Why should grantmakers verify their NGO partners?
- Trust and Credibility: The first and foremost purpose of due diligence is to establish credibility and trust. A donor or grantmaker should be assured that the NGO that they are looking to fund is legitimate. In the absence of thorough verification, chances of fraud or mismanagement arise thus maligning the reputation of the entire sector.
- Effective Use of Funds: Ensuring that funds will be utilized most efficiently as per their intended use by the said NGO is crucial. This way, donors are also able to ascertain that an NGO can meet the desired objectives once they are funded.
- Compliance with Regulations: NGOs have to meet various legal and regulatory provisions from time to time. Through due diligence, one can ensure that an NGO complies with standards to avoid any legal issues on the side of the NGO as well as the donor.
- Transparency and Accountability: Transparency in operations along with accountability for actions is key to an NGO’s functions. Due diligence helps to guarantee that NGOs are working effectively, and ethically, and are transparently reporting their work, financials, and impact generated.
Behind the scenes of the due-diligence process
Our due diligence process involves several steps to ensure NGOs meet our rigorous standards.
- Documentation Verification: We evaluate the registration certificates, 12A and 80G certificates, PAN, bank details, and FCRA certificate if any.
- Organizational Assessment: Key checks and interviews are conducted to assess the NGO’s organizational structure, its governance mechanisms, its financial viability, and its implementation capability.
- Site Visits: For NGOs desiring to be awarded the Gold Trust Seal, we conduct site visits to check the information relayed to us and the on-the-ground effect.
- Regular Renewals: NGOs’ websites have to be updated from time to time and undergo regular verification visits to retain/renew their trust seals.
Guaranteed Trust Seals by Give Discover
Guaranteed Trust Seals have been introduced to act as a promising framework to develop a system of trust and confidence between the donors and the NGOs. We offer three tiers of trust seals:
Gold Seal of Trust:
To be awarded with Give’s highest seal of trust NGOs have to undergo rigorous due diligence and pass verification checks for 48 parameters that cover:
- Organisational capability
- Capacity to deliver impact
- Governance practices
- Financial and legal processes
- HR maturity
- Understanding of impact metrics
- Tech capabilities
- Includes an extensive site visit from our team which entails interaction with all the stakeholders in the NGO’s ecosystem, i.e., leadership team, beneficiaries, governing body, employees, etc.
Silver Seal of Trust:
It is the second-highest seal of trust and transparency. To receive a Silver seal of trust, nonprofits have to undergo due diligence for 24 verification parameters that cover:
- Financial and legal compliances
- Governance
- Organisational capability to deliver a project
- Includes a virtual conversation with the NGO's finance and leadership teams and some of its donors to establish the level of trust.
Bronze Seal of Trust:
This is the standard level of due diligence that is granted to nonprofits on the our platform. The Bronze seal requires verification for 9 parameters which cover:
- Valid registration
- Legal compliance documents to establish the nonprofit is bonafide
- All relevant documents required by government authorities
Conclusion
Due diligence has established vitality in trust building as well as guaranteeing the right use of funds by non-profits. We developed the Guaranteed Trust Seals that help grantmakers with a clear method of checking their NGO partners’ trustworthiness and transparency that helps establish long-term donor confidence in non-profit organizations. Additionally, taking our route will help grantmakers rest assured that they are funding a credible NGO that will help them make positive impacts on society in the course of their charitable work.
