How A Nonprofit Business Plan Saved The Red Cross

This is why creating a financial plan is critical to your nonprofit business plan. Non profit business plans can help you understand.

How A Nonprofit Business Plan Became A Globally Well-Known Brand

It’s a common misconception that not-for-profits don’t need a nonprofit business plan. 

On the contrary, nonprofit organization needs a business plan if they plan to secure management, monetary, or volunteer support. 

Furthermore, a well-planned business will help you convey your purpose, goals, and even achieve federal nonprofit business status.

But, a nonprofit business plan isn’t just for startups. In fact, struggling nonprofits have overhauled their business plan to go on and become a globally well-known brand. 

We’ll look at how one nonprofit achieves just that today, and you just might have heard of them before. 

The Red Cross

The Red Cross is a humanitarian organization that reaches more than 100 million people across the globe through various services. 

Some of these services include disaster relief, support of military families, lifesaving blood donations, health and safety services, and international services. 

What you may not know is that just over a decade ago, The Red Cross was in serious trouble. They were operating at a $209 million deficit. Their IT systems were completely outdated, operations were inefficient, and fundraising was at an all-time low.  

Enter Gail McGovern, who became the organization’s CEO and President in 2008. In a suffering financial state, she developed a more effective nonprofit business plan that transformed the organization into what it is today. 

Nonprofit business plans: Providing sustainable funding and financial stability 

Without funding, your nonprofit idea is nothing more than that – an idea. And without a plan to manage those funds, you’ll soon find yourself in the same position as the Red Cross was in a decade ago. 

This is why creating a financial plan is critical to your nonprofit business plan. Non profit business plans can help you understand: 

  • The level of funding you need to stay operational.
  • How you can maintain that threshold.
  • How to provide the public with transparency – they’ll want to know where their donations are going! 

How a new financial plan helped The Red Cross

McGovern’s new plan revitalized the once failing company by: 

  • Eliminating an operating deficit of more than $200 million within two years. 
  • Addressing the fall in demand for blood products, while still allowing the Red Cross Blood Services to provide 14,000 units each day. 
  • Restructuring and consolidating the company’s chapter network. This reduced duplication in management and gave the company wiggle room to reinvest in their services. 

The new financial plan also helped the company increase donations from various donors by 22%. Furthermore, McGovern established The Red Cross as a model for donor transparency. Because of the plan, management knew exactly where every dollar was spent or reinvested. This allowed them to share more details with donors.

Improved services and scalability through research and innovation 

You have the idea. You have the funding. Now how will you make all the work happen? That’s exactly what an operational plan tells you. 

This critical component of a nonprofit business plan tells investors and donors how you’ll maintain your program and determine its impact. It also gives a bird’s eye view on the day-to-day workings of your organization. 

A business plan for your nonprofit can help you keep track of: 

  • Any legal requirements you must meet (appropriate certificates and licenses). 
  • Any insurance you will need.
  • Partners and suppliers you work with.
  • Areas of improvement in your company (growth in technology, supporting growing networks and demand).

McGovern’s new plan fuelled innovation for The Red Cross 

When she created her new nonprofit business plans, McGovern was able to take a critical look at the operations of The Red Cross. When she did, she made improvements by: 

  • Modernizing almost every information technology system, company-wide. 
  • Implementing strict protocols surrounding their blood missions, per FDA regulations. Safety and monitoring compliance was perfected, as well as industry standards in labeling. 
  • Developing a new disaster response management system called RC View. An interactive “event wizard” that better targets needs to help more people, faster. 
  • Creating a faster new way of providing financial assistance via apps and e-payments. These apps meant RC was able to provide money to 573,000 households during Hurricane Harvey. 

All of these innovations were no doubt important to helping the Red Cross’s humanitarian efforts. They also had significant value to the organization itself. Following the business plan-fueled changes, RC remedied all of its government evaluated nonconformance. It was then released from a 22-year coverage of the FDA’s Consent Decree. 

Refocusing efforts to establish a well-trained workforce


Nonprofits are about advocacy, furthering social causes, and meeting humanitarian needs. That begins with the people that work within them. 

A nonprofit business plan is not complete without a section dedicated to your team. It should describe who is crucial to your institution and also give you a plan for expanding your team as your nonprofit grows. 

For the Red Cross, an already established entity, McGovern focused her efforts by: 

  • Introducing formal career training for current employees. She based this on practices used in the for-profit sector. 
  • Arranged a process that attracted more volunteers and improved the RC’s recruitment and training.
  • Augmented the process to engage more local volunteers to respond to local disaster relief efforts. This resulted in a four-year boom in the number of volunteer hours in crucial areas. 
  • Encouraged more employment opportunities and retention programs for veterans and service members. These hiring practices earned the Red Cross designation as a Military Friendly Employer in 2017. 

How nonprofit business plans reenergized the mission of The Red Cross.

It is perhaps the most important part of any business plan. The Executive Summary gives an introduction to a nonprofit. It presents your mission, your purpose, and summarizes how you intend to carry out that mission. 

Gail McGovern drafted a fresh Executive Summary. One that called for the nonprofit to embrace innovation and change. Her goal was to make The Red Cross better prepared for their current and future challenges. 

In the 10 years since McGovern developed a new business plan, the Red Cross has become more responsive, effective and resilient. Her mission statement restructured the Red Cross and transformed it into a globally successful and recognized brand that helps millions of people today. 

How nonprofit business plans can benefit your endeavor. 

The Red Cross’s success story is one we can all learn from. At Bargain Business Plan our writers are experienced in crafting nonprofit business plans that will ensure the funding you need, as well as providing the framework to support your company’s potential growth. 

Your plan can be a roadmap to sustainable success, allowing you to meet the humanitarian needs of people locally or worldwide. 

Skip the growing pains experienced by The Red Cross with Bargain Business Plan. Contact us today for a consultation with your nonprofit business. 

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