Over the last few years, there has been a considerable growth in the number of cases, wherein the funds provided to NGOs have been misused and organizations have indulged in financial mismanagement/corruption.
Therefore, donors these days are very much concerned about the charities they made and the money donated is used for legitimate purposes and is reaching its intended beneficiaries.
When donors give money to charities, especially large amounts of money, it’s vital to ensure that adequate ‘monitoring’ takes place. In short, there should be adequate steps to verify that the money is going to a genuine organization and the funds are not being misused.
Most donors these days perform due diligence before providing a grant to an NGO to have clear oversight of how charity funds are used across the full scope and the impact their support creates. Due diligence will usually involve judging the quality and completeness of initial information obtained and then deciding whether further checks or inquiries are necessary.
This guide will be of interest to donors and organisations which give grants to charities to deliver project work. This will also help NGOs to understand the process of due diligence so that they are able to prepare themselves better and enhance their chances of getting funding for their organization.
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