[Pocket PDF] Aly’s Business Plan for Nonprofit
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Imagine Aly on his neighbor’s porch in Durham, North Carolina, holding two coffees on a gray Thursday morning. Otis is 88, a retired loom fixer from the old Erwin Mills, and when Aly stands up to leave he says, “You’re the first person since Sunday who asked me a question.” That night Aly, 39, decides to start a nonprofit called Aly & Friends to help older people live their best life, and he types “business plan for nonprofit” into a search bar. What he found were grant templates. What he needed was a plan that could pay a salary, keep the free help free and still exist in two years.
Read the original story here.
Description
What a business plan for nonprofit founders has to prove
Aly brought the Momo Hero team one sentence: a Durham nonprofit that helps older people live their best life. Most templates behind a “business plan for nonprofit” search stop at the mission and a list of programs. Every US build we run is tested against the same target, $1,000 a month by month 3 and $10,000 a month by month 12. For a nonprofit that number is the operating surplus: revenue and gifts minus every cost, including the founder’s own salary. Nobody owns a nonprofit and nobody takes a distribution, so the surplus becomes a cash reserve and money for free programs.
Three more facts shaped the plan from day one. Income from programs that serve the charitable purpose of a 501(c)(3) is exempt from federal and North Carolina income tax, while payroll taxes still apply. Most nonprofits cannot use SBA 7(a) loans. And there are no shares to sell, so an investor round was never an option.
From a charity idea to a program line that pays for itself
Version one: donations and grants only
Volunteers visit lonely seniors for free and donors pay for it. SUP, the break-even model, listed the honest costs first: a modest salary for Aly, insurance that covers abuse and molestation claims, background checks, a coordinator once a few dozen seniors enroll, software and bookkeeping. At an average monthly gift of $25, the plan needed about 700 monthly donors within a year. Aly could name about 110 people he could ask personally, and grants take months to decide and rarely pay salaries.
Version two: paid companionship at home
Next came a $440 Friend Membership: the same trained friend every week for three hours, a mid-week call and a monthly photo for the family. Then the state rules. North Carolina requires a home care agency license for paid in-home companion visits, with a $560 fee, a policy manual and a review that takes months, before the first paid visit. After wages, payroll taxes, workers’ comp and mileage, each member left about $123 a month. The membership stayed in the plan, in a supporting role.
Version three: communities pay, stories travel
A retired activity director gave the plan its turn: half her residents never came to anything, and families kept asking what their parents did all week. So Friends Club was born, a weekly club sold to senior communities for $1,200 a month. The storytelling at its center became a national product: a $49 recorded Story Call and a $1,650 Life Story Book, five conversations turned into a hardcover with three copies, recorded in person or by video anywhere in the US.
