Looking for a nonprofit organization business plan? You're in the right place.
A nonprofit that raises money and gives it away has to answer questions a for-profit never faces. How much does it cost to raise a dollar? Which gifts can only go to grants, and which can pay the rent? What happens to the donors it won in year one? A generic template has no answers to these, and a funder or a board will ask.
This article walks through a complete sample plan for a community foundation in Baltimore, Maryland, section by section, and ends on the financials: five years of income, spending, cash and net assets, with a downside case.
What you'll get from it:
- The funding mix: see how restricted and unrestricted income differ, which gifts can carry overhead and which can only go out as grants
- Donor retention: follow a first-year donor class through five years and see what repeat giving does to the campaign line
- The cost of raising a dollar: learn how to work out fundraising cost per dollar and split spending into program, management and fundraising
- The start-up reserve: find out how much cash a grantmaker needs to carry a loss-making first year and uneven gift timing
- The registration rules: see where Maryland charity registration and IRS public-charity status enter the plan, with dated sources
- The downside case: have an answer ready for "what if gifts come in 20% short?", with the steps the board takes in response
A foundation or any fundraising nonprofit can use this plan to see how the pieces fit together before drafting its own. The organization is fictional.
In this plan
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Executive Summary
Community First Foundation is a Baltimore community foundation that opens on January 1, 2027. It raises an annual campaign and holds donor-advised funds for local donors, and it pays small grants of $5,000 to $25,000 to neighborhood organizations out of a Neighborhood Grants Fund. Angela Rivers is the founding executive director. The foundation is organized as a Maryland nonprofit corporation and applies for recognition as a 501(c)(3) public charity.
Start-up money is $750,000, all of it gifts: $650,000 from six founding donors with no restrictions and a $100,000 launch grant. Of that, $640,000 is held as an operating reserve, $60,000 pays for the office fit-out and equipment, and $50,000 covers legal work, registration and the launch.
| 2027 | 2028 | 2029 | |
|---|---|---|---|
| Income | $941,601 | $1,342,640 | $1,685,950 |
| Operating result before founding gifts, after start-up costs | ($185,435) | ($55,306) | $23,446 |
| Closing cash | $439,650 | $362,535 | $368,775 |
The foundation opens 22 donor-advised funds and 400 campaign donors in 2027, and ends that year holding about $3.0 million for donors, $1.5 million of it under gift agreements signed by six founding families before opening. It pays $300,000 in grants in the first year. The $750,000 of founding gifts is contribution income and is not in the result row above. Without it the first two years show a deficit, because staff and the registration and audit costs arrive before repeat donors and fund fees do, and 2029 is the first year in surplus. The 2027 result, leaving out restricted Grants Fund money not yet paid out, is a loss of $245,435. The founding gifts cover it.
Two ratios are tracked from day one. Fundraising costs 29 cents for each dollar of campaign, event, grant and operating-grant income in 2027 and 24 cents by 2031. On campaign and event income alone the figures are 69 cents and 42 cents. Program services take 58.9% of spending in 2027 and 65.4% in 2031.
A downside case is included. If every source of income runs 20% short and the board slows hiring, trims marketing, cuts the executive director's pay and pays out less in grants, cash stays positive in every year. A second case, with half as many funds and weaker donor retention, is shown beside it.
What the Foundation Is
Legal name: Community First Foundation, Inc., a Maryland nonprofit corporation. Status: applying for 501(c)(3) recognition as a public charity; the application is filed in the first month. Premises: 2,400 square feet of leased office space in downtown Baltimore. Opening date: January 1, 2027. Stage: pre-launch. The lease is in draft, the founding gifts are covered by signed agreements and 11 board members have agreed to serve.
Purpose
Make giving in Baltimore easier for local donors and put small, fast grants into neighborhood organizations that larger funders overlook.
Goals to the end of 2028
- Open 44 donor-advised funds holding about $6.0 million.
- Pay $730,000 in grants over the two years, in 69 awards.
- Hold fundraising cost at 29 cents or less per dollar raised in 2027 and 28 cents in 2028.
- Reach a team of six full-time staff, with the budget back in surplus in 2029.
What the foundation offers
| Line | How it works | 2027 income share |
|---|---|---|
| Annual campaign and major gifts | Unrestricted gifts from individuals, run on a yearly calendar | 29% |
| Giving day and gala | Two events a year, a June giving day and an October gala | 13% |
| Fund administration | 1.00% a year of balances in donor-advised funds | 1% |
| Neighborhood Grants Fund | Corporate and foundation gifts restricted to small grants | 38% |
| Partner operating grants | Two foundations back the staff and the office | 19% |
Who oversees it
The Maryland Secretary of State registers charitable organizations in the state. A charity must register and receive a registration letter before it solicits contributions there, and it files an annual report afterwards (Maryland Department of Legislative Services fiscal note on SB 354, enrolled April 2026). The IRS recognizes 501(c)(3) status on Form 1023, which carried a $600 user fee on the IRS's published FAQ at the time of writing and is paid at pay.gov. Counsel confirms both fees and forms before filing.
