Navigating Contingency Planning: Lessons from Philanthropy

Contingency planning plays a crucial role in ensuring that philanthropic projects can continue even when unexpected challenges arise. Non-profit organizations frequently encounter unforeseen obstacles, and having a well-defined risk management plan can make the difference between a project’s success and failure. The following article draws on case studies from Navigating Risk in Impact-Focused Philanthropy, produced by Open Road Alliance in partnership with The Rockefeller Foundation, to explore how non-profits like Splash have successfully navigated major crises by utilizing contingency planning.

Case Study 1: Splash in China – Handling Unforeseen Expansion

In 2007, Splash launched a project in China with the ambitious goal of providing clean water to every orphanage in the country. Initially, the project was on track, and by 2012, Splash was close to completing its mission with only 20 orphanages left. However, they soon learned that an additional 500 orphanages had not been included in the original count due to government oversight.

This unexpected expansion was a massive blow to Splash, as it had already allocated its fundraising efforts to other programs. To handle this crisis, Splash approached its primary funder and negotiated to remove certain funding restrictions, allowing them to reallocate resources to continue the project. Thanks to this flexibility, Splash was able to manage the additional 500 orphanages without compromising their mission.

Case Study 2: Splash in Nepal – Responding to Internal Malfeasance

In Nepal, Splash was making significant progress toward providing clean water to 70% of schools in Kathmandu when a major internal crisis occurred. The country director, who had been groomed for leadership, was found to be funneling resources to his personal business through shell companies. This revelation caused major setbacks, including the suspension of more than $1 million in funding from key donors.

Despite the gravity of the situation, Splash was able to recover by immediately sharing its findings with donors and taking quick action to audit and restructure its operations in Nepal. By maintaining transparency and acting swiftly, the organization managed to rebuild donor trust and stabilize its operations.

Case Study 3: Splash in India – Facing Overwhelming Growth Opportunities

In India, Splash’s project to provide clean water, hygiene education, and sanitation to schools in Kolkata gathered momentum after the organization collected crucial data on poor water conditions. This success attracted the attention of larger organizations and international NGOs that proposed partnerships to scale the project beyond its original scope.

However, Splash faced the risk of “mission drift” – losing focus on their core objectives due to the overwhelming opportunities. After careful consideration, the organization decided to refocus on their original goals and scale at a manageable pace, ultimately strengthening their program model for broader success in the future.

Lessons Learned from Contingency Planning

1. Flexibility in Funding: One of the key factors that allowed Splash to navigate crises was having access to flexible funding. Being able to reallocate resources in response to new challenges helped the organization stay on track despite major obstacles.
2. Transparency with Donors: In each case, Splash’s ability to communicate openly with donors about the challenges it faced helped to maintain trust and secure continued support during difficult times.
3. Staying True to Core Mission: While growth opportunities can be enticing, it is crucial for organizations to stay focused on their core mission. Splash’s decision to refocus in India ensured that they did not compromise their impact by overextending their resources.
4. Internal Risk Management: The Nepal case highlighted the importance of internal controls and auditing to prevent malfeasance and ensure that resources are used as intended.

Conclusion

Contingency planning is essential for non-profit organizations seeking to make a long-lasting impact. The case studies from Splash demonstrate that flexible funding, transparency with donors, and a commitment to core values are crucial components of effective risk management. By embedding these practices into their operations, organizations can weather unexpected storms and continue to drive meaningful change.