going:

• Normative, most likely by initial expectations, plans and hopes.
• Favorable, where funding or other resource availability might be a bit better than initially expected, but only better within modest bounds.
• Less favorable, where reality brings set-backs and delays and where more time might be required to reach business operational and mission directed goals and in taking steps towards meeting them.

Everyone in the founding team has to understand this and be fully ready for less favorable scenario elements from their planning to happen as their working reality, and with a few unexpected problems and issues added in as well.

This posting is not about drafting a business plan per se. In this regard, nonprofit and for-profit organization business plans are the same insofar as both should outline and present plans for building solid, realistically grounded business foundations with essentially all the same parts and requirements regardless of profit status. This posting is about building for that mission with passion, but from a firmly grounded, calculated business foundation where developing a real and realistic business plan is crucial to making that happen. It is about bringing the visionaries and the business planners together to build viable, ultimately mission fulfilling organizations. And it is about building for that from a solid business-like foundation.

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  1. […] set out to repeat myself from posting to posting, but a couple of connected points that I raised in Nonprofits and Mission Centered Business Plans also serves as a basic starting point for this posting as well. I observed that nonprofits are […]

  2. Toi Odonoghue said, on January 19, 2010 at 12:37 pm

    I like your weblog a lot. Will read all. Keep up to marvelous info on it. Thanks

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