Baltimore's Giving Market
Who lives here
The Census Bureau's July 1, 2025 estimate for Baltimore city is 569,997 residents. The 2020 to 2024 American Community Survey puts median household income at $62,177, against $80,734 for the country, and 19.7% of residents in poverty, against 10.6% nationally. The city has donors and a large unmet need, and the two sit in different neighborhoods. The foundation is built to connect them.
The established competitor
The Baltimore Community Foundation is the obvious comparison. ProPublica's Nonprofit Explorer, drawing on its 2024 tax filing, reports total assets of $314 million for it. The new foundation does not compete on scale. Its $3.0 million held at the end of 2027 is about 1% of that. It competes on speed and focus: grants decided in a single cycle of six weeks, and a neighborhood-level focus for donors who want to see where their gift lands.
What fundraisers cost
The Bureau of Labor Statistics reports a median annual wage of $72,550 for fundraisers and $80,390 for social and community service managers, both for May 2025. The foundation's wages sit near those. A Baltimore executive director at $108,000 and a director of philanthropy at $84,000 are priced above the median because both run portfolios of funds and major donors.
Who else asks donors for money
| Alternative | What a donor gets | Why a donor picks it | How the foundation differs |
|---|---|---|---|
| National sponsors of donor-advised funds, run by financial firms | Low-cost account and online giving | Convenience, brand | Local staff who know the grantees, and visits to them |
| Other Baltimore charities | A direct gift to a cause | Direct relationship with the program | One gift can be split across many neighborhood groups |
| The established community foundation | Large scale, many staff | Reputation and size | A six-week grants cycle and visits to every neighborhood grantee |
| A donor's own private foundation | Full control | Family legacy | None of the legal and filing cost; the foundation does the compliance |
The table describes categories and does not rank them. Fee schedules change and are not quoted here.
Strengths, weaknesses, opportunities, threats
| Strengths | Weaknesses |
|---|---|
| Founding donors committed before opening | A new name with no track record of grants |
| Local focus on small grants that arrive in weeks | Loss-making in the first two years |
| Staff hired with fundraising and grants experience | Gala income is lumpy and costly |
| Opportunities | Threats |
|---|---|
| Professional advisers who need a local home for client funds | Larger sponsors cutting fees to win funds |
| Business owners selling companies and looking to give | A weak year for markets cutting fund balances and fees |
| Corporate partners who want neighborhood reach | Partner foundations that do not renew |
Donors and Grantees
Four groups the foundation answers to
Individual donors. Local residents who give $100 to $1,000 to the annual campaign. They give in response to a mailing, an email, a friend or the giving day.
Major donors. Thirteen people in 2027 who give $10,000 on average. They expect to hear from the executive director and to see where the money goes.
Fund holders. Families and business owners who open a donor-advised fund with at least $25,000 and recommend grants from it. Legal control of the assets stays with the foundation. The IRS describes a donor-advised fund as a fund maintained by a 501(c)(3) sponsoring organization, with the sponsor holding legal control and the donor having advisory input.
Grantees. Neighborhood organizations with annual budgets under $500,000, applying for $5,000 to $25,000. Most have no development staff and cannot wait months for a decision.
Donor retention
The campaign line depends on keeping donors, not only winning them. The plan sets retention at 28% in the second year, rising to 47% by the fifth as donors who have given twice become likelier to give again.
| 2027 | 2028 | 2029 | 2030 | 2031 | |
|---|---|---|---|---|---|
| Donors who gave in the year | 400 | 672 | 855 | 1,016 | 1,138 |
| Of them, kept from prior year | – | 112 | 255 | 376 | 478 |
| Of them, new | 400 | 560 | 600 | 640 | 660 |
| Retention of prior-year donors | – | 28% | 38% | 44% | 47% |
| Average gift | $350 | $370 | $390 | $410 | $430 |
| Gifts from individuals | $140,000 | $248,640 | $333,450 | $416,560 | $489,340 |
| Major donors (average gift) | 13 ($10,000) | 19 ($11,000) | 25 ($12,000) | 30 ($12,500) | 34 ($13,000) |
| Gifts from major donors | $130,000 | $209,000 | $300,000 | $375,000 | $442,000 |
| Annual campaign and major gifts | $270,000 | $457,640 | $633,450 | $791,560 | $931,340 |
Restricted and unrestricted money
Gifts to the Neighborhood Grants Fund and the partner operating grants are restricted, the first to grantmaking and the second by time. They cannot pay for the annual campaign or the gala. Only the campaign, the events and fund fees are unrestricted. In 2027 that is 43% of income, $401,601, against payroll of $481,965, so the staff are carried by the time-restricted operating grants and the founding gifts as well. Grants Fund gifts pay grants and nothing else: the plan asks partners for no administrative share, and counsel may agree one in later pledge letters. By 2031 the unrestricted share is 61%.
