Helen Brown Group

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Fact-Checking 101: Strategies for Reliable Information in the Digital Age

by: Heather Willis, Senior Consultant

Heather WillisIn today’s digital era, the ability to verify information online is paramount for making informed decisions and preventing the spread of misinformation. Fact-checking plays a vital role in prospect research and due diligence, particularly for nonprofits who are seeking to gather reliable data, enhance fundraising strategies, and cultivate meaningful relationships with donors. It is beneficial to periodically remind ourselves of the importance of these practices that enhance our search experiences across various platforms such as Google. Below are some effective strategies to ensure the accuracy and reliability of online content.

Cross-Referencing Multiple Sources

One of the primary methods to verify information is by cross-referencing it with multiple reputable sources. This involves checking if different sources provide consistent information on the same topic. If several credible sources confirm the information, it is likely to be accurate. This approach helps to identify any discrepancies and gain a more comprehensive understanding of the subject matter.

Evaluating the Author’s Credentials [Read more…]

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Tis The Season for Giving!

Whether you are celebrating the 8 nights of Hanukkah, looking forward to the 12 days of Christmas, planning for the 7 days of Kwanza, or waiting for the New Year’s ball to drop, this time of year is typically a time for giving – and for countdowns.

Here at The Intelligent Edge, we thought we would join in the year-end holiday spirit by using this last post of 2023 to re-gift our most popular posts from the past year.

So, with no further preamble, here are the Top 5 Intelligent Edge posts* of 2023:

  1. In Factoring in Compensation, Tara McMullen-King shares her favorite resources for researching compensation and expert advice on how to interpret what you find.
  2. Any life-long learners out there? Kenny Tavares shares his tips and tricks for organizing your efforts in Lessons in Self-Learning.
  3. For Wearing Many Hats Including Research: Strategies for Success, Maura Baron shares her journey from having multiple responsibilities as a part-time research in small shops to becoming a full time prospect research consultant.
  4. Karla Davis’s thoughts on how to stay motivated when asked to research This Guy Again? seems to be resonating loudly and clearly with prospect researchers
  5. And, rounding out our Top 5, The Good, the Bad, and the Ugly: Comprehensive Due Diligence Research focuses on Heather Willis’s vast experience with increasingly important topic of due diligence research.

With that, we wish you a festive season.  We’ll be back with fresh new content in early 2024!

*at least according to LinkedIn Analytics!

 

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The Good, the Bad, and the Ugly: Comprehensive Due Diligence Research

This week we welcome HBG Senior Consultant Heather Willis to The Intelligent Edge. Heather has been with HBG for over 11 years, and her breadth of knowledge on many topics – wealth held in ranching and farming and today’s topic, due diligence, are just two examples of why she’s frequently a go-to expert for all of us on the team. Today, Heather shares important issues to be aware of as you consider due diligence research for your nonprofit. ~Helen

Heather Willis

Heather Willis

The Good, the Bad, and the Ugly: Conducting Comprehensive Due Diligence

In the world of nonprofits, donors play a crucial role in funding and supporting various initiatives. Prospect research serves as the foundational step in any decision-making process with a potential donor, however, it’s equally important for nonprofit organizations to ensure that potential donors align with their values, ethics, and mission.

This is where due diligence comes into play. When a person closely associated with a charitable organization becomes the subject of a scandal, the organization’s reputation can be tarnished too. The stringent due diligence practices seen across the financial services industry to comply with regulatory standards are increasingly being adopted by nonprofit fundraising teams to protect their organization from financial and reputational threats.

By conducting thorough due diligence, nonprofits can establish productive and lasting relationships with donors while safeguarding their reputation and integrity.

Understanding Due Diligence on Donors

Due diligence involves the process of investigating and evaluating potential donors before establishing a partnership or accepting their contributions. This process goes beyond simply checking financial backgrounds; it delves into the donor’s history, motivations, and potential impact on the organization. Comprehensive due diligence helps nonprofits identify potential risks and ensure alignment with their goals.

