Due diligence is a process that requires a thorough analysis of any possible investments or contributions. Due diligence involves going beyond the surface and gathering evidence of the claims of the organization such as contract copies, performance test results, and market research data. The objective is to identify and minimize the risks that could negatively impact the organization.
The need for thorough donor due diligence is underscored by recent scandals that have tarnished the reputations of several foundations and philanthropic institutions. For instance, universities that named buildings after criminals who were convicted in the US and UK were quickly criticized by the media and lost an enormous amount of philanthropic funds.
However, some critics believe that a strict approach to due diligence may deter donors from making generous donations. This viewpoint emphasizes the need for a balance approach that concentrates on identifying the risk to reputation but does not impose unreasonably high limits on a donors privacy rights.
Whether it’s a due diligence or fundraising procedure it’s essential to have a centralized secure and secure platform that can organize and share information with various stakeholders. This will make it easier to find relevant documents at the time of a request, and reduce the time needed to find important agreements. Virtual Data Rooms (VDR) are an effective tool for storing and organizing due diligence data since they offer the ability to host, index and share confidential documents with many users from a central location.
In addition to VDR software as well as a unified fundraising due diligence program should be able of incorporating public data on the internet to assist in the recognition of operational and reputational risks. This vast collection of publicly accessible information spans from corporate blogs and news articles to countless databases and grey literature. A centralized flexible and flexible data collection process that can incorporate this public information can increase the efficiency of your team’s efforts as well as ensure that you don’t make costly mistakes.