Donor acknowledgments
Every gift of $250 or more gets a written acknowledgment. The IRS says it must name the organization and the amount, and it must say whether goods or services were given in return and what they were worth. Gala ticket receipts therefore state the value of the dinner.
Winning Gifts and Funds
The first year, in order
January: the founding donor circle meets and the first operating-grant instalment arrives. March: the first Grants Fund partners pay. June: the giving day. September to November: the fall grants cycle, the gala and the year-end appeal. The director of philanthropy takes every first conversation with a prospective fund holder.
Where 22 funds come from
| Source of fund holders | Funds opened in 2027 |
|---|---|
| Founding board and donor circle (signed agreements, $1.5 million) | 6 |
| Attorneys, accountants and wealth advisers who refer clients | 8 |
| Business owners planning a sale or an estate | 5 |
| Campaign donors who move to a fund | 3 |
| Total | 22 |
The six founding funds average $250,000 and the other 16 about $94,000, so 22 funds hold $3.0 million at December 2027, a $136,000 average. The plan opens 22, 26, 28 and 30 funds in the next four years, for 44, 70, 98 and 128, holding $6.0 million, $9.5 million, $13.5 million and $18.0 million. Balances are net of grants recommended and of market moves, and no fund closures are modeled. Fees at 1.00% of balances rise from $11,601 in 2027 to $157,500 in 2031.
How grants are awarded
Applications are open twice a year. The program officer reviews about 90 in 2027, the grants committee of the board chooses about 30 and each award averages $10,000. Awards are paid within 30 days. By 2031 the Fund pays about 56 grants averaging $13,000.
Funders of the Neighborhood Grants Fund
Seven corporate and foundation partners give a combined $360,000 in 2027, paid in four instalments in March, June, September and November. Three of the seven have signed pledge letters, covering $190,000; the other four are in discussion, and the first grants cycle is sized to what is signed. Each pledge letter states that the gift is restricted to grantmaking.
Why the gala stays small
The gala brings in $100,000 in 2027 and costs 40 cents for each dollar. It is kept because it also introduces new donors and fund holders, not because it is the cheapest way to raise a dollar.
Donor Acquisition Budget
Marketing spend and what it buys
Marketing in 2027 is $60,000: $24,000 of launch spend paid from start-up money and $36,000 of running costs. That is 6.4% of 2027 income. Across 400 new campaign donors it comes to $150 each, against a $350 average first gift, so the first gift does not pay for the donor. Repeat giving does, which is why retention drives the plan.
| Channel | 2027 spend | Result expected | Cost per result |
|---|---|---|---|
| Direct mail, two appeals | $9,000 | 140 campaign donors | $64 |
| Online giving, email and paid social | $8,000 | 110 campaign donors | $73 |
| Annual report and grantee stories (print and photography), supporting peer asks | $5,000 | 110 campaign donors | $45 |
| Gala invitations and sponsor materials | $3,000 | 40 campaign donors | $75 |
| Adviser breakfasts for fund referrals | $7,000 | 8 funds opened through advisers | $875 per fund |
| Giving day promotion | $4,000 | Gifts counted in events income | – |
| Running costs | $36,000 | 400 campaign donors and 8 adviser funds |
An adviser-referred fund opens at about $94,000 and pays a fee of about $940 a year, so a breakfast's cost per fund is repaid in roughly a year if the fund stays. Launch spend adds $12,000 for the website with online giving and fund-application pages, $4,000 for the brand and $8,000 for the founding-donor dinner.
Marketing milestones
- January 2027: website live and the founding donor circle meets.
- June 2027: giving day raises $20,000 and adds donors.
- October 2027: gala, 160 guests.
- December 2027: 400 campaign donors, 22 funds, $3.0 million held.
Running the Foundation
The downtown office
2,400 square feet at $27 a square foot a year, $64,800, with a meeting room for donors and a workshop room for grantees. The lease runs five years. The same space serves the foundation through 2031.
How a gift moves through
Gifts arrive by check, card or transfer of securities. The operations manager records each one against a fund or a campaign, and the donor services team sends the acknowledgment within five working days. Donor-advised fund assets sit in pooled portfolios managed by an outside investment firm under a policy set by the investment committee. The manager's fee is charged to the funds, and it is not in the operating budget.
Systems
A donor database with online giving, a grants-management system that tracks each application from receipt to final report, and accounting software with fund-level reporting. Software costs $28,000 in 2027 and $44,000 by 2031.
Compliance
- Maryland registration before the first solicitation. Under 2026 legislation effective July 1, 2026, a registering charity files an audit if gross contributions in the last fiscal year are at least $1,000,000 and a review if they are at least $400,000, per the Maryland fiscal note on SB 354, a secondary summary that counsel and the Secretary of State should confirm against the enacted statute. Before fund contributions, 2027 contributions come to about $930,000. Gifts into donor-advised funds are contributions too, so the foundation budgets an audit from the first year.
