While the COVID-19 crisis has brought tremendous challenges, it is also bringing out the best in many nonprofit leaders as they work to sustain their missions and create more equitable communities. Many leaders are pivoting their organizations’ services; tending to the professional, emotional, and safety needs of staff and volunteers; forging new partnerships; and testing creative ideas to address inequities.
This type of proactivity is no small feat amid significant disruptions to services, operations, and funding that can leave leaders feeling uncertain about what to prioritize and how to adapt. It can be easy to deprioritize planning completely or default to contingency planning and risk management. In times of crisis, many leaders understandably take a singular focus on preserving the organization’s operations and planning for contingencies. Of course financial health is crucial for continuing services, and our research and experience show organizations also need to take a broader view. Before doubling down on financial health and organizational preservation, nonprofits should focus on the impact they want to have and imagine possible new futures. One way leaders can do this is through scenario planning.
Scenario planning can help your organization manage uncertainty, envision new opportunities, and spot unexpected threats. It helps you focus on the things you can control – even amid great change and uncertainty – so that you are better positioned to achieve your desired impact. It improves your organization’s sustainability by helping you financially prepare for the worst and take data-informed actions sooner than you otherwise might have.
Scenario planning can happen in five steps:
1. Define key questions.
What questions do you hope this plan will answer? Are you looking to determine how best to hold steady during turbulent times, or do you want to reimagine your programs and services for a new future?
What is your time horizon for planning? Organizations facing great upheaval and uncertainty may decide to look out only six to 12 months while other organizations may be able to take a longer view. Either approach is fine.
Even if your primary focus is on stabilizing the organization and looking at the near term, scenario planning presents an opportunity to think about steps you can take now that will position you for long-term impact.
2. Explore drivers.
The trajectory of the virus will have many ripple effects, such as closures of schools and other places due to social distancing and economic impacts that affect state budgets, employment, and donor/funder behavior. In most communities, the COVID-19 crisis is widening the racial inequities many nonprofits are working to address. Focus on the two to three driving forces that most affect your organization’s future and are the most uncertain.
3. Build scenarios.
Once you have prioritized the drivers that matter most to your organization, develop a set of plausible and thought-provoking scenarios that represent a range of future outcomes. Here is an example of what scenarios might look like for a nonprofit that identified school closures and state budgets as key drivers.
4. Develop plans based on assets and opportunities.
Envision what each scenario would mean for your organization and what you would do in response. Play out how each scenario might impact the community you serve, your programs, funding, staff, and operations. Pay attention to how each scenario and your response might widen or decrease inequities. For example, data show that communities of color are disproportionately feeling the health and economic impacts of COVID-19. What is your organization doing to address disparities, and how can you ensure your response does not inadvertently contribute to existing inequities?
As you develop your plans, consider where you might have the greatest opportunity for impact. If you are getting stuck trying to imagine a different way of creating impact, take a step back and consider your organization’s core purpose. What are the three things you must hold on to? Maybe those things are your values, the population you serve, or the way you show up in the community. What three things might you change or let go of to stay focused on what matters most? Maybe you are open to changing your funding model, ending a longstanding program, or having staff build new skills. This helps you identify where the greatest opportunities lie in each scenario, what tradeoffs you may need to consider, and the steps you need to take to prepare for the future.
5. Monitor indicators.
To be able to act on your plans, you will need to have a sense of which scenario is playing out. Identify two or three metrics that indicate the organization is transitioning into each scenario, so you can make timely choices about how to respond. Many organizations set financial indicators, such as progress against fundraising goals, to guide operational decisions. Consider what outcome indicators might guide programmatic decisions as well. For example, if you see a widening of racial disparities in your community as the virus spreads, you may decide to double down on your efforts to address those disparities, and that may require you to let go of other activities that don’t support efforts to decrease disparities.
Imagining a New Future
During disruption and uncertainty, scenario planning helps organizations focus on the things they can control. It can clarify what’s most important to your organization and what to pay attention to. Imagining what you would do in your most severe scenario will push you to think creatively and identify actions you could take to help ensure long-term sustainability and improved community outcomes.
While scenario planning can help stabilize organizations during times of crisis, it can also help you imagine a new future. As you embark on scenario planning with your organization, bring an asset-based mindset to consider not just future risks but also the strengths within your organization and community. Build on these assets to find the new opportunities and possibilities for the future, even in times of uncertainty.