Should Your Nonprofit Still Do Strategic Planning When Funding Is Uncertain?

Across the nonprofit sector right now, I’m hearing the same instinct over and over. Federal funding is in flux. Demand is growing. Staff is exhausted. The conclusion, said in some form by board chairs, executive directors and even funders, is this: “Let’s pause the strategic plan until things settle down.”

That instinct is wrong. The longer your nonprofit follows it, the more ground you lose.

I’ll say it plainly. Uncertainty is exactly when strategic clarity matters most.

Should your nonprofit still do strategic planning when funding is uncertain?

I understand where the instinct comes from. Three things are running underneath it.

The numbers are sobering. The Chronicle of Philanthropy and the Urban Institute’s Nonprofit Trends and Impacts Survey, which polled 2,737 organizations, found that in early 2025, 21% of nonprofits lost a grant or contract, 27% faced delays or funding freezes, and 6% were hit with stop-work orders. The Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey found that 84% of respondents with government funding expect further cuts. For service-providing nonprofits that have experienced disruptions, government dollars made up an average of 42% of their revenue. So when your CEO or your board chair says “we don’t know what next year looks like,” that’s not catastrophizing. That’s the operating environment.

Your staff is also depleted. Planning feels like one more ask of a team already covering vacant roles, navigating program changes and processing what’s happening to the people you serve. The capacity to sit in a strategy room and think three years out feels like a luxury when this week’s payroll is the actual question on the table.

The real kicker, though, is muscle memory. Most nonprofit leaders have lived through 2008 and COVID (or both). The reflex from those moments was “cut, hold, survive, replan later.” For some organizations, that worked. For many, the years of rebuilding that followed cost more than the original crisis.

While understandable, the pause-the-plan instinct isn’t going to get you where you need to be in the long run.

What strategic planning looks like for a nonprofit in 2026

So what does strategic planning look like when funding is uncertain, demand is growing and your team is running on fumes? Three moves.

Move 1: Get ruthlessly clear on where you create the greatest impact

When dollars get tight, the worst thing your nonprofit can do is keep running every program, every initiative, every legacy line item at 80% capacity. That’s a fast track to mediocre everywhere and excellence nowhere.

Strategic planning right now is fundamentally about prioritization. Not “what would we love to do if we had more money.” Not “what’s politically painful to cut.” The actual questions are sharper:

• Where are we creating outcomes that no one else in our community is creating?
• Which programs deliver on the impact our mission was built to deliver, and which exist because they always have?
• If we lost 25% of our funding next year, which work absolutely cannot stop?
• Where are we duplicating what another nonprofit in our community already does better?

This is the work strategic planning is built for. You can’t answer these questions in a board email thread or at the end of a budget meeting. You answer them in a structured process, with the right voices in the room, and then you make decisions.

The nonprofits I’m watching come through this stronger are the ones doing this work right now. Not next year.

Move 2: Get your board, staff and funders aligned on where you’re going

A strategic plan isn’t a binder. It’s a shared understanding about what your nonprofit is committed to and what it isn’t. When funding is uncertain, the value of that shared understanding goes up, not down.

Here’s what I’m seeing right now. The nonprofits without a current, clear plan are the ones where the board chair is making one set of calculations (or no calculations at all), the CEO is making another, program staff is making a third, and key funders are operating from a fourth. Every conversation about “what should we cut” becomes a negotiation between people who don’t share a picture of what matters most.

A strategic plan ends that. It forces the conversation upstream, where it belongs. It says: here are our three to four pillars, here’s what we will do under each, and here’s what we will not do. So when a new grant opportunity surfaces that’s tangential to your work, your team has language for whether to chase it or pass. When the board asks about a cut, the criteria are already on the table. When a program lead pushes back on a reorganization, the answer isn’t “because I said so” — it’s “because this is what we collectively committed to.”

This is especially important with funders right now. Funders are operating in their own uncertainty. The ones still investing want to see that your nonprofit is being intentional about where their dollars go. A current, well-communicated strategic plan is one of the clearest signals you can send.

Move 3: Listen to the people you serve — their needs are shifting

This is the move most nonprofits skip, and it’s the one I’d argue matters most right now.

The people your nonprofit exists to serve are being affected by the same forces affecting your funding. Safety nets are shrinking. Wait lists are growing. The mix of who’s walking through your door is changing — sometimes dramatically. If your strategy is built on what those needs looked like in 2022 or 2023, you’re planning for a community that has already moved.

This is where Shared Power™ comes in. Shared Power™ is our discipline at Prosper, and the short version is this: strategy developed without the people you serve at the table is strategy that misses. Not because consultants and EDs aren’t smart. Because nobody inside the building can see the full picture of what’s actually shifting for the people on the other side of your programs.

