How do you conduct due diligence on social impact organizations?

1 Define your criteria

The first step is to define your criteria for evaluating social impact organizations. These may include their vision, mission, theory of change, impact model, target beneficiaries, geographic focus, sector, stage, size, governance, financial health, legal compliance, and risk factors. You should also consider your own objectives, expectations, and preferences for the type and level of engagement you want to have with the organization.

2 Research the organization

The next step is to research the organization using various sources of information, such as their website, annual reports, social media, newsletters, media coverage, awards, ratings, certifications, and testimonials. You should also look for independent and credible reviews, evaluations, audits, or studies that validate or challenge the organization's claims and results. You should aim to get a comprehensive and balanced picture of the organization's history, achievements, challenges, and future plans.

3 Interview the organization

The third step is to interview the organization's representatives, such as the founder, CEO, board members, staff, or advisors. You should prepare a list of questions that cover the key aspects of the organization's strategy, operations, impact, and finances. You should also ask about their strengths, weaknesses, opportunities, and threats, and how they handle feedback, learning, and improvement. You should use the interview as an opportunity to establish rapport, trust, and alignment with the organization.

4 Visit the organization

The fourth step is to visit the organization's office or project site, if possible. This will allow you to observe the organization's work environment, culture, and values, and to interact with their beneficiaries, partners, and stakeholders. You should also verify the organization's physical assets, such as equipment, facilities, or inventory, and check for any signs of fraud, mismanagement, or inefficiency. You should use the visit as a way to validate or clarify the information you gathered from the previous steps.

5 Analyze the data

The fifth step is to analyze the data you collected from the previous steps and compare it with your criteria. You should look for evidence of the organization's impact, such as indicators, metrics, outcomes, and stories. You should also assess the organization's sustainability, scalability, and innovation potential. You should identify any gaps, risks, or red flags that may affect your decision or require further investigation. You should use the analysis as a basis for making a recommendation or a judgment.

6 Communicate the results

The final step is to communicate the results of your due diligence to the relevant stakeholders, such as your team, board, donors, or partners. You should summarize your findings, conclusions, and recommendations in a clear and concise report or presentation. You should also share your feedback, appreciation, and expectations with the organization. You should use the communication as a way to foster mutual understanding, respect, and collaboration with the organization.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?