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A good project should become more convincing as you understand it better.
I took the GWWC pledge in 2018, and I generally favour donating to smaller nonprofits. Over the years, I’ve developed an informal set of checks I use when deciding whether I’m comfortable giving to an organisation.
A well-governed nonprofit can achieve very little, and a messy early-stage project can achieve a lot.
This list is for a different line of questioning to the usual impact/cost effective assessments: do I understand what I am funding, who controls the monies, and whether the organisation is representing itself accurately?
I’d be interested in what others think I’m missing or over-weighting.
What is the legal entity receiving the money?
If it's a nonprofit, does it have a board? Who is on it?
I become wary when one person is running several brands, websites, events, social-media accounts or projects and they are all loosely presented as parts of the same organisation without it being clear what actually belongs to whom.
The same applies to material assets such as websites, mailing lists, intellectual property and brands.
Donors should be able to understand the structure that exists and what is owned by that entity.
Which entity or account receives donations? Who controls spending?
What happens to unspent money if the project shuts down?
If a donation is effectively going into an account personally controlled by the founder, the donor should know that this is what they are doing.
Founder-led projects can be excellent, but they're also difficult to evaluate when the organisation is an extension of one person's work.
So, who approves the founder’s compensation? Are there financial relationships between the nonprofit and companies owned by the founder/staff/board members?
Are family members or close associates being paid, and if so, who approved those arrangements?
To help distil this down, a question I keep in mind is
If you take the founder away, what is left of the organisation?
Sometimes the honest answer is ‘not very much’.
The problem is when public-facing materials imply the existence of a large, durable institution when the underlying reality is one person plus a collection of social media posts, contractors and supporters.
People naturally emphasise different parts of a project to different audiences when fundraising. The underlying facts, though, should remain stable.
If something is described as a nonprofit initiative when speaking to donors, but as a personal or commercial asset somewhere else, I would want to understand why.
Likewise, claims about organisational size, partnerships, institutional backing or the people ‘on the team’ should survive closer inspection. Are the team on the payroll or are they more like mates-with-the-founder/general supporters?
Founders should be able to reel these off easily.
What is the annual budget? How much has been raised? What has the money been spent on?
If a previously significant institutional funder is no longer supporting the organisation, what changed?
None of these questions requires a glossy annual report, but it sticks out for me when a straightforward question produces a long answer that somehow leaves me more confused than before.
Good transparency is the ability to make the important facts clear.
I think this risk is particularly relevant in communities where people are exposed to influential people/prestigious events/impressive job titles/the appearance of rapid momentum.
If enough impressive-looking things surround a project, it becomes easy to assume there must be a substantial organisation underneath them.
Social proof should not substitute for understanding what the organisation actually does and how it operates.
Urgency can be a very effective way of discouraging due diligence.
There is always another launch, event, matching deadline, funding round or opportunity to ‘get in early’.
Nothing wrong with a bit of pizazz.
But I would still ask:
Is the urgency inherent to the opportunity, or is it creating pressure to commit before the basic facts have been established?
A good project should generally become more convincing as you learn more about it.
If asking reasonable questions makes the opportunity feel less tight, I pay attention to that.
At minimum, I would want to know:
The depth of diligence should obviously scale with the size of the donation and the maturity of the organisation.
I would not expect a new project seeking €500 to have the governance infrastructure of an established charity seeking €500,000.
But I would expect both to describe their actual situation accurately.
Things like
This isn't an exact science.
What would you add, remove, or weight differently?
P.S On the other hand, a few flags that don't necessarily bother me as much as they may do others include things like a less-than-pristine website, late account filings, or vague accusations of misconduct not grounded in evidence.
