Before you recommend a grant to a nonprofit, consider reviewing its financials. Financials are easy to access in many cases, and they contain a host of insights into how the nonprofit operates.
Not every grant warrants in-depth financial review, of course, and not every nonprofit has the capacity to produce perfectly polished financial statements. Some foundations right-size their due diligence, spending more time reviewing financials for new grantees, large grants, or complex grants.
Keep in mind: Financials are just one way of looking at any multifaceted organization, and the stories behind the numbers often are more important than the numbers themselves. Always review financials with a mind to an organization’s unique circumstances and always supplement financials with other information about the nonprofit’s programs, outcomes, staff, and board.
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