How can I streamline my financial due diligence?

Most funders ask grantees—prospective and current—to customize their budgets and financial information to fit the funder’s requirements.

Project Streamline, a collaboration of grantmakers and grantseekers working to improve application and reporting practices, recommends a different way: Make requests for nonstandard information the exception rather than the rule. Consider the real costs to nonprofits of customizing budgets and reports—and meet grantseekers where they are.

Ask only for information you will use

For starters, to effectively streamline your financial due diligence, you need to know what information to ask for—and what not to ask for. Think about the following questions before a grant award:

  • What financial information do I need to assess the proposal, the organization’s capacity, and the extent to which grant funds were spent, as proposed?
  • What existing financial documents will provide me with this information?
  • What additional documents do I need, and how can I best obtain them?

Use information grantees already have

Consider this simple principle: Generally accept grant budgets and financial reports in the way the grantee accounts for its funds.

Why use nonprofits’ existing financial information?

  • Reduce the burden—According to nonprofits, “slicing and dicing” their financial information to satisfy funders’ requirements is one of the most time- and cost-intensive parts of grantseeking. By accepting grantseekers’ existing budgets, funders help to keep the “net grant” high.
  • Yield valuable information on capacity—It’s true that some nonprofits struggle with budgets and financial statements. Receiving these documents in the grantseeker’s format can allow the funder to assess the grantseeker’s financial sophistication and organizational capacity.
  • Improve accuracy—Accepting existing materials eliminates the chance that nonprofits will make errors when transcribing budget or financial numbers into a new format. These materials also are more authentic to the grantseeker and more representative of the organization or project.

When circumstances do call for templates, or standard forms requesting particular categories of information, specify only a limited number of line items to allow grantees the flexibility to accurately represent their budgets or financial information.

Keep reading Streamlining Your Financial Due Diligence >>

Still have questions?

Members can access staff experts through our Q&A service by calling 202-580-6560, or post a question to the member community to hear form peers in the field.

Explore our Q&A archive