How to Write a Charity Business Plan in 5 Easy Steps

Starting up your own charity or non-profit organisation can be extremely rewarding, but it’s important to set up a strong foundation before you even think about diving into fundraising. Planning ahead is the best way to ensure you’re having the biggest impact on your cause.

Although not run like a business in the traditional sense, charities definitely benefit from having a sound business plan – plus, it’ll make it easier to launch your charity and secure funding in the long run. Here’s exactly how to write your charity business plan in 5 easy steps.

Why Do Charities Need a Business Plan?

Ultimately, a business plan is an important document for a charity because it sets out your goals and the strategies you’ll be using to achieve these goals. Like a business makes a business plan to ensure it will be profitable, a charity makes a business plan to ensure it can benefit those it sets out to benefit. 

Step 1: Say Who You Are

The first two sections of your business plan are your executive summary and charity description. In the executive summary, you’ll need to outline:

• Your personal details
• Your charity idea
• Your mission, goals and aims
• The type of organisation you’d like to set up

You’ll then go into more detail in your charity description, where you can talk about where your charity idea came from and why you believe it’s important to raise funds for this untapped cause.

You’ll also need to think about where you’ll be based and the advantages and disadvantages of this location.

Describe what you hope to achieve in the first, second and third years of your charity running, showing both ambition for your organisation but also that you know what is realistic to be able to achieve.

You may also want to brush on some of your unique selling points (USPs), explaining why your charity is necessary in the current climate and what makes you stand out from similar charities who may be raising awareness and funds for similar or the same cause.

Step 2: Understanding Your Market

It’s important to show that you’ve completed the necessary market research to understand how feasible your goals actually are. As well as knowing that there’s a community or group of people who would benefit from the funds raised for your charity, you also need to know that people will be willing to donate to you to create those funds in the first place.

Use polls or ask people face-to-face about their opinion on your cause, asking how much or how often (if at all) they’d be willing to donate to support you.

Furthermore, it’s important to know who else is raising awareness or funds for the same or a similar cause – in the business world, these would be known as your competitors. Check out what they’re doing and how you could do it better or target a more niche demographic of donors. It’s also great to look at other kinds of successful charities, who may not necessarily be supporting the same cause as you, for inspiration as to what works and what doesn’t.

We recommend completing a SWOT analysis as part of your market research. This helps you to identify yours and your competitors’ strengths, weaknesses, opportunities and threats, giving a well-rounded view on where exactly you’d sit in the current market.

Step 3: Day-to-Day Operations

Next, you’ll need to get into the specifics of the day-to-day running of your charity. For this section, you should outline:

• Any resources you’ll need to run your charity
• Suppliers and other organisations you’ll work with
• Premises of your charity
• Equipment you’ll use
• Your process for taking payments from donors
• Any legal requirements like licenses you’ll need, e.g. for preparing food 
• Any insurance you have or will need

You’ll also need to write a small biography for each person who is important to the running of your charity, including their role and their experience showing why they’re perfect for the role. Important people include the management team and any trustees. If this is set to change in the immediate future, make sure to include an overview of any planned changes to your management structure.

Finally, using your SWOT analysis, write down any skills gaps you have in your team and how you plan to fill these gaps.

Step 4: Social Impact

Whereas a regular business would need to see a financial return, a charity also needs to show a social impact. This is the difference you make for the communities and people you work with, and one of the most important parts of your charity business plan.

As well as saying what kind of impact you want to achieve for your chosen cause, you’ll also need to state what you’re going to measure to prove this impact and how you’re going to measure it. And, not forgetting, how you’ll use your learnings to keep adapting your processes.

Another important question to ask yourself for this section is: how are people going to find out about your charity? Luckily, we’ve come up with 20 budget-friendly charity marketing ideas to help give you some inspiration!

Step 5: Finances

In this section, you’ll need to outline your costs and expenditure. As great as your charity idea is, it’s nothing without a well-thought-out financial forecast.

You’ll need to include:

• Predicted costs and expenditure (using research to back this up)
• Main source of income (donors, trustees etc. and what you’d expect them to give)
• Pricing strategy if you plan on selling products or services to fund your charity
• Cash flow forecasts
• Costs table

By preparing for all eventualities with your business plan, you’re turning your charity idea into a reality - and that’s something you should be really proud of. We hope this guide has given you plenty of information to include in your business plan, and you can always view our 10-step checklist for writing a business plan for more information on this.