By Jon Hoffmann
8/4/2026
As funding cuts and other challenges threaten organizations, scenario planning presents a framework for nonprofit boards to respond to disruption.
Every month, new data highlight just how challenging the climate is for nonprofits of all sizes. Recent research from the Center for Effective Philanthropy frames nonprofits as a “sector in crisis”: 81 percent of nonprofit leaders report or anticipate increased demand for their services, yet 69 percent of organizations have experienced reductions in funding from one or more sources. The Urban Institute’s surveying also uncovers programmatic and workforce uncertainty for nonprofit leaders.
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Key Points
- Amid funding cuts, regulatory shifts, AI adoption, and leadership transitions, scenario planning gives nonprofit boards a more flexible way to anticipate disruption and guide strategy.
- Effective scenario planning requires boards to use a structured process, work closely with management, and dedicate focused time to assess risks and develop practical responses.
- Boards should prioritize preserving the organization’s mission and impact, even when scenarios point toward major changes, such as mergers, program shifts, or sunsetting the organization.
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