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Due diligence for fundraising is the process through which fundraising teams evaluate potential donors. This enables nonprofits to identify any risks that could impact their mission or reputation. It assists them in deciding whether or not to pursue a certain opportunity. In the digital age devastating revelations can be shared quickly and can have a lasting impact. A fundraising team needs to be able recognize and address 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 involves looking at the top management teams, sales and HR policies. Investors are often on-site to observe the working environment and the corporate culture.

It is crucial that you ensure that you have the right funding process. In the event of delays, you could end up with the failure of your fundraising goals and loss of investor trust in your startup. Be sure to have a clear and consistent policy for your team including workflows decisions, contacts, timelines for decision making and a communication outreach plan.

Your donor screening tool should be able search across online sources to confirm the identity, affiliations, and interests. This will save you a lot of time and effort and provide you with comprehensive reports that are easy to read and easily reproducible. It’s also an excellent idea to have your team create a list of warning signs or triggers they should keep an eye on when analyzing potential clients. These could include international potential customers, unverified wealth sources, criminal activity or scandals and solicitations for an amount of dollars (including namesake gifts).