Due diligence research is a key part of prospect research in the UK and Europe. All of the prospect researchers at nonprofits that I know there – and not just the ones who work at human-rights or cause-related orgs, but researchers at universities, membership, animal rights, arts organizations, consultants – every kind of organization – they all include due diligence as part of their work. It’s just as important as finding wealth indicators or career history or interest in their organization’s cause.
They’re considering these questions: Do we want our organization to be associated with this person? Or this company? Or this trust/foundation?
Do WE want to stand with THEM?
Not the other way around, which is how we tend to look at donors here in the U.S. We are more likely to ask: “Does this wealthy philanthropist (or company, or foundation) want to join us?”
Don’t get me wrong, I know that, when prospect researchers here do in-depth research, we look to be sure that the individual we’re researching hasn’t been arrested for something, or jailed for something else, or rumored to be a member of the mob. If we’re doing in-depth research, we will make the effort to search for these important relationship liabilities.
But not generally as part of quick research. As run-of-the-mill can-you-just look-into-this-person-quickly kind of research. (I know there are exceptions to every rule – I have worked, for example, with schools of public health where alcohol, tobacco, and firearms donors were automatically not considered. I’m saying generally.)
And generally, we don’t shine a due-diligence darkened-theater-single-beam-spotlight on every key prospect every time. It’s not usually a separate section on every profile format. Our research isn’t provided as backup for – or, I should say really, the basis of – consideration of a select committee that meets regularly to authorize a ‘go or no-go’ for every single gift ask above a certain threshold.
But for most of the organizations we work with in the UK, that is the case. Every potential major partnership is carefully and deliberately considered by a specially-tasked team.
And we can learn a lot from them, because the social and political environment in which we operate is rapidly changing in the US, and we in fundraising are increasingly moving toward the front lines.
News organizations have for many years, drawn lines between support dollars from wealthy individuals like George Soros, the Koch brothers, and the Mercer family, and the causes and political action committees they support.
But more recently – significantly assisted by social media – people notice how organizations ally themselves with supporters. They can rapidly communicate and mobilize action to support or counter these alliances.
For example, a grass roots effort mobilized by an activist Twitter account opened just last fall called Sleeping Giants has alerted organizations who may not have been aware that they were supporting the alt-right news site Breitbart through their advertising buys.
Some companies, including Google, Facebook, and Amazon were aware and continue their ads on the site, but others have followed Sleeping Giants’ step-by-step instructions for how to remove their advertisements from the site. As a result, advertising on Breitbart reportedly dropped 90% between March and May of this year.
The organizations withdrawing support from Breitbart aren’t just companies, though; nonprofits including ActionAid UK, the American Association for the Advancement of Science, and Harvard Business School Online (just to name a tiny group) have blocked Breitbart’s site from displaying their ads as well, either due to pressure on the part of supporters or as a values-based preemptive action.
This is new
What I hadn’t noticed in past years but seems to be a growing trend is that the press within our own industry is starting to pick up the thread and turn a spotlight on the charitable sector’s affiliations.
Inside Philanthropy editor David Callahan’s book, The Givers, has entire chapters dedicated to tracing mega-philanthropy and showing how philanthropy and politics have influenced, hindered and/or advanced social movements in recent years.
Also, in an August 11 article, the Chronicle of Philanthropy’s investigative team (they now have an investigative team!) sifted through 9 years of event permits pulled by 71 nonprofits nationwide that held events at Mar-a-Lago in Palm Beach, FL. The database they created highlights the name of each organization, date of the event(s), estimate of money raised, and more.
Many of those organizations have heard from their supporters and, as the Chronicle has reported, many of them have faced backlash and some are trying to decide the best way forward for future event planning. Today the Palm Beach Post reported that Laurel Baker, the executive director of that city’s Chamber of Commerce, encouraged charities to re-think holding events at Mar-a-Lago in light of the president’s recent statements on the events in Charlottesville.
If you have a conscience, you’re really condoning bad behavior by continuing to be there,” Baker said. “Many say it’s the dollars (raised at the events) that count. Yes. But the integrity of any or organization rests on their sound decisions and stewardship.”
The main stream press, the philanthropic press, and donors are all paying attention to where we stand.
Like it or not, we are all judged by the company we keep. 
I’ll bet right now you can think of at least two nonprofits that made a corporate or major donor partnership decision that caused a firestorm. That damaged-reputation gonging noise continues to reverberate for those nonprofits – and in some cases, for our entire industry – long after the decision-makers have moved on to their next job.
Once a nonprofit’s board, staff, and stakeholders have determined what their values statement is, those values give clarity for the partners they will choose.
And it’s not only a question of ethics. Choosing and allying with the right partners also mitigates risk.
- Whose support might you lose if you take a donation from mega-donor “Black Jack” Randall?
- Whose major support might you gain if you no longer affiliate your organization with Flying-Under-the-Radar LLC?
Your nonprofit might be left-leaning, right-leaning, or squarely apolitical – but you’ll have to figure out what partnerships are right for you.
And whatever that right fit is – if you haven’t already done this – it’s time to include due diligence prospect research into that equation. Not just as an afterthought, but as you begin your relationship building with someone (or some company or some foundation) that has the capacity to be a significant or long-term partner.
Due diligence prospect research saves you from wasting time cultivating the wrong relationships and proactively helps avert the possibility of your organization suffering reputational harm.
Times are changing. There’s growing awareness of the company that nonprofits keep, and at some point, someone could shine a spotlight on your organization.
When that happens you need to be sure of where, and with whom, you stand. And be comfortable with the company you keep.