Funding diversification in action: Lessons from Mercy Corps fundraising playbook

When the U.S. government moved to terminate thousands of foreign aid programs earlier this year, Mercy Corps, like many implementers, was forced to stop dozens of critical interventions. Among them were two water and sanitation programs — one in Nigeria, the other in Afghanistan — that had been poised to reach tens of thousands of people. Both projects were suddenly without funding, halted just short of delivery. What followed is a rare window into how a major NGO managed to quickly raise flexible funds, mobilize new donor relationships, and keep vital work from collapsing. In northeastern Nigeria, Mercy Corps had been preparing to launch final-phase upgrades to water systems across 13 conflict-affected sites in Borno, Adamawa, and Yobe states. Solar panels were ready for installation. Supply lines had been scoped. “The hardest part was done,” said Mary Stata, the organization’s chief development officer. “What remained were the final steps: installing solar components, making minor repairs, and activating the supply.” Then came the U.S. cuts. Mercy Corps scrambled to salvage what it could, reaching out across its network. That’s when it connected with Project Resource Optimization, or PRO — a new initiative formed by former USAID staffers to help philanthropists identify and close critical funding gaps caused by abrupt program terminations. Through PRO, Mercy Corps secured $137,000 from four private donors, including Fix The News, to bring the Nigerian project back online. The new funds allowed the NGO to restart infrastructure improvements at the 13 sites, ultimately restoring clean water access to more than 19,000 people, including schools and clinics. “If we don’t complete the remaining work, those nearly functional systems will deteriorate,” Stata said. “The infrastructure investment will be wasted, and communities will return to where they started—if not worse off.” In Afghanistan, a similar situation was unfolding. A U.S.-funded program to rehabilitate water networks and improve sanitation in Herat and Kandahar provinces was frozen. Within days of the termination notice, Mercy Corps reached out to a longtime private corporate donor — one with whom they had previously partnered on development initiatives. The donor responded immediately with a grant, enabling Mercy Corps to resume key parts of the work. The impact was immediate. In Herat and Kandahar, teams resumed the rehabilitation of three water supply networks, ultimately restoring clean water access to around 6,300 people. At the same time, they upgraded sanitation facilities in four schools, improving conditions for more than 4,200 students. In Kandahar, Mercy Corps launched a cash-for-work program focused on rebuilding water and sanitation infrastructure — a dual-purpose effort that both addressed community water needs and created temporary livelihoods for roughly 10,000 people. In both cases, the programs resumed thanks to flexible, unrestricted grants that could be quickly deployed and aligned with the original project goals. Stata credited Mercy Corps’ ability to move swiftly to years of donor engagement, not reactive fundraising. “Donors don’t want to be treated like ATMs whenever emergencies strike,” she said. “It’s important to build trust and meaningful partnerships over time that are based on shared alignment, values, and priorities.” Still, the gap left by the U.S. withdrawal is far from filled. In Nigeria, the restored funding only covered work in a portion of the northeast. Planned infrastructure in Imo, Abia, and Delta states remains unfunded — and at risk of degradation if work doesn’t resume soon. Even in Afghanistan, the effects of the U.S. aid cuts continue to slow Mercy Corps’ progress. According to Stata, the abrupt funding termination meant the organization had to revisit bureaucratic processes and carry out fresh assessments before resuming certain activities — delays that have made it harder to regain momentum on the ground. For Mercy Corps, one of the biggest takeaways has been the growing urgency of diversifying its funding base. As Stata explained, the crisis is prompting organizations to act with more creativity and speed than ever before. While no single funder can replace the scale of U.S. assistance, she noted that private donors and philanthropists are showing increased interest — especially when implementers can clearly articulate needs and demonstrate alignment with donor priorities. Mercy Corps is currently in active discussions with funders about restarting work in Sudan, Somalia, Ethiopia, and other crisis-affected countries. As Stata suggested, being able to adapt quickly — and having the relationships in place to seek support when it’s needed most — is becoming essential for survival. Even in Afghanistan, Stata cautioned that the impact of the U.S. terminations continues to slow progress. “We still need to navigate bureaucratic processes and conduct additional assessments,” she said — delays that have made it harder to regain momentum on the ground. For Mercy Corps, the lesson is clear: Diversification is no longer a strategy — it’s a necessity. “This crisis is forcing the sector to think more creatively and urgently,” Stata said. While she acknowledged that U.S. foreign aid remains unmatched in scale, she noted growing interest from philanthropists and private donors willing to step in — particularly when organizations can clearly communicate their needs, build trust, and align with donor priorities. Mercy Corps is now in active conversations with funders about reviving similar work in Sudan, Somalia, Ethiopia, and other crisis-affected countries. For them, and many others in the sector, the ability to adapt quickly — and know whom to ask — is now a core part of survival.