Zero-based budgeting in a non-profit organization: balancing stability and flexibility from its adoption through to post-pandemic

Purpose This study aims to examine how zero-based budgeting (ZBB) enables nonprofit organizations to balance stability and flexibility during environmental disruptions, addressing the gap in empirical research on ZBB’s crisis adaptability. Design/methodology/approach Using a qualitative case study of the California Independent System Operator, the authors analyze ZBB implementation from preadoption (2006) through the postpandemic period (2025). Data collection combined focused interviews with four organizational members across executive and operational levels, with documented insider knowledge from a co-author. The authors use Hoque and Kaufman’s (2024) stability-flexibility framework integrated with institutional logics theory. Findings ZBB enabled systematic adaptation across three phases, each characterized by distinct institutional logics: tradition logic during preadoption incremental budgeting, accountability logic following ZBB implementation and adaptability logic emerging during the pandemic. Rather than forcing trade-offs between stability and flexibility, ZBB’s structured evaluation processes enabled responsive resource reallocation while maintaining organizational continuity. Research limitations/implications The single-case design limits generalizability across organizational types and regulatory contexts. Reliance on four key informants, though supplemented by insider knowledge, constrained the sample size. The authors did not directly interview external stakeholders. Future research could examine budgeting systems as institutional logic integration mechanisms, explore temporal dimensions of management control effectiveness and investigate how justification cultures shape organizational resilience during disruptions. Practical implications ZBB functions as more than a technical tool. It enables organizations to navigate competing institutional demands. The justification culture made resource reallocation acceptable within a shared rule system, allowing organizations to maintain structured evaluation while responding to changing needs. ZBB’s framework enabled both mid-cycle crisis response and structured long-term adaptation through annual planning processes. Social implications For nonprofit organizations, ZBB enables continued mission fulfillment during crises while maintaining operational effectiveness. The transition from tradition logic to accountability logic illustrates how budgeting practices can drive cultural transformation. Enhanced stakeholder confidence, indicated by reduced scrutiny and fewer questions, suggests ZBB’s systematic processes may strengthen external trust in organizational financial management. Originality/value This study demonstrates budgeting’s dual functionality as both stabilizing routine and adaptive mechanism, advances institutional logics research by showing how accounting practices integrate competing demands, extends crisis management understanding and introduces the concept of systematic adaptation that challenges traditional dichotomies between organizational stability and change.