Preparing for Funder Due Diligence
Before making a cross-border grant, a funder will usually ask for information about the organization receiving the funds. The exact documents vary, but funders commonly need to understand an organization’s legal status, governance, financial arrangements, and ability to receive and account for the grant.
Keeping this information current can make applications, grant agreements, and payments easier to manage. It can also reduce the time spent answering the same basic questions for different funders.
This page sets out the records and practical steps that are commonly useful. It describes typical funder requests, not legal or tax requirements for your organization. If you are unsure about a request or a local rule, seek advice in the country where you operate.
Why funders request information
A funder has legal, financial, governance, and banking responsibilities of its own, in its home country and sometimes in the countries where its grants are used. Much of what it asks for is evidence it needs to keep in its grant file to meet those responsibilities.
Requirements vary with the funder, the grant, the countries involved, and the risk of the work. Due diligence is based largely on the information a funder can review and retain. Strong work in the field may not be visible in a grant file if basic records are incomplete or out of date. Those records can be prepared before anyone asks for them.
Information to keep ready
Requirements vary, but many funders need information in six areas. Keeping the relevant records current will help you respond quickly when a request arrives.
1. Your legal status
A funder needs to confirm that your organization is a legal entity, registered where it says it is, and operating under the name it uses. Registers in many countries are not online, not public, or not in a language the funder reads. You may be asked to supply the proof yourself.
Keep current copies of your registration certificate and governing documents somewhere you can send them the same day. Check that your legal name, address, and stated purpose match across your registration documents, website, and applications. Correct or explain any differences. Differences between an organization’s own records can lead to follow-up questions.
2. Your board and senior leadership
Funders screen people as well as organizations, because sanctions and political exposure attach to individuals. You may be asked to identify your governing body, senior leadership, and founders. A funder may also want evidence that decisions are made by the body your governing documents describe. A board that has not met in years raises questions no one can answer.
Keep a current list of your governing body and senior leadership, with roles and appointment dates. Record each person’s name as it appears on their identity documents.
3. Your financial records and controls
A funder needs to see that your organization can receive money, control it, and account for it afterwards. Some funders will ask for audited financial statements. Where an audit is not required locally, is not available, or would be disproportionate for an organization of your size, say so and provide the best financial information you have:
- financial statements prepared by an accountant, even if unaudited
- an income and expenditure statement prepared by management, with bank statements for the same period
- your most recent filing to your national authority
- a short description of who approves payments, and up to what amount
- a report you have prepared for another institutional funder
If an audit is required for a grant, ask whether its cost can be included in the grant budget.
Funders also look for basic separation of duties: the person who approves a payment is not the person who spends it, and someone else records it. A useful benchmark is whether you could show how you spent last year’s money, line by line, if asked.
4. Your suppliers, partners, and onward grants
A funder may ask how you select and oversee significant suppliers, contractors, implementing partners, or organizations that receive onward funding. Keep a short written procedure and enough records to show how major choices were made: quotations, selection notes, conflict-of-interest declarations where relevant, and agreements with significant partners.
5. How you receive grant funds
International payments may pass through one or more banks before reaching your account. A bank in that chain may request further information, delay a transfer, or return it. This does not necessarily mean that the funder or your organization has done anything wrong. Ask your bank in advance how international transfers are received and what information the sender should include.
Your own country’s rules matter as much as the funder’s. Many countries regulate the receipt of foreign funding: you may need to register first, obtain approval for a specific grant, hold funds in a designated account, or report what you receive. These rules change, and a funder’s advisors will not always know them. Tell the funder at the start what your country requires, so a grant is not agreed and then blocked at payment.
6. Consistent names and identifying information
Screening compares names across documents and lists, so small variations create work: a name transliterated two ways, an acronym in one document and a full legal name in another, a director spelled differently on a board list and a passport. Keep one list that records:
- your legal name, in its original script and in Latin script
- former names, acronyms, and translations in use
- your registered address
- your leaders’ full legal names, as their identity documents show them
Use that list in every document that leaves your organization.
Share only what is needed
Do not assume that more disclosure is always better. If a request is unclear, ask what information is needed, why, who will have access to it, and how it will be stored. Provide the minimum necessary for the stated purpose, especially where records contain personal or sensitive information.
Routine organizational due diligence will not usually require beneficiary lists, personnel files, or internal correspondence. Sharing them can create data protection problems for both sides and, in some places, put people at risk. Where personal information about leaders or signatories is needed for screening, it is normally limited to details such as name, role, and date of birth.
Responding to a request
The parts of the timeline you control are the completeness of your first submission and the speed of your answers. A partial first submission tends to start a round of follow-up questions rather than starting the process early. If a document is unavailable, explain why and provide the closest available evidence rather than leaving a gap.
Paragon's Role
Paragon Philanthropy works for grantmaking institutions across many countries. It manages the due
diligence and documentation behind direct cross-border grants. Paragon does not make grants, does not raise funds for any organization, and does not refer organizations to donors.
Core records to keep current
A compact checklist. Keep these in one place, current, and ready to send.
- Registration certificate and governing documents
- Current board and senior-leadership list, with roles and full legal names
- Recent financial statements, bank records, and relevant national filings
- A short description of who approves payments, and up to what amount
- The procedure and records for selecting significant suppliers, partners, or onward grantees
- Bank account and international payment details
- The list of legal names, acronyms, former names, translations, and transliterations in use
- A note of your country’s requirements for receiving foreign funds