Steps to Conduct Due Diligence on Donors

  • Define Your Criteria: Clearly define the criteria that matter most to your organization. Consider aspects such as ethical values, mission alignment, financial stability, and the potential for a mutually beneficial partnership.
  • Gather Information: Collect information about the donor from public sources, such as their website, social media profiles, news articles, and press releases. This information can provide insights into their philanthropic history, affiliations, and interests.
  • Verify the donor’s identity, criminal history, and any potential legal issues. Various online platforms offer tools to perform such checks.
  • Financial Analysis: Evaluate the donor’s financial stability and the source of their wealth. This step helps ensure that the donations are legitimate and that the donor’s financial situation aligns with the intended level of contribution. Some sources of wealth may be considered sensitive to your organization.
  • Previous Philanthropic Activities: Research the donor’s history of philanthropic activities. Understanding their past contributions and partnerships can shed light on their values and interests.
  • Stakeholder Interviews: If feasible, consider interviewing individuals who have interacted with the donor, either in the philanthropic sector or otherwise. Their insights can provide valuable perspectives on the donor’s character and reputation.
  • Mission Alignment: Examine how closely the donor’s priorities align with your nonprofit’s mission and goals. A partnership is most effective when both parties share common values and visions.
  • Legal and Regulatory Compliance: Ensure that the donor complies with all relevant legal and regulatory requirements. This includes assessing their potential involvement in any controversies or legal disputes.
  • Conflict of Interest: Evaluate whether accepting a donation from the donor could create conflicts of interest for your organization. This is particularly important if the donor has ties to industries or causes that could compromise your nonprofit’s integrity.
  • Consult Experts: For more complex cases, consider seeking professional advice. Legal experts, financial analysts, and ethical consultants can provide valuable insights to aid your decision-making process.
  • News: General news helps you stay alert to trends, but for mitigating reputational risk, you’ll want the ability to narrow in on negative news. Given the increased focus on environmental, social and governance (ESG) commitments, it’s also useful to have the option to narrow to ESG news. Not only can this help you identify donors who might NOT be a good fit, but it can also help you identify prospects who align with your own mission.
  • Sanctions, watchlists and PEPs lists: Geo-political volatility like we’re currently experiencing means that sanctions and PEPs (politically exposed persons) are changing rapidly. Doing business with a sanctioned individual or entity could do more than put your reputation at risk; it can lead to regulatory risk and fines.
  • Legal news: This type of news can help you see if an individual or entity has a litigious past that could put your organization in jeopardy.
  • Company and executive information, including beneficial ownership: When it comes to corporate sponsors, you need to look beyond the entity itself. For example, a company may have hidden beneficial owners who might not be a good association for your nonprofit. Likewise, corporate hierarchies can show tangential relationships that could prove problematic or another likely corporate sponsor, but the only way you’ll know is to do your due diligence.

Balancing Ethics and Accountability

While the intention behind donor due diligence is to maintain transparency, accountability, and ethical standards, it is not without its controversies.

  • Preserving Donor Privacy vs. Ensuring Transparency: Controversy often arises from the tension between preserving the privacy of donors and ensuring transparency within nonprofit organizations. While donors may wish to keep their personal information confidential, nonprofit organizations argue that transparency is essential to demonstrate their commitment to ethical fundraising practices and maintain the public’s trust. Striking a balance between these two perspectives can be challenging, as both donor privacy and organizational transparency are valid concerns.
  • Potential Chilling Effect on Philanthropy: Critics argue that if donors feel their intentions are being scrutinized too closely, they might be discouraged from contributing to causes they care about. This fear stems from the idea that donors may perceive the due diligence process as invasive and overly skeptical. This perspective emphasizes the importance of fostering a philanthropic environment that encourages generous giving without unduly deterring potential donors.
  • Selective Acceptance of Donations: Some argue that extensive due diligence may lead organizations to reject donations from sources that may have had controversial affiliations or actions in the past. While this may be seen as a way to maintain ethical purity, critics point out that it could result in missed opportunities to redirect funds towards positive change. The debate lies in determining the appropriate level of scrutiny that aligns with an organization’s values while still capitalizing on potential contributions for the greater good.
  • Misuse of Donor Information: Organizations that collect and store donor data must ensure robust data protection measures to prevent leaks, breaches, or unauthorized access. Mishandling sensitive donor information not only jeopardizes donor trust but also raises ethical and legal questions about the responsible use of such information.
  • Uneven Implementation and Resource Allocation: The controversy surrounding donor due diligence is compounded by the uneven implementation and resource allocation across different nonprofit organizations. Larger, well-funded organizations might have the capacity to conduct thorough due diligence, while smaller ones might lack the resources to do so. This leads to potential disparities in accountability and transparency, which can undermine the sector’s credibility as a whole.

