by Kelly Pollard and Lucas LaChance
A strategic plan can define where a nonprofit wants to go. But it is the conversations between planning cycles that help an organization stay ready for what comes next.
What assumptions are we relying on? Where do we have room to adapt? What decisions would become harder if we put them off? These questions don’t always produce immediate answers. Their value lies in giving leaders time to compare perspectives, identify trade-offs, and agree on a response.
Planning Shouldn’t Wait for the Next Planning Cycle
Budgets and annual planning provide structure but can’t account for every change. Readiness requires a recurring and frequent dialogue among executive leadership, finance teams, and the board—not just a document approved once a year.
These five conversations are starting points worth revisiting as circumstances evolve.
1. Financial Resilience: Where Is Our Room to Maneuver?
Consider funding concentration, liquidity, and timing together. A grant may be committed but not yet collected. An unrestricted reserve may look substantial until leaders account for seasonal cash needs or planned expenditures. A program may depend on one funder.
Explore the impact of a delayed contract payment, a reduced major gift, or higher-than-expected program costs.
- How many months of operating expenses could available reserves cover?
- What circumstances would justify using them, and how would they be replenished?
- Can a rolling cash flow forecast reveal pressure beyond the annual budget?
The aim is to understand how much financial flexibility your organization actually has when conditions change.
2. Risk and Internal Controls: What Could Interrupt Our Work?
Risk reviews should reflect how the organization operates today, not how it operated when policies were last written. New grants, expanded programs, staff turnover, and technology changes can each alter the control environment.
Ask where critical work depends on one individual, where manual handoffs invite mistakes, and whether approvals and reconciliations remain appropriate. For restricted contributions and grants, consider how the organization documents allowable spending, tracks reporting deadlines, and demonstrates compliance with funding terms.
Aim for a short list of exposures, each with a risk owner and next step.
3. Scenario Planning: What Would Trigger a Different Decision?
Build three plausible views of the next 12 to 18 months: a favorable outcome, a working baseline, and a downside case. Adjust a few meaningful assumptions, such as revenue timing, personnel costs, or demand for services, rather than attempting to model every possibility.
Then identify what would trigger decision points.
- Would a cash balance falling below an agreed threshold prompt a spending review?
- Would a delay in a grant renewal change hiring plans?
- Which programs and commitments are essential to the mission, and where is there flexibility?
Just as important, clarify who recommends a response, who approves it, and how decisions will be communicated. Assessing these different scenarios creates a strategic framework for leaders to know exactly what would prompt action and how prepared people are to respond.
4. Governance: Is the Board Ready for the Decision It May Face?
Boards need more than historical financial results. They need a shared understanding of the choices ahead: which trends merit attention, which assumptions have changed, and where decisions may be required.
Consider using a compact dashboard that pairs financial measures with a brief explanation of emerging risks and possible responses. Clarify how the board, finance committee, and audit committee divide oversight responsibilities, particularly around risk and internal controls.
Reserve time at regular meetings to explore a forward-looking issue that could impact the organization. That keeps strategy alive between annual planning sessions without asking the board to manage day-to-day operations.
5. Operational Readiness: Could We Adapt Without Losing Momentum?
A contingency plan is only as workable as the people and systems expected to carry it out. Consider what would happen if a key employee departed, a core system failed, or program demand increased sharply.
Are essential processes documented? Are succession and cross-training plans realistic? Does technology provide timely, reliable information, or do disconnected systems require staff to assemble it manually?
Modest investments in documentation, training, or system improvement can help reduce operational dependencies, protect organizational continuity, and ultimately support growth.
Start With Two Conversations, Not Twenty
Choose two or three issues that could materially affect the organization in the next year. Assign an executive owner to each, decide what information is needed, and bring the findings to a leadership or board discussion. Agree on a review cadence—quarterly may be appropriate for strategic risks, while cash forecasts may need more frequent attention.
To keep these conversations focused, ask: What has changed? What would cause us to act? Who owns the next decision?
Document the answers and revisit them as circumstances evolve.
Readiness Is a Shared Responsibility
The central lessons from strategic conversations are straightforward: resilience is built before it is tested; Better financial visibility gives leadership time to weigh options while clear decision rights reduce hesitation so that the organization can act quickly; and planning works best when executives, finance leaders, and boards participate together.
These are not one-time discussions for nonprofits. Over time, they should become habits that help protect the mission when assumptions change.
Miller Kaplan will continue exploring these questions through our Nonprofit Exchange series, including in our December session.
