The grant outlook for 2026 is uncertain, and the volatility of this year has made it clear that scenario planning is no longer optional. By building multiple budget scenarios, nonprofits can anticipate change, strengthen resilience, and make informed decisions in an unpredictable funding landscape.
Planning for Contingencies
Scenario-based budgeting helps organizations effectively manage disruptions, adapt quickly under pressure, and pivot with confidence to maintain services and programs.
Anticipate a variety of future possibilities by mapping out different scenarios instead of following one fixed projection.
The Three Key Scenarios
Nonprofits that receive federal grants face unique challenges, such as funding delays, policy changes, and shifting priorities. Organizations can respond to unexpected changes with confidence and stability by developing baseline, best-case, and worst-case scenarios.
1. Baseline Scenario
Represents business as usual, with funding and operational outcomes based on current trends. Use historical data from past federal grants, program costs, and community demand to create realistic projections. Use this scenario as your primary reference for decision-making.
2. Best-Case Scenario
Create a plan with highly favorable conditions, like grant awards, faster approval timelines, or increased philanthropic support. Be both optimistic and realistic in your approach. Use this scenario to explore growth opportunities: expanding services, hiring staff, or launching innovative programs.
3. Worst-Case Scenario
Accounts for challenges such as potential funding cuts, delayed payments, or regulatory changes. Consider other risks like increased service demand, staff turnover, or community emergencies. This scenario is not about predicting obstacles, but about understanding how your nonprofit can continue operations and protect mission-critical programs in challenging yet realistic circumstances.
Why This Matters
Scenario planning provides nonprofits with a blueprint for effectively managing disruptions, adapting quickly to changing circumstances, building resilience in uncertain times, and pivoting with confidence. By anticipating multiple outcomes, organizations can protect their mission, reassure stakeholders, and respond strategically to ensure the programs they offer and the communities they serve remain resilient despite the challenges that arise.
Meet with us to develop you scenerio modeling and navigate the federal funding landscape. REA Analytics is here to strengthen your resilience and safeguard your mission.
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