Due diligence is an essential component of any fundraising process. It confirms that the business or individual is who they claim to be. are, as well as providing important details regarding their past and relationships, and helps investors assess your company’s chances for success prior to making the decision to invest in you.
It is possible to achieve success by conducting thorough due diligence, regardless of whether you are a company seeking an investment or a philanthropic institution. The ability to run due diligence early in the process allows you to quickly recognize and eliminate bad partners prior to investing your time and energy in forming an alliance that may not be worth it.
For instance the case of a donor who has been associated with a controversial cause or has taken a risk in the past, it could be a major issue. Having the ability to conduct due diligence on prospective donors in the early stages of the process allows you to find out prior to committing valuable resources to a relationship that isn’t in line with your organization’s values and goals.
A good due diligence process is comprehensive, quick and well-organized. It should be able to take massive amounts of public data such as news websites or social networks, or even gray literature, and provide digestible reports which are easily shared across teams. It should be able automatically to search through millions of documents to give a clear and structured picture of your company that is easy to understand and to share.
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