- Public-charity status. The IRS classifies most community foundations as publicly supported charities under sections 509(a)(1) and 170(b)(1)(A)(vi). The public-support test caps what any one donor counts for, so a concentrated gift may not all count as public support. The $650,000 of founding gifts comes from six donors; counsel reviews the test before the exemption application and again as the first campaign results come in, and the plan relies on the campaign, events and fund holders to broaden support quickly.
- Donor-advised funds. The IRS lists section 4966 excise taxes among its remedies against sponsoring organizations and fund managers, so the gift acceptance policy and the grant-recommendation review are written with counsel.
- Annual Form 990, filed by the operations manager with the auditor.
- Insurance: directors and officers, general liability, cyber, crime and workers' compensation, $14,000 in 2027.
Who does the work
Four staff in January 2027, five from April, six at the end of 2028, seven in 2029 and eight in 2030. Hires follow income, and the downside case shows which are delayed or dropped.
Board and Staff
Angela Rivers, founding executive director
Angela spent twelve years in Baltimore nonprofits, the last five as director of development at a youth-services organization with a $3 million budget. She raised its annual campaign and ran its gala. She has not run a grantmaking program or held donor-advised funds, which is why the program officer and the director of philanthropy are hired in January.
Where the team is thin
No one on the opening team has managed a pooled investment portfolio. The investment committee, chaired by a founding board member who is a chartered financial analyst, and an outside investment firm cover that. The foundation has no in-house legal counsel and uses a retainer.
If Angela is out
The director of philanthropy holds the major-donor and fund-holder relationships and can run the foundation for a short absence. The board's executive committee signs grants in her place.
The board
Eleven volunteer directors, none paid. Three committees: investment, grants and audit. Directors give or raise at least $2,500 a year each, which supplies part of the campaign line.
Outside help
An audit firm with community-foundation clients, a Baltimore law firm on retainer, and the Maryland Nonprofits association for training and benchmarks.
What a funder or lender would ask to see
- Pledges. Signed gift agreements for the $650,000 of founding gifts, and pledge letters from three of the seven Grants Fund partners, $190,000 of the $360,000 planned for 2027.
- Policies. A board-approved gift acceptance policy before the first gift: cash and publicly traded securities are accepted, other assets only after review, and a donor-advised fund opens at $25,000 or more. A fund with no grant recommendation in 24 months is reviewed by the grants committee.
- Investment policy and spending. Fund assets sit in pooled portfolios under a policy the investment committee sets with an outside manager. The foundation's own reserve is held in cash and short-term Treasury securities. The Grants Fund pays out gifts within 24 months of receipt; the plan's lag is shorter.
- The fee. The 1.00% fee is a plan figure. Peer foundations publish their own schedules, which were not retrieved for this plan, and the board compares them before launch.
- If partner grants end. The two operating grants are 19% of 2027 income and 7% of 2031 income. If renewals do not come in 2030, the board freezes the second senior program officer and the communications manager roles, and the plan's downside shows the foundation holding cash with those hires dropped.
Money In, Money Out
Five years of income and spending follow, built from one model: monthly for 2027, yearly after that. The model covers the foundation's own operating funds. Money passing through donor-advised funds is left out except for the fee the foundation earns on it, because an auditor would carry those balances on the statements as separate lines and they would bury the operating picture. Contributions into the funds are therefore not in the income table, and the spending ratios below show the cost of fundraising both with and without them.
Founding gifts and the opening reserve
| Use of funds | Amount |
|---|---|
| Office fit-out: donor meeting room, grantee workshop space | $32,000 |
| Computers, phones, AV for events and board meetings | $28,000 |
| Legal: incorporation, IRS exemption application, gift acceptance and fund agreements | $24,000 |
| Maryland charity registration and local licences | $2,000 |
| Launch: website with online giving, brand, founding-donor dinner | $24,000 |
| Operating reserve (Year 1 deficit and pledge timing) | $640,000 |
| Total uses | $750,000 |
| Source of funds | Amount |
|---|---|
| Founding gifts: operating reserve (without donor restrictions) | $650,000 |
| Launch grant (restricted to set-up and the first year) | $100,000 |
| Total sources | $750,000 |
Start-up money is $750,000, all of it gifts and none of it borrowed: $650,000 from six founding donors with no restrictions, backed by signed gift agreements, and a $100,000 launch grant that can be spent only on set-up and the first year. Under U.S. accounting rules for not-for-profits (FASB Accounting Standards Update 2016-14), gifts like these are contribution revenue and net assets are reported in two classes, with and without donor restrictions. The model has no owners, so its equity lines map to net assets: paid-in capital is the founding gifts and the launch grant, and retained earnings is the running total of the yearly operating result. The founding gifts are not in the income table, so the net-income lines are the operating result before them. Accounts receivable is pledges receivable. There are no owner distributions and, as a 501(c)(3), no income tax. The reserve is $640,000, well above the lowest 2027 month-end balance, because it also has to carry the 2028 deficit and keep unrestricted cash near two months of spending through 2028; $100,000 less would leave about one and a third months. Gifts arrive in lumps: a giving day in June, a gala in October, a year-end appeal, four Grants Fund payments and two operating-grant instalments.
