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The new year’s energy may still feel fresh, but it’s never too early to revisit your nonprofit’s budget. Scenario planning is a powerful way to maintain agility, especially for organizations with an annual revenue between $750,000 and $2,000,000. By proactively exploring “what-if” situations, you’ll be better equipped to respond to shifting donor behaviors, unexpected expenses, and emerging opportunities.
Evaluate Current Revenue Streams Start by comparing your actual revenue so far with the figures you projected a couple of months ago. Is donor support meeting expectations? Are grant disbursements arriving on time? If you notice shortfalls, you can strategize immediately—maybe by focusing on donor engagement or exploring new earned income streams.
Identify Potential Cost Fluctuations Consider which expenses might spike or drop over the next few months. For instance, if you’re launching a new program in Q2, factor in the cost of staff training or technology investments. Scenario planning isn’t about predicting every detail; it’s about preparing a budget buffer that shields your mission from financial surprises.
Create Clear Scenarios Draft at least two or three scenarios:
Best-Case: Revenue exceeds expectations, and expenses stay stable.
Moderate: Revenue holds steady but doesn’t grow as hoped.
Challenging: A major donor pulls back, or a grant gets delayed.
Mapping each scenario to budget adjustments—like postponing nonessential projects or accelerating a fundraising campaign—lets you pivot quickly, ensuring your organization remains mission-focused.
Engage Your Team and Board Scenario planning isn’t a one-person exercise. Invite your board, key staff members, or program leaders to discuss which scenarios seem most likely. Their input offers valuable context. The more voices you include, the more realistic your action plans become.
Keep Stakeholders Informed Whether it’s donors or community members, transparency about how you handle uncertainty can build trust. You don’t have to share every spreadsheet, but highlighting your proactive planning shows you’re managing funds responsibly and focusing on long-term sustainability.
By revisiting your budget and thinking ahead, you give your nonprofit the agility to flourish even when unexpected changes arise. If you’d like to brainstorm scenario strategies or clarify which approaches best fit your organization’s financial landscape, reach out—we’re here to help navigate the numbers.
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