How to Save Time in Due Diligence

How to Save Time in Due Diligence

In the last 9 months I spoke with 100+ grant managers & program officers conducting due diligence. Here's the clear best practice process that emerged: 

Step 1: Accept that this is a resource allocation problem.

Every foundation has more demand than it can meet. Most diligence processes end with a no. The goal is to decide where time is justified, not to look at every datapoint under the sun.


Step 2: Start with a basic viability screen.

I’d look for early signals of near-term financial viability. When those signals point clearly toward instability, there’s little reason to continue. When they suggest otherwise, deeper diligence becomes worth the time.


Step 3: Look at the organization in one place, across time.

Most time is lost pulling multi-year 990s, copying numbers into spreadsheets, and reconciling budgets and audits just to understand trends. I’d start instead with a single view that shows financial direction across time. One year of data rarely tells you anything useful on its own.


Step 4: Focus on a small number of signals.

Operating reserves over time. Changes in funding levels. Whether funders are accumulating or disappearing.

These signals are not perfect, but they are usually enough to decide whether deeper diligence is warranted.


Step 5: Only collect what’s necessary once direction is clear.

Budgets, audits, financial plans, and impact reports are still part of diligence. The problem is collecting all of them before you know whether the organization is even worth deeper review. Once the early signals justify more work, then it makes sense to go gather the rest.


Most diligence time is spent assembling information. 

Financials sit across years and files. Budgets, audits, and plans arrive separately. Spreadsheets get built just to see direction.

A consolidated view cuts through that and moves decisions earlier.

...and if you want to make it even easier, Impala's AI Due Diligence tool does all of this in minutes and is currently used by Annenberg Foundation, Carnegie Corporation of New York, Margaret A. Cargill Philanthropies and more.

 Check it out here: https://impala.digital/due_diligence