Scenario Planning: Planning for the Unpredictable
In a world defined by constant change and uncertainty, charities face a unique set of challenges. Economic shifts, evolving donor priorities, and a volatile political landscape can all threaten an organisation's mission. But what if you could move beyond simply reacting to these disruptions and instead, prepare for them? That's the power of scenario planning. 🚀
Scenario planning isn't about predicting the future. It's a strategic foresight tool that helps your organisation explore multiple plausible futures and build a resilient plan that can withstand a range of unexpected events. By engaging in this process, you'll be able to identify potential risks and opportunities, align your team, and make more informed decisions, even when the ground beneath you is shifting.
Approaches to Scenario Planning for the Charity Sector
While scenario planning can be complex, there are several accessible approaches that can be tailored to the specific needs of a charity. The key is to shift your mindset from a single, static plan to one that's flexible and adaptable.
The "Best Case, Worst Case" Approach
This is a great starting point for any organisation new to scenario planning. It involves defining two clear, opposing scenarios:
Best-Case Scenario: What does the future look like if everything goes right? For a charity, this could mean an increase in government funding, a surge in public donations, and favourable policy changes.
Worst-Case Scenario: What happens if the most significant threats come to pass? This might include a loss of a major grant, a sharp economic downturn impacting individual giving, or a new competitor emerging.
By planning for these two extremes, you can identify robust actions (beneficial in both scenarios) and those that are adaptive (only useful in one, which you can save for later).
The "Two-by-Two Matrix" Method
This is a more sophisticated and common approach. It starts with identifying the two most critical uncertainties that could impact your charity. These should be trends that are highly impactful but whose future direction is unclear. You then plot these on a simple X-Y axis, creating four distinct quadrants, each representing a unique future scenario.
Example 1: The 'Great Squeeze'
A charity focused on mental health could use a matrix with Government Policy on Mental Health (from "Supportive" to "Hostile") and Economic Climate (from "Thriving" to "Recession"). This would generate four scenarios:
Quadrant A: Supportive Policy + Thriving Economy = Optimal Growth
Quadrant B: Hostile Policy + Thriving Economy = Market-Led Innovation
Quadrant C: Supportive Policy + Recession = Increased Demand, Stable Funding
Quadrant D: Hostile Policy + Recession = The Great Squeeze (a classic "worst-case" with high demand and low funding).
The "Narrative Storytelling" Technique
This approach is less about numbers and more about creating compelling, detailed stories of the future. After identifying key trends, you build a narrative for each potential scenario. This helps to move beyond abstract concepts and makes the implications more tangible.
Example 2: The 'Data Divide'
A charity working to improve digital literacy could build a narrative around the increasing adoption of AI.
Scenario Story: "In 2030, a new generation of AI assistants is commonplace. But while the wealthy have seamless access to these tools, a 'data divide' has emerged. Our charity's mission has changed from teaching basic digital skills to ensuring equitable access to and understanding of these powerful new technologies. This future requires us to partner with tech companies, lobby for data equity, and train our staff in AI ethics."
A Step-by-Step Process for Your Organisation
Ready to get started? Here’s a simplified process to guide a scenario planning session within your own charity:
Step 1: Identify Key Driving Forces
Begin by brainstorming all the external factors that could significantly impact your work. Think beyond your immediate concerns. Use a PESTLE framework to guide your thinking (Political, Economic, Social, Technological, Legal, Environmental). Don't just list them; discuss why they are important.
Examples: Changes in government funding, new data protection laws, shifts in public trust, and the impact of climate change on your services.
Step 2: Pinpoint Critical Uncertainties
From your long list of driving forces, narrow it down to the two most important and uncertain factors. These are the variables that could go in multiple directions and have the biggest impact. This is the foundation for your 2x2 matrix.
Step 3: Develop Your Scenarios
Now, build out your four scenarios using the 2x2 matrix you've created. For each quadrant, answer these questions:
What does the external environment look like in this future?
How does this future impact our beneficiaries and stakeholders?
What are the key challenges and opportunities for our charity in this world?
What does our organisation look like in this scenario? (e.g., staffing, funding, programs).
Step 4: Stress-Test Your Current Strategy
With your four scenarios defined, take your existing strategic plan and hold it up against each one.
Which of your current goals are still relevant and achievable in every scenario?
Which goals would need to be abandoned or modified?
What new strategies or capabilities would you need to build to thrive in each world?
Step 5: Identify Leading Indicators & Action Plans
Finally, create a set of "leading indicators" for each scenario. These are early warning signs that a particular future is becoming more likely. For example, if "The Great Squeeze" scenario is a possibility, a leading indicator might be a significant decrease in average individual donation size over two consecutive quarters.
Based on this, create a set of proactive actions you can take today to prepare for these futures. This is where you transform a theoretical exercise into real, actionable steps that will make your charity more resilient, agile, and ready for whatever the future holds.
You can find help and advice from us across all of our resources, blogs and infographics. Why not consider signing up for membership to gain access to all the latest tools and resources that will help drive your charity forward?