Due diligence is a method that requires a thorough analysis of possible contributions or investments. It is about exploring the horizon to collect evidence of claims of the organization like contracts, performance testing results and market research findings. The goal is to discover any risk that could adversely affect the organization and limit them.
Recent scandals have damaged several philanthropic organisations’ reputations, and have highlighted the need to conduct due diligence. For instance institutions that named buildings after convicted criminals from the US and UK were quickly attacked by the media and ended up losing an enormous amount of philanthropic funding.
However, critics believe that a too rigorous approach to due diligence can deter donors from making generous donations. This viewpoint emphasizes the need for a balancing approach that focuses on identifying risk to reputation however, it does not put undue restrictions on a donor’s right to privacy.
Whether it’s a due diligence or fundraising procedure it’s vital to have a centralized secure and secure platform to organize and share information with all stakeholders. This will allow you to locate relevant documents at the time of a request and minimize the time required to locate important agreements. Virtual Data Rooms (VDR) are an extremely popular instrument for storing and organizing due diligence information since they allow you to host index and share confidential documents with multiple users in one central location.
In addition to VDR, a single process of due diligence and fundraising should be able to incorporate public data from the internet in order to aid in the identification and assessment of reputational as well as operational risks. This vast collection of publicly accessible data covers everything from news articles to corporate blogs, databases, and grey literature. A central, efficient and flexible data collection process that integrates the public data can boost the effectiveness of your efforts and help you to avoid costly mistakes.