What the budget rests on
- The annual campaign draws 400 donors in 2027 at an average gift of $350, which is $140,000, plus 13 major gifts averaging $10,000, which is $130,000. Together that is $270,000, 29% of 2027 income. The board and the director of philanthropy hold the major-gift relationships. The campaign line carries 3% card and platform processing.
- Donor retention is a plan figure and is deliberately modest: 28% of 2027 campaign donors give again in 2028, then 38%, 44% and 47% of each prior year's donors. New donors are 560, 600, 640 and 660 in Years 2 to 5. Major donors renew at 85%. Average gifts rise from $350 to $430 over five years. Published retention figures vary by organization type and are not quoted; the foundation tracks its own.
- Events earn gross receipts of $120,000 in 2027: a June giving day ($20,000) and an October gala ($100,000: 160 tickets at $250, $40,000; six sponsors averaging $6,000, $36,000; and $24,000 raised on the night). Event costs run at 40% of receipts, or 40 cents for each dollar: venue, catering, production and printing. Ticket receipts state the value of the meal and other benefits, which the IRS requires in written acknowledgments of gifts of $250 or more.
- The model applies a blended Year 1 direct-cost percentage to every later year, which would under-charge events as they grow. A separate line, "Event costs above the Year 1 blended direct-cost rate", adds the difference, so direct costs equal 40% of event receipts plus 3% of campaign income in every year.
- Fund administration fees are 1.00% a year of average fund balances, charged quarterly to each fund. Six founding funds with signed agreements hold $1.5 million at opening and 16 more open during 2027, so 22 funds hold about $3.0 million by December. Year-end balances are $6.0 million, $9.5 million, $13.5 million and $18.0 million over Years 2 to 5, from 44, 70, 98 and 128 funds at an average of $136,000 to $141,000. Balances are net of grants recommended and of market moves, and no fund closures are modeled; a 10% market fall would cut fee income by about 10%. The fee is a plan figure. The outside investment manager's fee is charged to the funds and is not in this model.
- The Neighborhood Grants Fund receives gifts restricted to grantmaking from seven corporate and foundation partners in 2027 ($360,000). It pays out $300,000 that year in about 30 grants averaging $10,000, after 90 applications. Payouts follow receipts: $430,000, $540,000, $640,000 and $730,000 in later years, from average grants of $11,000, $12,000, $12,800 and $13,000. The $170,000 gap between gifts received and grants paid across five years sits in cash as money with donor restrictions. These gifts pay grants only; the plan asks partners for no administrative share, so the program officer, grants software and workshops are paid from operating grants and unrestricted income.
- Two partner foundations pay operating support of $180,000 a year in two instalments, restricted by time. The first commitments run three years and the plan renews them in 2030 at the lower figure of $150,000 a year, so this line shrinks as a share of income, from 19% in 2027 to 7% in 2031.
- Receipts of this kind arrive in lumps, so receivables (pledges) average 30 days of income. Pledge write-offs are $5,000 in 2027, about 1.3% of campaign and event income, rising with pledge volume.
- Payroll adds 27% to wages for payroll taxes, health cover, retirement match and workers' compensation. Wages are launch rates; annual pay raises of 3% are charged as a separate line from Year 2. The Development Associate starts in April 2027, the Donor Services Coordinator in January 2028, the Communications Manager in January 2029 and a second senior program officer in April 2030.
- Rent is 2,400 square feet in Baltimore at $27 a square foot a year, $64,800, with utilities separate. Professional fees are $40,000 in 2027: $32,000 for the annual audit and the Form 990, and $8,000 for a legal retainer. They reach $62,000 in 2028: $36,000 for the audit and Form 990, $12,000 for legal and $14,000 for an outside investment consultant who advises the investment committee.
- The spending ratios split costs by stated rules. Event costs, card processing, marketing, pledge write-offs and the development associate are fundraising. The director of philanthropy and the communications manager split 50% fundraising and 50% program. The executive director is 15% fundraising, 50% program and 35% management; the operations manager 10%, 20% and 70%; the donor services coordinator 30% fundraising and 70% program. Grants, workshops and program officers are program. Software is split 40% fundraising, 20% program, 40% management. Occupancy, insurance, professional fees, dues, supplies and depreciation are split 15%, 55% and 30%.
- No owner distributions are paid. The 501(c)(3) pays no federal or Maryland income tax on its exempt activities, so the tax lines are zero.
