Fundraising Due Diligence

Due diligence on fundraising is the process by which fundraising teams review potential donors. This allows nonprofits to identify possible risks that could harm their mission or their reputation. It allows them to decide whether or to pursue a specific opportunity. In this digital age disclosures that are damaging can spread fast and have lasting effects. A fundraising team must be able to recognize and investigate potential risks as they occur, or risk embarrassing the organisation and possibly wasting valuable resources in the form of staff time and donations.

Investors who are conducting due diligence on your startup will want be aware of how long-lasting the company’s operations are. This includes looking at sales, the top management team, and HR procedures. Investors are often on-site to observe the workplace and business culture.

It is essential to make sure you are following the correct funding procedure because delays can hinder your fundraising objectives and cause the loss of investor confidence in your startup. Be sure to have a clear and consistent policy for your team including workflows decisions, decision timelines, contacts and a communications outreach plan.

Your donor screening tools should be able to search automatically through online sources and verify identity, affiliations and interests. This will save time and effort, and give you comprehensive reports that are able to easily duplicate. It is also a good idea to develop a list of red flags or triggers that your team will be looking for when looking into potential customers. This could include things like international prospects, unsubstantiated sources of wealth, a history of criminal activity or scandals, and www.eurodataroom.com/how-can-an-online-data-room-benefit-your-business/ solicitations for more than an amount of money (including name-branding gifts).