Due diligence is a method that requires a thorough review of any possible investments or contributions. Due diligence involves going beyond the surface and obtaining evidence of the claims of the organization like contract copies, performance tests and market research data. The aim is to determine any risk that could adversely affect the company and reduce them.
The importance of thorough donor due diligence is underscored by recent scandals that damaged the reputations of many foundations and philanthropic institutions. For instance institutions that named buildings after convicted criminals in the US and UK were quickly criticised by the media and subsequently lost significant amounts of philanthropic funding.
However, some critics believe that a strict approach to due diligence could discourage donors from making generous donations. This argument emphasizes the need for a balanced try here approach that is focused on identifying risks to reputation, however, it does not put undue restrictions on the rights of donors to privacy.
It’s a due diligence or fundraising process it’s important to have a centralized, secure platform that can organize and share information with all stakeholders. This will allow you to locate relevant documents at the time of a request, and reduce the time needed to find important agreements. Virtual Data Rooms are popular tools for organising and collecting due diligence information. They permit many users to access, index and share confidential data in a central location.
In addition to VDR and due diligence, a common process of due diligence and fundraising is required to include publicly available data to support the identification and assessment of reputational as well as operation risks. The vast amount of information that is publicly available ranges from news articles and corporate blogs to countless databases and grey literature. A central, efficient and flexible data collection system that integrates this public information can improve the efficiency of your efforts and allow you avoid costly errors.