Conducting due diligence on donors is a critical practice that nonprofit organizations should prioritize to protect their values, reputation, and mission. While the process may require time and effort, it’s an investment that can lead to meaningful, sustainable partnerships with donors who are genuinely aligned with your cause.

By following these steps and staying diligent, nonprofits can ensure that their relationships with donors are based on trust, transparency, and shared objectives. The debate over due diligence on donors underscores the complex ethical landscape within philanthropy. While the practice is aimed at maintaining transparency, accountability, and ethical standards, it is not without its controversies.

Striking a balance between respecting donor privacy and ensuring organizational transparency, while also avoiding a chilling effect on philanthropy, requires careful consideration and open dialogue. As the philanthropic sector continues to evolve, finding common ground on this issue will be crucial in fostering a climate of ethical giving and meaningful impact. For an extensive list of due diligence resources please visit the Helen Brown Group’s Due Diligence Resources Page and let us know if you have others that we may have missed!

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Resilient nonprofits can face anything

Heather Willis

HBG Senior Consultant Heather Willis

It hasn’t been too difficult to find articles in the press about the success or failure of companies to survive (or, indeed, thrive) during the past 18 months, but what about nonprofits? How have they fared? And for the ones that have been successful, what has been their secret? This week my colleague Heather Willis does a fantastic job of walking us through a series of reports from the Charities Aid Foundation which has surveyed nonprofits across the globe multiple times during the Covid19 pandemic to discover and share the game plan for resiliency in our sector. ~Helen

When the World Health Organization declared COVID-19 a global pandemic in March 2020, Charities Aid Foundation (CAF) America set out on a mission to document the impact of the crisis on nonprofits worldwide. CAF has produced nine surveys and reports since, which represented the voices of 3,500 organizations operating in hundreds of countries and representing 15 causes.

These reports take account of charities around the world that have been performing their duties under extreme pressure. While many organizations have had to close in the last year due to new problems posed by the COVID-19 virus, others that have remained open have showed amazing tenacity and persistence in the face of new challenges.

What CAF found through this research is encouraging and uplifting. There was an expansive picture of persistence, humility, compassion, and empathy. The pandemic has had the counterbalancing impact of bringing the worldwide community closer together for a purpose that transcends borders and cultures, at a time when many people are feeling socially isolated.

In the Beginning

The vast majority (94.84%) of the respondents’ countries imposed coronavirus related restrictions that had an immediate impact on the organizations.

CAF reported in the first survey that 67.93% of the respondents saw a decrease in funding and reported difficulties in reaching donors, while 33.97% indicated an increase in operational costs. More than half were unable to fully meet the expectations of those they serve due to staffing limitations (48.58%) and system-challenges (37.57%). Restrictions on travel, a key programmatic element for many organizations, affected 63% of the respondents’ operations.

Despite the serious challenges, 90.10% of respondents continued to serve their communities. Although they had to suspend certain activities, almost two thirds of the organizations surveyed (61.87%) continued their operations remotely and 28.23% maintained full operations (11.03% working in office and 17.20% working remotely).

