Financial due diligence for a non-profit involves carefully examining its financial records and transactions to ensure accuracy, transparency, and compliance with regulations. This involves reviewing financial statements, budgeting processes, internal controls, and compliance with donor requirements to safeguard the organisation’s assets, maintain trust with stakeholders, and support effective decision-making.

This resource will provide you with an overview of financial audit and due diligence requirements expected from an organisation. The key aspects covered are:

1. Key elements of financial due diligence
2. End-to-end due diligence process
3. Preparedness required by organisations across different tracks of financial due diligence

This resource is recommended for leadership and finance team of a non-profit.

Resource Summary:

The process of due diligence is vital for building trust and openness between charities and donors. It involves carefully checking financial records, making sure the charity follows the rules, and assessing how well it’s doing overall. Donors, especially from businesses, want to know everything about the charities they support, so it’s important to give them a full picture of what’s going on.

Reports on finances are a big part of this process, showing donors where the money goes, if the charity sticks to its budget, and how well it’s doing financially. Regular updates on finances help charities keep track of their progress and let donors know how their money is being used. It’s crucial to compare what was planned in the budget with what actually gets spent to spot any differences that need attention. When it comes to audits, teamwork between the finance and program teams is vital to make sure everything is reported accurately and follows donor rules. Being clear about money matters, including if donations are anonymous, is more important than ever for showing transparency and good practice. Annual reports are a great way for charities to show off their successes, how they’ve used funds, and their ability to take on new projects.

Overall, due diligence reports give a complete view of a charity’s finances, progress on projects, what audits find, and how they’ve acted on previous advice. By being open and following the best rules for reporting finances, charities can build trust with donors and others, making it easier to get funding and support in the future.