- Charity Ali

Several small, local and national organizations (NGO) have asked series of question why they do don’t scale through during donor due diligences, however donors commonly look out for several key aspects during the due diligence process especially when evaluating NGOs whether small or small for potential funding. By addressing these key aspects during the due diligence process organizations, small NGOs can enhance their credibility, attract donor support, and strengthen their capacity your organization to achieve our mission and organizational goals effectively.

Here’s a list of what donors typically look for during due diligence’s:

    1. Mission and Objectives Alignment:

      • Donors assess whether the NGO’s mission and objectives align closely with their funding priorities and overarching goals.

      • The NGO’s mission statement, strategic plan, and past projects should demonstrate alignment with the donor’s focus areas and desired outcomes.

    2. Organizational Capacity:

      • Donors evaluate the NGO’s organizational capacity to effectively implement projects and manage funds. Donor have to know whether your organization have the capacity all segment to implement the suppose project. This includes assessing the NGO’s governance structure, leadership team, staffing capacity, financial management systems, and administrative processes.

    3. Financial Stability and Accountability:

      • Donors examine the NGO’s financial stability, transparency, and accountability to ensure proper stewardship of funds.They review audited financial statements, budgetary practices, internal controls, and compliance with financial reporting requirements.

    4. Track Record and Impact:

      • Donors look for evidence of the NGO’s past performance, achievements, and impact in delivering meaningful outcomes. They review project reports, case studies, success stories, and evaluations to assess the NGO’s effectiveness in addressing community needs and achieving intended results.

    5. Program Design and Innovation:

      • Donors assess the quality, relevance, and innovation of the NGO’s program design and interventions. They look for evidence-based approaches, innovative solutions, scalability, and sustainability in addressing social or environmental challenges.

    6. Partnerships and Collaboration:

      • Donors consider the NGO’s ability to collaborate with other organizations, government agencies, communities, and stakeholders. They evaluate the strength of existing partnerships, networks, and collaborations that enhance the NGO’s impact and outreach.

    7. Transparency and Communication:

      • Donors value transparency, open communication, and responsiveness from the NGO’s leadership and management team.

      • They expect clear and timely communication regarding project progress, challenges, and financial reporting.

    8. Compliance and Legal Standing:

      • Donors verify the NGO’s legal status, registration, compliance with regulatory requirements, and adherence to relevant laws and policies.

      • They may request documentation such as registration certificates, tax-exempt status, and legal agreements.

    9. Risk Management and Mitigation:

      • Donors assess the NGO’s ability to identify, assess, and mitigate risks associated with project implementation and organizational operations.

      • They look for risk management strategies, contingency plans, and measures to ensure project sustainability and resilience.

    10. Ethical Standards and Values:

      • Donors expect the NGO to uphold ethical standards, integrity, and accountability in all aspects of its operations and interactions.

      • They may assess the NGO’s adherence to codes of conduct, ethical guidelines, and principles of good governance.

    By addressing these key aspects during the due diligence process, small NGOs can enhance their credibility, attract donor support, and strengthen their capacity to achieve their mission and goals effectively.