Observe, Orient, Decide & Act (OODA Loop)
July 2, 2026by Victor S. Valentine, CEO of NHSA
“Change before you have to.” —Jack Welch, Chairman and CEO of General Electric from 1981 to 2001
One of my lifelong friends, a former combat Marine, introduced me to what is referred to in military training as the OODA Loop. This is a decision-making framework developed by John Boyd in the 1950s and 1960s that teaches service members to make rapid, informed decisions in uncertain and fast-changing environments. The objective is not simply to react faster than an opponent, but to adapt more effectively. For members of the nonprofit human services sector, tactics like the OODA Loop can provide leaders with a necessary approach to sustaining their organizations in this volatile funding environment.
A Look Inside the Data
• Funding uncertainty from government and private philanthropy continues to drive nonprofit leaders to prioritize financial sustainability, revenue diversification, and organizational resilience.
• Approximately 76% of nonprofits do not yet have a formal AI strategy, despite recognizing AI’s potential to improve productivity and efficiency.
Decline and Redistribution of Charitable Giving
Many organizations are finding it harder to retain donors and attract new philanthropic support. The loss of just a few major gifts can force a food pantry to serve fewer families, delay hiring case managers, or reduce youth programming.
Federal Grant Uncertainty
Organizations that rely on government funding are monitoring proposed federal grant rule changes that could increase administrative requirements and financial risk. Higher compliance costs could divert resources from direct services or discourage participation in federal grant programs. See NHSA’s Alert on Federal Grant Rule Changes.
State Budget Reductions
Budget shortfalls in many states are reducing investments in behavioral health, workforce development, housing, child welfare, and aging services. For providers, reduced contracts and delayed funding often mean longer waiting lists and fewer services for vulnerable populations.
Rising Legal and Compliance Costs
Many nonprofits are spending more on legal counsel to review governance documents, grant agreements, employment practices, and public communications to ensure compliance with changing federal and state requirements. For organizations operating on thin margins, these costs reduce funds available for frontline services.
Adapting to Artificial Intelligence
AI might offer organizations opportunities to strengthen fundraising, automate administrative work, improve communications, and enhance data analysis. Yet many nonprofits remain hesitant because of limited capacity, training needs, cybersecurity concerns, and governance questions. Delayed adoption may leave organizations less efficient and less prepared to meet growing community needs.
How NHSA Is Helping
The National Human Services Assembly helps members navigate change through collaboration and shared expertise. Peer Councils connect professionals to exchange practical solutions, CEO Roundtables provide confidential executive discussions on emerging challenges, and our webinar series delivers timely guidance on financial sustainability, public policy, legal and regulatory developments, organizational resilience, and responsible AI adoption.
Members can also strengthen their financial position through PurchasingPoint®, NHSA’s national group purchasing initiative, which helps organizations reduce everyday operating expenses and redirect savings toward mission-critical services.