Routes to finance
Webinar “Engaging Business in Your NPO” (January)
Charity is a kind of business. This is why it includes IRS status before applying for tax-exempt status.
Although there are significant differences between a non-profit organization and a non-profit organization, many of the same rules apply. And nonprofits need comprehensive planning as much as they do business.
One of the most important tasks for any starting up nonprofit business should be developing a business plan.
How can a non-profit organization use a business plan?
You will need a business plan for:
- persuading major donors or foundations to fund you,
- engaging board members so they know what they are getting
- so that serve as a compass for your organization so that you don't go crazy.
- to apply for a business loan, especially if you decide to set up a shop, gift shop, or other venture to help fund your programs.
The business plan must grow and change as your organization matures, becomes more complex and requires more challenges.
Things to include in a business plan
A business plan can be used throughout the life of your non-profit organization, just as an organization does. A startup business plan can be quite short, and a business plan for a mature non-profit organization can be quite lengthy.
Financial planning in NPOs
Business plan of a non-profit organization
All legal entities can be conditionally divided into two large groups: - organized for the purpose of making a profit; - non-profit charities.
Non-profit organizations are needed for cultural, educational, scientific purposes, for health protection, sports development and satisfaction of other non-material needs of citizens.
These organizations have their own peculiarities of functioning, in particular, the business plan of a non-profit organization is drawn up in a special way. The income part includes all sources of funds in the form of money or property; in the expenditure part, items are formed for which these funds are used.
The difference between revenues and expenditures is savings or budget deficits. The income of such organizations includes: - admission or membership fees; - donations; - earmarked funds.
To cover the budget deficit, a non-profit organization can engage in entrepreneurial activities in the same area as the main one.
Charity Business Plan
The business plan below is for a nonprofit company that does charity work and raise money to fight spinal cord disease. In addition, this organization organizes ice hockey competitions for high school and college students.
The business plan she has prepared has two main goals - funding research through charitable activities and standardizing the tournament procedure in order to simplify it, which will make it possible to organize similar events in other cities and, therefore, significantly increase the amount of funds ...
Every 35 minutes, one person hears a terrible sentence that he will never be able to walk again. More than 10,000 people face this a year.
A charitable foundation was approved to help fund research on ways to combat spinal cord disease.
2. Non-profit organizations (NPO)
3. Information on plastics processing
3. The importance of recycling waste plastics
3. Stages and methods of recycling plastic waste
4. Stages of project implementation
4. Organization characteristics
4. Technical and economic data of equipment
4. Financial and economic feasibility study of investments
- Non-profit organizations
Civil law divides all the variety of legal entities into two large groups: commercial and non-commercial organizations (NPO). The basis for such division is the purpose of the activity carried out by the organization, and it does not matter whether this activity is profitable, non-profitable or unprofitable. A non-profit organization is an organization that does not have profit-making as the main goal of its activities and does not distribute the received profit among its participants. NPOs can be created to achieve social, charitable, cultural, educational, scientific and managerial goals, in order to protect the health of citizens, develop physical culture and sports, meet the spiritual and other intangible needs of citizens, protect the rights, legitimate interests of citizens and organizations, resolve disputes and conflicts, the provision of legal assistance, as well as for other purposes aimed at achieving public goods.
The legal basis for the activities of such organizations is the Federal Law “On Non-Commercial Organizations”, the Federal Law “On Public Associations”. There are also a number of other laws regulating the activities of NPOs in more specific cases. NPOs can exist in the form of public and religious organizations (associations), communities of indigenous peoples, Cossack societies, social, charitable and other foundations, state corporations, non-profit partnerships, private institutions and autonomous NPOs. Public associations can be registered in the form of public organizations, movements, foundations, institutions, bodies of public initiative and political parties. Thus, the concepts of "public association" and "non-profit organization" overlap (both can exist in the form of a public organization or foundation), but the former is broader. The creation of some organizational and legal forms of NPOs is regulated by separate legislative acts.
NPOs can carry out entrepreneurial activity only insofar as it serves to achieve the goals for which it was created. Such activity is recognized as the profitable production of goods and services that meet the goals of creating an NCO, as well as the purchase and sale of securities, property and non-property rights, participation in business companies and participation in limited partnerships as a contributor.
The activities of some forms (all public associations) of NPOs are allowed without state registration, but the organization does not acquire the status of a legal entity, cannot own or on the basis of other material rights, separate property. Only having the status of a legal entity, an organization can, on its own behalf, acquire property and non-property rights, bear obligations (be a participant in civil turnover, conduct economic activities), be a plaintiff and a defendant in court. Legal entities are required to have an independent balance sheet or estimate, a bank account, be registered with tax and other control and accounting government bodies.
All legal entities can be conditionally divided into two large groups:
- organized for profit;
Non-profit organizations are needed for cultural, educational, scientific purposes, for health protection, sports development and satisfaction of other non-material needs of citizens. These organizations have their own peculiarities of functioning, in particular, the business plan of a non-profit organization is drawn up in a special way.
The income part includes all sources of funds in the form of money or property, in the expenditure part, items are formed for which these funds are used. The difference between income and expenses is savings or budget deficits.
The income of such organizations includes:
- entrance or membership fees;
To cover the budget deficit, a non-profit organization can engage in entrepreneurial activities in the same area as the main one. The tax is paid only on the amount of the excess of income over expenses.
For example, a business plan for a non-profit organization in the form of a charitable cultural foundation would look like this.
Two founders contributed 100 thousand rubles each, premises 100 sq. meters, furniture and office equipment for a total of 900 thousand rubles, total initial funds 1 million rubles.
During the month, the premises hosted 4 art history classes for schoolchildren and two exhibitions with a paid entrance, where books about art were sold.
- organization of exhibitions - 300 thousand rubles;
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Business plan of a non-profit organization
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Conventionally, all legal entities are divided:
- Organized for profit.
- Organized for non-profit and charitable activities.
Non-profit organizations (NPOs) are needed for:
The business plan of a non-profit organization should be drawn up in a special way in view of the difference in their functioning. The income part includes all sources of funds that come in the form of money or property, the expenditure part forms the items for using these funds. Savings or budget deficits are the difference between income and expenses.
NPO carries out its activities on the basis of an annual estimate of income and expenses, the form of drawing up is arbitrary.
Estimated income generation:
Replenishment of the income part from entrepreneurial activity occurs when there is a shortage of income from other sources. A non-profit organization is engaged in entrepreneurial activity to cover the budget deficit in the same area as its main activity. To plan their size, you need a business plan for a non-profit organization.
The received profit from such activities is directed only for statutory purposes, in this case tax will be paid exclusively on the amount of excess of income over expenses.
The business plan of a non-profit organization assumes: