Top Ten To – Due (Diligence) List for 2009
Charitable Donor Guidelines by Strategic Philanthropy, Ltd.
The beneficiaries of philanthropic dollars are holding their collective breath to see who else among their donors will be affected by the likes of a Madoff scandal. Betsy Brill of Strategic Philanthropy, Ltd. sheds light on a critical topic in 2009 via a handy Top 10 Due Diligence List donors should follow before making a charitable gift to an institution or organization:
1. Evaluate the mission, organizational focus and programs to determine if they are truly aligned with your philanthropic agenda;
2. Find out if, and how, the organization evaluates the impact and relevancy of its programs and services;
3. Check the status of the 501 (c)(3) designation and tax filings and obtain a copy of any audit that has been done;
4. Be fully informed about the financial health of the organization. Review the organization’s investment policy. Find out the track record of the investment manager(s), how diverse is the funding strategy and sources of funds? You don’t want to be the primary donor and you don’t want your funds to go to organizations that can’t survive or continue to be effective.
5. Ask if there is a strategic plan and a development plan in place and how it is being implemented;
6. Inquire about whether or not there is a conflict of interest policy in place. Is the investment manager on the board of the organization (i.e. Bernard Madoff was on the Board of Yeshiva University and “managed” their investments);
7. Review the program and services the organization provides. Are they aligned with the organization’s mission and is there the capacity to successfully deliver the programs and services;
8. Talk to other donors or partner organizations about their experiences and impressions and review press coverage to gauge public perception about the reputation and efficacy of the organization;
9. Don’t let emotions color your judgment or inhibit your due diligence. Understand that this a business/financial decision as well as a personal one; and finally,
10. Talk to philanthropic professionals and learn the “language” of nonprofit management so that you can ask the right questions and be in a better position to make informed decisions.
Source: Strategic Philanthropy, Ltd.