Mid-Pandemic

Volume 5 reports that the majority of responding organizations, 97.16%, were able to maintain their operations, and another 2.84% were not operating at that time. While the data suggests a marginal improvement compared to the Volume 3 survey in June when 92.47% respondents were operating, the organizations that had to close down during the past months were poorly represented among current respondents.

Of those that closed operations or some programming, the majority indicated the incompatibility of their services and programs with online delivery as their principal reason.

                                                                       Reasons for closing operations or programming

In one three-month time frame, 9.98 percent of surveyed organizations did not receive any money, and many were struggling to meet rising demand for their services. Individual donations continued to be the primary source of income for more than 70% of the organizations surveyed. Since the previous study, the number of groups receiving corporate funding climbed by 10.41%. Subsidies from the government also helped to mitigate the crisis’s harmful consequences. Since the previous survey, the number of groups getting government funding also climbed by 12.50 percent.

Charities had to adapt quickly to constantly shifting demands and donor interests promulgated by the pandemic. Normal fundraising channels such as special events and annual campaigns were closed off due to social distancing regulations. Charities that were nimble enough to shift all or most of their fundraising to online portals at their websites fared better.

In a decidedly challenging task, the Volume 5 survey asked respondents to rate the most critical skills for success during those months.

In answer to the question “What skillsets were most useful to your organization during the months impacted by the coronavirus pandemic?” respondents ranked skill sets as follows:

  1. COMMUNICATIONS (telling your story, connecting with your stakeholders)
  2. FUNDRAISING & DONOR RELATIONSHIP MANAGEMENT
  3. FINANCE (effective fiscal management, strategy, contingency planning)
  4. TECHNOLOGY (creating virtual networks, developing apps)
  5. EXECUTIVE MANAGEMENT & BOARD OF DIRECTORS
  6. NETWORKING

To deal with the new problems, an overwhelming number of responding organization were able to design and implement creative ideas and activities. Ninety-seven percent of responders agreed that innovation is necessary.

Large organizations (with 21+ employees) were roughly twice as likely to report that they were surviving or thriving than small organizations (1-5 employees). Smaller organizations were more likely to face limited staffing resources due to illness and lock-downs. Organizations with five and fewer employees are 56.5% were more likely to say that they were “struggling” as a result of the COVID-19 pandemic, as opposed to all other larger organizations surveyed.

Currently – Unfortunately not Post-Pandemic

Charities responding to the survey had many things in common, but three strong themes emerged: smaller organizations have had a more difficult time; the way charities fundraise has had to fundamentally change; and many organizations have adapted to view disaster and crisis planning as a core part of good charity governance.

Given their tenacity during the epidemic, over 64% of respondents are confident in their capacity to continue operating indefinitely under present conditions.

Organizations were asked the question “How confident are you in your organization’s ability to successfully face the next crisis?” Their answers were:

Surviving to Thriving

Over the course of CAF America’s research, they summed up their observations in Volume 8 and have detected six thematic areas to a charity’s ability to survive such a significant interference with their operations, finances, and staff.

Technology

There is a direct correlation between organizational resilience and the ability to adapt to online tasks that will remain the case post-pandemic. Key areas of improvement in resilient organizations included fundraising through digital technology, identifying digital tools to better connect with stakeholders, formulating digital strategies, and enhancing online programs and service offerings.

Communication

Improved communication is necessary for fundraising and storytelling to entice more support, engaging impact reporting, communications with non-digital and other stakeholders, and video presentation to improve outreach. The trend towards more cost-effective communication on social media channels and through online newsletters and reports is likely to continue post-pandemic.

Fundraising

The pandemic has highlighted the fundraising issues that smaller charities confront when their entire workforce is focused to meeting the growing requirements of their recipients. Sixty-five percent of the nonprofits unable to devote resources to creating and implementing new fundraising activities had fewer than twenty staff.

Finance

Areas critical to charities’ long-term success include building and sustaining financial reserves, strategic planning, contingency planning, and developing a risk management framework.

