Shifts in funding. Policy changes. Natural disasters. Spikes in demand for services. These and other changes have the potential to cause significant disruption to nonprofits’ ability to sustain their mission and impact.
Organizations that succeed are those that are able to adapt, meet critical needs, and demonstrate impact to funders, while staying true to their core mission and unique value proposition.
Scenario planning can help nonprofits 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 can help improve your organization’s sustainability by helping you prepare for the worst and take data-informed actions sooner than you otherwise might have.
Scenario planning can happen in five steps:
Adapted from Diana Scearce, Katherine Fulton, and the Global Business Network community’s “What If? The Art of Scenario Thinking for Nonprofits.”
Step 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.
Step 2: Explore Drivers
Start by brainstorming the variables you’re unsure about—the things that could make scenarios different from one another. Examples could include the results of an election and policy decisions that could stem from that, rates of inflation, or the amount of support from a major funder. Once you have brainstormed potential drivers, narrow in a few of them. Which drivers could have the most impact, are the least certain, and are not directly correlated with one another (i.e., a change in one driver wouldn’t necessarily cause a change in the other driver in the same direction)? These are the drivers to focus on. Try to narrow in on 2-3 drivers.
Step 3: Build narratives about the future.
Once you have prioritized the drivers that matter most to your organization, develop a set of three scenarios—a best possible case, a worst case, and a moderate case. Using the drivers you identified, build out specific and concrete visions of what each scenario could look like. Consider the implications for your organization: How might each scenario affect your funding, services, or operations? How might each scenario affect your staff, clients, and other stakeholders?
Step 4: Develop plans based on assets and opportunities
Once you’ve envisioned what each scenario would mean for your organization, consider what you would do in response. 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.
Step 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 income inequality in your community due to shifts in the economy, 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 income inequality.
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.
The goal of scenario planning is not to make the most accurate possible guesses, but rather to prepare to make decisions and take action. Likely, none of the scenarios will play out exactly as predicted, but this exercise will help you respond to what happens more quickly and effectively.
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.