Income by source
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Annual campaign and major gifts (without donor restrictions) | $270,000 | $457,640 | $633,450 | $791,560 | $931,340 |
| Giving day and gala (gross receipts) | $120,000 | $180,000 | $215,000 | $245,000 | $270,000 |
| Fund administration fees (1.00% of fund balances) | $11,601 | $45,000 | $77,500 | $115,000 | $157,500 |
| Neighborhood Grants Fund gifts (restricted to grantmaking) | $360,000 | $480,000 | $580,000 | $660,000 | $730,000 |
| Partner foundation operating grants (restricted by time) | $180,000 | $180,000 | $180,000 | $150,000 | $150,000 |
| Total revenue | $941,601 | $1,342,640 | $1,685,950 | $1,961,560 | $2,238,840 |
| Growth on prior year | – | 43% | 26% | 16% | 14% |
The restricted share of income falls as the unrestricted lines grow. In 2027, 43% of income is unrestricted (campaign, events and fees) and 57% is restricted to grantmaking or to a time period. By 2031 the unrestricted share is 61%. The staff are paid from the unrestricted lines, the time-restricted operating grants and the founding gifts; the Grants Fund pays grants and nothing else. Fund administration fees are small at first, 1% of 2027 income, and reach $157,500 in 2031, about 7% of income, so the foundation never depends on them to pay its staff. Income grows 43% in the second year and 14% in the fifth.
The first twelve months
| Month | Annual campaign and major gifts (without donor restrictions) | Giving day and gala (gross receipts) | Fund administration fees (1.00% of fund balances) | Neighborhood Grants Fund gifts (restricted to grantmaking) | Partner foundation operating grants (restricted by time) | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|
| Jan 2027 | $8,100 | $0 | $0 | $0 | $90,000 | $98,100 | $8,025 |
| Feb 2027 | $8,100 | $0 | $63 | $0 | $0 | $8,163 | ($76,554) |
| Mar 2027 | $13,500 | $0 | $188 | $60,000 | $0 | $73,688 | ($14,933) |
| Apr 2027 | $18,900 | $0 | $342 | $0 | $0 | $19,242 | ($66,135) |
| May 2027 | $13,500 | $0 | $533 | $0 | $0 | $14,033 | ($71,033) |
| Jun 2027 | $13,500 | $20,000 | $733 | $60,000 | $0 | $94,233 | $4,388 |
| Jul 2027 | $10,800 | $0 | $950 | $0 | $90,000 | $101,750 | $11,457 |
| Aug 2027 | $10,800 | $0 | $1,183 | $0 | $0 | $11,983 | ($72,961) |
| Sep 2027 | $16,200 | $0 | $1,442 | $100,000 | $0 | $117,642 | $26,403 |
| Oct 2027 | $27,000 | $100,000 | $1,750 | $0 | $0 | $128,750 | $36,849 |
| Nov 2027 | $48,600 | $0 | $2,063 | $140,000 | $0 | $190,663 | $95,073 |
| Dec 2027 | $81,000 | $0 | $2,354 | $0 | $0 | $83,354 | ($5,843) |
Income comes in bursts. January holds the first partner-foundation instalment; March, June, September and November carry the Grants Fund payments; June has the giving day, October the gala, and November and December the year-end appeal. Operating surplus (EBITDA) is positive in January, June, July, and September to November, and negative in the other six months. The lowest month-end cash balance is Sep, near $271,000, after allowing for 30 days of pledges outstanding.
Staff and payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Executive Director | $108,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Director of Philanthropy (funds and major gifts) | $84,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Program Officer (grantmaking) | $68,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Operations and Finance Manager | $76,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Development Associate (campaign and events) | $58,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Donor Services Coordinator | $56,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Communications Manager | $66,000 | Month 25 | – | – | 1 | 1 | 1 |
| Second senior program officer | $72,000 | Month 40 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $481,965 | $571,500 | $655,320 | $723,900 | $746,760 |
Four people start in January 2027: the executive director, a director of philanthropy, a program officer and an operations and finance manager. A development associate joins in April to run the campaign calendar and the gala. The donor services coordinator arrives in month 13, as the number of funds grows from 22 toward 44 and statements, fee billing and grant recommendations multiply. A communications manager joins in month 25 and a second senior program officer in month 40, once yearly grants reach about 50 and one program officer can no longer visit every grantee. Payroll with on-costs is $481,965 in 2027 and $746,760 in 2031. With pay raises included it is 51% of income in 2027 and 38% in 2031.
