The importance of writing a business plan for your charity

Charities and companies have different aims, but a business plan gives a charity that important quality, accountability, writes Issy Freeman

Issy Freeman

As with any organisation, a charity’s success takes careful planning. A business plan allows an organisation to set out its aims and objectives and a direction for the future, and to give those on the outside an insight into its purpose. I sit on the board for Kidscan, which is currently writing its first business plan, benefiting the charity, its staff and the people it ultimately aims to help.

Charity organisations are understandably proud of their non-commercial aims, but a business direction is crucial to success. On a basic level, a charity must think like a business with a different goal: where a corporation aims to make profit, a charity aims to benefit those in need. The end goals are not the same, but until the point of providing help where it is needed it is important to approach the management of a charity as you would that of a business.

So a business plan should be approached as if it were for any company, setting out aims and objectives for the short, medium, and long terms. Once the framework of a traditional business plan is set up, areas such as fundraising activity and staff plans can be built around it.

The main reason a charity should have a business plan is accountability. Charities deal with money donated for use in a charitable way, and a business plan helps a charity to ensure this happens by mapping out how that money can be best put to use. The plan helps to ensure that objectives are clear and that everyone within the organisation is working towards a common goal.

The most valuable advice I could give here is to keep the plan simple. External factors such as a change of government can have a sudden impact on charities and, although it is advisable to have an overall strategy and clear aims, the focus should be on the short-to-medium term. Plans should be kept concise, and I would recommend laying out objectives for the next five years at most. For example, some charities can become dependent upon government grants that disappear when recession strikes, meaning a new plan will need to be written. Bearing in mind the volatility of the sector, a charity should always be open and willing to review its business plan at short notice.

No charity should be daunted by the idea of a business plan. Searching online to see what others have done is perfectly acceptable within the sector. Commerciality is not a concern for most charities, and there is little point wasting precious time imagining what a business plan might look like when examples abound on the internet. Where assets are freely available, charities should not be shy to grab with both hands.

As they will ultimately be held accountable, trustees should be given the main and final say in what goes into the business plan, and their skills and experiences in other areas should be used to the charity’s advantage. Once written, a business plan should be shared with trustees and staff at all levels. Keeping everyone aware of and moving towards its goals, a charity that follows its plan should find that it – and those who need it – keep moving in the right direction.

Issy Freeman, an HR director, is a trustee for the children’s cancer research charity Kidscan

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