Leadership

While the majority of charities have faith in their leaders, they still need to enhance their skills and strategy. Nearly 60% of the charities polled said they wanted to improve their change management skills both during and after the crisis. Strategic planning, developing crisis-resilient teams, organizational mental health and well-being, and effective internal communication and staff engagement are among the other abilities that need to be improved.

Diversity, Equity and Inclusion

To strengthen their long-term strategy and build resilience, charities recognize the importance of incorporating DEI into bigger talks about global philanthropy. The pursuit of DEI to develop more effective organizational and programmatic outcomes is essential for social progress.

Donors are showing an increased commitment to flexibility while nonprofits now understand that impactful philanthropy requires collaboration, flexibility, commitment, and streamlined progress measurement strategies.

As never before, non-profits are being asked to put resilience into practice. Nonprofits will move forward from being aware of the new normal to clarity of renewed purpose, and then to taking deliberate action, as a result of the dialogues taking place today between staff and boards. They will be focused on instilling energy, encouraging renewed spirit and re-dedication to mission, and exhibiting, in word and deed, an increasingly positive attitude toward mission.

Further reading

Nonprofits show resilience and initiative during second year of pandemic, University of Washington News, December 14, 2021

Is your organization thinking about continuing working remotely? Some things to ponder are listed in this Nonprofit Times article, “Remote Possibilities – What Comes After Zoom?”

 

 

 

 

 

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Valuing Real Estate in the US West

Last week at the (sold out!) NEDRA conference, this week’s guest author Heather Willis spoke with her HBG colleague, Kelly Labrecque, on finding real estate values in the US west and east. “Country Mouse/City Mouse” was a big hit, and I asked Heather to share tidbits from her portion of the presentation with us today. (If you’d like to see the slides from their presentation, let us know!) And now, here’s Heather:

It’s that time of year again in the West; the snow is melting, tulips are flowering, calves are being born, and the birds are singing. It also means the year- end real estate market analyses, the new agriculture statistics reports, and the top ten landowners, have been published. Exciting right!?

Ok, you might not have the desire or the time to read through all of these reports when researching a prospect who owns a farm or ranch, so I will point out a few changes from last year and try to give you some insights into an extremely diverse and difficult group of prospects to research. [Read more…]

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Prospects That Cultivate Themselves

Montana ranchThis month I’m delighted to welcome as guest blogger HBG team member Heather Willis (who took this picture from her “back yard”)! A skilled ranch hand herself, Heather is our resident expert on all things farming and ranching, and in this article she shares her knowledge on researching major gift prospects who bought the farm.

Have you come across prospects every now and then who own a farm or ranch? Valuing these assets can vary widely depending on what part of the country they are located. Often we are left with more questions than answers as to how to use the information to estimate wealth.

Having lived in the West most of my life, currently in Montana, I am gaining an understanding of which ‘types’ of farmers and ranchers are the better prospects. There are so many variables to consider that I think it might be more helpful to look at farmers and ranchers in terms of characteristics, like a modeling project, in which you evaluate which ones indicate more wealth than others. [Read more…]

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Donor Identification in the 21st Century

Donor-Identification-in-the-21st-Century800x400As you probably remember from my previous article on this topic, it’s a myth that high net worth people don’t use social media. Studies show that the adoption rate in that demographic is growing every day, too.

That’s great for those of us in fundraising, because new sources like these help us to (as Chris Carnie recently discussed in a terrific podcast with Ben Rymer) craft a donor-centered relationship for each individual donor – because we can (and should) treat them as individuals. [Read more…]

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Welcome Heather to HBG!

It is with great pleasure that we welcome our newest team member, Heather Willis. Heather was one of the first people I trained when I began my consulting business and I have always been impressed by her intelligence, professionalism and can-do attitude. Heather’s background in prospect research includes working for the Rocky Mountain Elk Foundation and for Carroll College. For the past seven years, Heather had been a freelance researcher and owner of her own company, Willis Research Services in Buffalo, Montana.

We’re delighted that Heather is joining our team and are excited about the addition of talents she brings to our Group and our clients.

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