How to write a business plan for a small charity

Typical businesses use a plan to secure funding by sharing it as a proposal to investors or forming part of an application to the bank for a loan. For a charity, though, there might be other uses to putting together a business plan. These may include the ability to set out a direction for your organisation or look for sizable donations, which may require you to share a plan.

This guide will make sure that you can get on with reaching your social objectives by showing you how to write a business plan for a charity. It includes:

• Description of charity
• Explaining the audience
• SWOT analysis
• Financial projection

For a social enterprise (charity), the business’ objectives are different from usual companies. Typical companies may aim to create wealth for the owner, for example. But, according to the UK Government, to be legally considered a charity, your organisation must have a charitable purpose. So the first thing to include in your business plan should be these aims.

If you can make it clear what the objectives of your business are, it provides a greater incentive for people to donate. It might also be helpful to explain why it’s the purpose you chose. With an objective, you should also describe how the organisation plans to help it. For example, if your charity aims to help blind people, they may look to fund guide dogs to be provided for them.

The other key element of your description of your charity should be how you plan to fund it. You may sell products, provide services or ask for donations. There may be other charities helping a similar cause, so you should also describe what makes you unique that will make people want to donate.

Charities rely on funding to fulfil their objectives. Without it, you may struggle to help those you would like to. As a result, running the organisation requires some business thinking. For example, identifying a target audience most likely to donate or pay for products/services shows that you are more likely to reach your goals.

To find your audience, you may have to carry out market research. Speak directly to those affected by the issue you aim to solve and those interested in helping your charity. You can gather information through surveys and interviews to find out as much as possible about your market. Another way to do this is by looking at similar charities’ focus and who they target.

It may be helpful for you to put together a customer profile (sometimes called customer avatar) to use your findings from your market research productively. By having a hypothetical person to think about, you can find insights for where you should be marketing to them and why they would donate. 

A customer profile could include:

• A name
• Age
• Gender
• Family
• Location
• Occupation
• Interests

Putting these details together helps you describe how you plan to market your charity.

For more information on how to market your small business, see: How to Market Your Small Business Effectively: 9 Top Tips

It is essential to understand where the current position of your charity is to help you plan for the future. To think about all aspects of your business, you can do a SWOT analysis. This technique focuses on your strengths, weaknesses, opportunities and threats.

Your organisation’s strengths should provide the reasons that your charity is likely to achieve its goals. For example, you could mention the quotes and information of those who would benefit you in your marketing.

There are likely some weaknesses your charity may have. Identifying them lets you talk about how you will get over them. For example, if you lack experience in financial management, mention that you plan to use an app like Countingup to make it easier.

If you show that there are opportunities your organisation can take advantage of, it might give more confidence to someone willing to donate. For example, if a sports event is coming up later this year that relates to your cause, maybe you could partner with them.

Like any business, there may be potential threats to your charity. But by mentioning them, you can also say how you plan to avoid them. For example, if you sell donated things and you run out, mention your plans to make other things to sell.

Even though the primary purpose of the business is not to make a profit for the owners, it’s still essential that the charity covers its costs and makes enough to fund its social activities. So, it could be helpful to provide your business plan with some calculations to reassure those looking to donate towards your organisation that it will go towards a successful venture.

A sales forecast estimates the sales you expect. Multiply your planned prices for products, services or typical donation amounts by the number of customers you expect. Put this to a timescale of a month, quarter or year. You can refer to your projections in later stages and compare your performance.

This section may also be helpful for you to detail what the business would be hoping to use donations for specifically. For example, you may pay a marketing agency for a social media campaign if someone provides significant assistance. If you have a smaller donation, though, that may reach your particular objective.

It is important for your financial projection to be accurate and for you to monitor whether your business is sticking to your expectations. That’s why thousands of business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, you can see exactly where your costs are going in your charity. To make sure that you can fulfil the objectives of your organisation, cash flow insights let you receive reports about your finances. You can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 
Find out more here.