Income and expenses over five years
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $941,601 | $1,342,640 | $1,685,950 | $1,961,560 | $2,238,840 |
| Event costs and card processing (Year 1 rate; see the adjustment line below) | ($56,100) | ($79,994) | ($100,448) | ($116,869) | ($133,389) |
| Gross profit | $885,501 | $1,262,646 | $1,585,502 | $1,844,691 | $2,105,451 |
| Payroll incl. on-costs | ($481,965) | ($571,500) | ($655,320) | ($723,900) | ($746,760) |
| Rent | ($64,800) | ($66,700) | ($68,700) | ($70,800) | ($72,900) |
| Utilities | ($6,000) | ($6,200) | ($6,400) | ($6,600) | ($6,800) |
| Marketing | ($36,000) | ($42,000) | ($46,000) | ($50,000) | ($53,000) |
| Insurance | ($14,000) | ($15,500) | ($17,000) | ($18,500) | ($20,000) |
| Professional fees | ($40,000) | ($62,000) | ($66,000) | ($70,000) | ($74,000) |
| Software subscriptions | ($28,000) | ($34,000) | ($38,000) | ($41,000) | ($44,000) |
| Grants paid from the Neighborhood Grants Fund | ($300,000) | ($430,000) | ($540,000) | ($640,000) | ($730,000) |
| Grantee workshops, site visits and impact reporting | ($18,000) | ($24,000) | ($28,000) | ($31,000) | ($34,000) |
| Board, training and professional dues | ($8,000) | ($10,000) | ($12,000) | ($13,000) | ($14,000) |
| Phones, supplies and postage | ($9,000) | ($11,000) | ($13,000) | ($14,000) | ($15,000) |
| Equipment replacement | $0 | ($4,000) | ($6,000) | ($12,000) | ($6,000) |
| Event costs above the Year 1 blended direct-cost rate | $0 | ($5,736) | ($4,556) | ($4,878) | ($2,552) |
| Pledge write-offs | ($5,000) | ($8,000) | ($11,000) | ($13,000) | ($15,000) |
| Annual pay raises (3% a year) | $0 | ($17,145) | ($39,909) | ($67,125) | ($93,725) |
| EBITDA | ($125,264) | ($45,135) | $33,617 | $68,888 | $177,714 |
| Depreciation | ($10,171) | ($10,171) | ($10,171) | ($10,171) | ($10,171) |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($135,435) | ($55,306) | $23,446 | $58,717 | $167,543 |
| Start-up costs expensed at opening (legal, registration, launch) | ($50,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($185,435) | ($55,306) | $23,446 | $58,717 | $167,543 |
The foundation spends $300,000 on grants in 2027 and loses $135,435 before start-up costs, $185,435 after them. It loses $55,306 in 2028 and is first in surplus in 2029 at $23,446. Surpluses of $58,717 in 2030 and $167,543 in 2031 follow. The 2031 figure is 7.5% of income. Annual pay raises reach $93,725 by Year 5. There is no income tax because the foundation is exempt. These results are before the $750,000 of founding gifts, which are contribution revenue in 2027.
Part of each year's result is Grants Fund money received and not yet paid out, which is restricted and cannot cover overhead. Taking it out gives the unrestricted result:
| 2027 | 2028 | 2029 | 2030 | 2031 | |
|---|---|---|---|---|---|
| Operating result after start-up costs | ($185,435) | ($55,306) | $23,446 | $58,717 | $167,543 |
| Less: Grants Fund gifts received and not yet paid out | $60,000 | $50,000 | $40,000 | $20,000 | $0 |
| Unrestricted result | ($245,435) | ($105,306) | ($16,554) | $38,717 | $167,543 |
The founding gifts cover the unrestricted deficits of the first three years, $367,295 in all.
Cash and the pledge lag
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($250,350) | ($77,115) | $6,240 | $46,910 | $155,603 |
| Equipment and fit-out | ($60,000) | $0 | $0 | $0 | $0 |
| Funding received | $750,000 | $0 | $0 | $0 | $0 |
| Debt repayments (the foundation borrows nothing) | $0 | $0 | $0 | $0 | $0 |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $439,650 | ($77,115) | $6,240 | $46,910 | $155,603 |
| Closing cash | $439,650 | $362,535 | $368,775 | $415,686 | $571,289 |
Closing cash stays above $360,000 at every year end. It falls by $77,115 in 2028, a second year of loss with the donor services coordinator joining. About $110,000 of the 2028 balance, and $170,000 of the 2031 balance, is Grants Fund money received but not yet paid out, so unrestricted cash is nearer $252,500 in 2028 (just over two months of spending) and $401,300 in 2031 (about two months).
Balance sheet and net assets
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $439,650 | $362,535 | $368,775 | $415,686 | $571,289 |
| Accounts receivable | $77,392 | $110,354 | $138,571 | $161,224 | $184,014 |
| Equipment and fit-out (net) | $49,829 | $39,657 | $29,486 | $19,314 | $9,143 |
| Total assets | $566,870 | $512,546 | $536,832 | $596,224 | $764,446 |
| Accounts payable | $2,305 | $3,287 | $4,128 | $4,803 | $5,482 |
| Borrowings (none) | $0 | $0 | $0 | $0 | $0 |
| Paid-in capital | $750,000 | $750,000 | $750,000 | $750,000 | $750,000 |
| Retained earnings | ($185,435) | ($240,742) | ($217,296) | ($158,579) | $8,964 |
| Total liabilities and equity | $566,870 | $512,546 | $536,832 | $596,224 | $764,446 |
Break-even and spending ratios
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -13.3% | -3.4% | 2.0% | 3.5% | 7.9% |
| Net margin (before start-up costs) | -14.4% | -4.1% | 1.4% | 3.0% | 7.5% |
| Payroll incl. pay raises as share of revenue | 51% | 44% | 41% | 40% | 38% |
| Revenue per full-time equivalent at year end | $188,320 | $223,773 | $240,850 | $245,195 | $279,855 |
| Average monthly revenue | $78,467 | $111,887 | $140,496 | $163,463 | $186,570 |
| Monthly revenue needed to cover operating costs | $89,567 | $115,886 | $137,517 | $157,359 | $170,822 |
| Debt service cover (EBITDA / interest + principal) | – | – | – | – | – |
Operating costs are covered when average monthly income passes the amount in the last two rows. 2027 averages $78,467 against $89,567 needed; 2028 averages $111,887 against $115,886; 2029 is the first year above, at $140,496 against $137,517.
