Donor Due Diligence and Fundraising Processes
Due diligence is a procedure that requires a thorough analysis of any possible investments or contributions. Due diligence involves going beyond the surface and gathering evidence of organization claims such as contracts, performance tests and market research data. The aim is to determine any risks that could negatively impact the organization and limit their impact.
The importance of thorough donor due diligence is evident in recent scandals that tarnished the reputations of many philanthropic organizations. For instance, universities that named buildings after convicted criminals in the US and UK were swiftly condemned by the media and lost significant amounts of philanthropic funding.
Critics argue, however, that a strict approach to due diligence may hinder donors from making generous donations. This argument emphasizes the necessity of a balanced approach that is focused on identifying risk to reputation but does not impose undue restrictions on the rights of donors to privacy.
It’s a due diligence or fundraising procedure it’s essential to have a centralized secure and secure platform to organize and share information with stakeholders. This will help you locate relevant documents at the time of a request. It will also reduce the time required to locate important agreements. Virtual Data Rooms (VDR) are an extremely popular tool for storing and organizing due diligence information as they offer the ability to host, index and share confidential documents with multiple users in one central location.
In addition to VDR software and a unified fundraising and due diligence procedure should be able to integrate public data on the internet to assist in the identification of reputational and operational risks. This vast repository of publicly available data includes everything from news articles to corporate blogs, databases, and grey literature. A central, efficient and flexible data collection system that integrates this public information can improve the effectiveness of your efforts and allow you to avoid costly mistakes.