This video explores the key aspects of financial due diligence from a donor’s perspective and how nonprofits can prepare for it effectively.

It explains that beyond regular statutory audits, donor-led due diligence has become critical to assess an organization’s credibility, governance, and fund utilization. The process typically includes an organization review (policies, internal controls) and a project review (budgets, expenses, utilization certificates, and MIS reports).

The video outlines three stages of due diligence:

• Pre-grant: Assessing credibility through past projects, financials, policies, and legal compliance
• Ongoing (recurring): Tracking budget vs. actuals, milestone progress, and compliance during the project
• Post-grant: Evaluating fund utilization, financial accountability, and overall project impact

It also highlights practical steps for NGOs to prepare—such as maintaining clear documentation, aligning finance and program teams, conducting pre-audit discussions, tracking milestones, and actively addressing audit observations.