Revenue per full-time equivalent counts pass-through grants and gifts, so it overstates what any one person raises.
The next table splits spending by function using the rules in the budget notes above. The first cost-per-dollar row divides fundraising costs by campaign, event, Grants Fund and operating-grant income. The second divides by campaign and event income alone, the gifts that staff and events win directly. The third also counts contributions into donor-advised funds, taken as the yearly growth in fund balances ($3.0 million, $3.0 million, $3.5 million, $4.0 million and $4.5 million), which understates them because grants recommended are not added back.
| 2027 | 2028 | 2029 | 2030 | 2031 | |
|---|---|---|---|---|---|
| Program services | 58.9% | 60.7% | 61.6% | 64.2% | 65.4% |
| Management and general | 16.0% | 13.5% | 11.9% | 10.9% | 10.3% |
| Fundraising | 25.1% | 25.8% | 26.5% | 24.9% | 24.3% |
| Gifts raised (excluding fund fees and fund contributions) | $930,000 | $1,297,640 | $1,608,450 | $1,846,560 | $2,081,340 |
| Fundraising cost per dollar raised | $0.29 | $0.28 | $0.27 | $0.26 | $0.24 |
| Cost per dollar, campaign and event income only | $0.69 | $0.57 | $0.52 | $0.46 | $0.42 |
| Cost per dollar, counting fund contributions | $0.07 | $0.08 | $0.09 | $0.08 | $0.08 |
The 29-cent headline is flattered by Grants Fund and operating-grant income, which arrive through a few partner relationships at little cost. On the gifts that staff and events win directly, 2027 costs 69 cents on the dollar, because the gala costs 40 cents for each dollar and the campaign is new. The plan brings that to 42 cents by 2031 as renewals replace costly new gifts. The director of philanthropy spends most of her time on fund holders, which is why the third row exists.
A 20% shortfall in gifts and fees
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $753,281 | $1,074,112 | $1,348,760 | $1,569,248 | $1,791,072 |
| Net income before start-up costs | ($214,304) | ($143,753) | ($52,828) | $30,486 | $137,985 |
| Net income after start-up costs | ($264,304) | ($143,753) | ($52,828) | $30,486 | $137,985 |
| Closing cash | $375,799 | $216,633 | $152,075 | $175,150 | $305,617 |
This case cuts income from every source by 20% in every year. The response, applied in the model: the Neighborhood Grants Fund pays out 20% less and so does grantee workshop spending, since restricted gifts can be paid out only as they arrive; the donor services coordinator starts six months late, and the second senior program officer and the communications manager are not hired; marketing is cut by 20%; the executive director takes a 20% pay cut; and the foundation stays in its first office. The foundation then ends every year with cash in the bank, at no less than $152,075, and returns to surplus in Year 4. Net assets end 2027 at $485,696, so the opening reserve absorbs the first year. A shortfall that lasted longer would mean pausing the second grant cycle.
A second case tests the two drivers most likely to disappoint: half as many funds opened (fee income halved) and individual donor gifts 25% lower, which stands for fewer new donors and retention ten points lower, with grants and every other income line as planned. With the same hiring, marketing and pay response it gives operating results after start-up costs of ($190,554), ($63,568), $33,438, $110,455 and $214,047 and closing cash of $437,841, $355,984, $375,223, $477,039 and $682,306. The later years sit above the base case only because the response removes two hires and trims pay and marketing; it is the response working, not a forecast, and the team would be stretched. With no response the same shortfall loses money every year and cash falls to about $2,000 by 2031.
Sources
- U.S. Census Bureau, QuickFacts: Baltimore city, Maryland: population estimate July 1, 2025; median household income and poverty rate, 2020 to 2024.
- ProPublica, Nonprofit Explorer: Baltimore Community Foundation: total assets for 2024.
- Bureau of Labor Statistics, Fundraisers and Social and community service managers, Occupational Outlook Handbook, May 2025 median pay.
- Maryland Department of Legislative Services, Fiscal and policy note, SB 354 (2026), enrolled: registration before soliciting; audit and review thresholds; effective July 1, 2026.
- Maryland General Assembly, Chapter 394 (SB 354), 2026.
- IRS, Donor-advised funds.
- IRS, Form 1023 and 1023-EZ: amount of user fee and Frequently asked questions about Form 1023.
- IRS, Instructions for Schedule A (Form 990), public charity status and public support.
- IRS, Exempt organizations CPE text: Community foundations.
- IRS, Charitable contributions: written acknowledgments.
- Financial Accounting Standards Board, Accounting Standards Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (net asset classes).
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