What that looks like in practice:

• Interviews or listening sessions with the people you serve, asking what’s changed in the last 12 months
• Honest input from front-line staff — the ones who know what the intake conversation sounds like now
• A clear-eyed look at whether your current programs still match the demand pattern in front of you

The nonprofits doing this listening right now are the ones discovering things their leadership team didn’t know. Some of those discoveries are uncomfortable. The uncomfortable ones especially inform a stronger plan.

What isn’t going to change

Here’s what executive directors and boards often miss in moments like this. Your mission, vision and values aren’t on the chopping block. They’re the anchor.

Strategic planning right now isn’t about reinventing your nonprofit. It’s about reaffirming what your organization exists to do — then making sharper decisions about how you live that out given the resources you actually have.

The core of your nonprofit’s fabric doesn’t change because federal funding shifted. The people you serve, the change you exist to create, the values that guide how you work — those remain. What shifts is the path.

Why your staff needs this, not the opposite

I’d be dishonest not to name this part.

Staff at nonprofits across the sector are running on empty. Strategic planning, done well, isn’t another drain on that energy. It’s the opposite. A clear plan gives your team something to believe in, something to organize their week around, something that says “this work matters and we know why.” Inspiration and hope aren’t soft outputs of strategic planning. They’re load-bearing.

Done poorly, planning becomes a document no one reads. Done well, it becomes the fuel your team needs to keep showing up.

You don’t need a huge budget to do this right

I’ll close with something practical. If your nonprofit needs to do this work, there are three paths.

• Do it yourself with structured support. Our Strategic Planning Toolbox walks your team through the same framework we use with consulting clients. Built for nonprofits with internal capacity that want the methodology and the prompts.
• Bring in a facilitator for a focused retreat. A consultant-led retreat can move your board and leadership team through the highest-leverage decisions in a compressed format.
• Do the full engagement. When the work warrants it and the budget allows it, a four to six month engagement gives you the most facilitated, most rigorous version of the process.

Whichever path your nonprofit takes, the move to make is to start. Not next quarter. Not when things stabilize. Now.

Here’s what I’ve watched happen across hundreds of nonprofits. The organizations that pause planning during uncertainty don’t get clearer over time. They get more reactive — cutting programs they didn’t need to cut, missing inflection points they could have caught, ending up a step behind the nonprofits that did the hard work of getting clear.

Uncertainty is exactly when strategic clarity matters most. Start now.

FAQs about strategic planning during funding uncertainty

Should we pause our strategic plan because of federal funding cuts?

No. Pausing strategic planning during a funding crisis tends to make organizations more reactive, not more careful. The nonprofits coming through this period stronger are the ones using strategic planning to prioritize where they create the greatest impact, align stakeholders, and listen to how the needs of the people they serve are changing.

Is strategic planning worth doing if our funding picture might change again in six months?

Yes. A strategic plan isn’t a prediction. It’s a decision-making framework. When funding shifts, a clear plan tells your CEO and board what to protect, what to deprioritize and what to say no to. Without it, every funding change becomes a separate crisis conversation.

Should we do a shorter strategic plan because of uncertainty?

You can compress the timeline, but don’t compress the rigor. A three-year plan with annual reviews works well in volatile environments. What matters most is that the plan forces clear tradeoffs and includes a process for adjusting activities as conditions change.

What should nonprofits prioritize in their strategic plan right now?

Three priorities: (1) clarity on where your nonprofit creates the most distinct impact in your community, (2) alignment across your board, staff and funders on those priorities, and (3) updated understanding of how the needs of the people you serve are shifting.

How do we get our board on board with strategic planning during uncertainty?

Frame strategic planning as the risk-mitigation tool, not the optional exercise. Boards often default to “wait and see” out of caution, but waiting in a volatile environment is a strategic choice with consequences. A current strategic plan gives your board the criteria it needs to make smart resourcing decisions.

What’s the difference between a strategic plan and a survival plan?

A survival plan asks “what do we cut to make it through next year?” A strategic plan asks “what do we focus on so the work we do creates the most impact possible with the resources we have?” Both matter, but a survival plan without a strategic foundation tends to cut the wrong things.

Can a nonprofit do strategic planning without hiring a consultant?

Yes, when you have internal capacity and a structured process to follow. The Nonprofit Strategic Planning Toolbox gives nonprofits the guidebook, templates, OKR dashboards and AI-powered support to lead the process internally without starting from scratch.

How long should a nonprofit strategic plan be in 2026?

Most nonprofit strategic plans cover three to five years and include three to four strategic pillars, with objectives and key results under each. The volatility of the current environment makes a three-year horizon with annual reviews more practical than a five-year plan that won’t be updated.

What is Shared Power™ strategic planning?

Shared Power™ is Prosper Strategies’ approach to nonprofit strategic planning. It centers the people a nonprofit exists to serve as essential voices in shaping strategy, alongside staff, board, funders and partners. The premise: strategy developed without the people you serve at the table tends to miss what’s actually changing on the ground.