A practical guide to investing your money for ultimate results.

Due Diligence Checklist

From The Eternity Portfolio: A practical guide to investing your money for ultimate results.

Permission given to use by author Alan Gotthardt

Met with him in Atlanta last year. 2013

Alan is updating his book and there will be a revised edition in the fall of 2014!

Richard’s comments are in RED.

This book specifically addresses how to be a good steward and using God’s money wisely in a non profit Christian ministry. However, these ideas can be applied to a secular investment also. Some of the points do NOT necessarily apply to a business investment.

These principles apply to making substantial investments in an organization, whether it is in the 100’s, thousand’s or millions of dollars!

Again, the comments in RED are solely Richard Dassow’s and NOT Alan Gotthardts.

When you’re considering whether to fund a specific organization, there are many issues to consider. Here’s how to get started!

Review marketing/collateral information such as the organization’s website, brochures, annual reports, and presentations.

If possible, conducted a site visit or vision trip to examine the operation firsthand.

For large gifts, meet with leadership to better understand who they are and where the organization is headed.

 Have they approached you for an investment or did you search them out? What are your goals and motivations in making an investment in this organization?

Either through a face-to-face meeting, telephone call, or collaterral information, try to get a sense for the following:

1.     ORGANIZATIONAL ASSESSMENT

A. PURPOSE

1.       What is the mission of the organization?

          How clear is the mission statement? Has there been mission drift?

What specifically are the major problems/issues it is trying to address?

2.       What makes this organization unique?

Using principles of Good to Great, have they established a clear need? Is the organization Passionate about what they are doing? Their mission. Is the Ex. Director passionate?  What are their resources? How is Need, Passion and Resources combined for exponential growth? Do they have the right people on the “bus”, the wrong people off the “bus” and the right people in the right seats?

3.       What is the scope of the organization’s activities (local, regional, global, country-specific)?

4.       Are there well-developed, high-level goals that have been established to mark progress and give guidance to staff and donors?

          How do they measure performance?

B.      PEOPLE

1.       How well do I know the leadership?

Are they visionary? Capable of leading? Passionate about the mission? Do they value relationships? Is the Ex. Director passionate?  What are their resources? How is Need, Passion and Resources combined for exponential growth? Do they have the right people on the “bus”, the wrong people off the “bus” and the right people in the right seats?

2.       What qualifications do those in leadership have?

3.       Does the board of directors represent a cross section of skills and qualifications needed to successfully guide an organization of this type?  Is there a job description for the board members? 

Is the board limited to policy making or do they do a lot of the work? If so, is this good or bad?

Are the board members investing financially in the ministry in a significant way?  Do we know what percentage of the total funds come from board members? How important do we think that is?

4.       Do the staff members understand the organization’s missions and exhibit a genuine concern for their area of ministry? Do they seem content and motivated?  How do I know this? Have I talked to them? Taken some of them to lunch? Is this important? Why?

C.      PHILOSOPHY

1.       How receptive is the organization to feedback and questions?

Do leaders appear transparent about problems, successes, and failures? Are staff interested in even talking to us? How important is that to us? Obviously with a small donation it may not be important.00… but if we have a significant financial investment to make it is or should be! Can we make a designated or restricted gift…and work with them in the planning?

How about accountability? Can we structure the funds to be released as progress is being made? Are they open to this? How involved to we wish to become?

2.       How are donors treated? Is there a demonstrated accountability for the faithful use of funds? How are volunteers recruited, trained, and utilized?

3.       Does the ministry seek to create leveraged results for the kingdom (i.e., multiplication)?

4.       Do there seem to be any “integrity fault lines” running through the different aspects of the ministry? It’s fund-raising? Programs? Communications?

D.      PROCESS

          1.       Is there a written strategic plan for the ministry?

                   A 5 and 10 year plan?

          2.       As it carries out its mission, how is the organization

perceived within the community?

3.       What are some of the new initiatives or activities the organization is undertaking? 5, 10, 15 year plan.

4.       Where does the financial support come from? A small group of major donors or a broad audience? How willing are they in sharing this?

          5.       Are thee audited financial statements?

6.       Does the organization appear to be staffed appropriately to execute the mission?  Good to Great concepts?

E.      PERFORMANCE

1.       How does the organization measure its progress toward accomplishing the mission?

Are there specific targets and objectives for the leadership as well as staff within the organization?

2.       Does the organization communicate regularly and effectively with the donors? What is the frequency?

          3.       Is the organization accomplishing its mission?

11.   `PROJECT ASSESSMENT

                   If we are investing in a specific project.

A,      ORGANIZAITONAL FIT

1.       Does this particular project  address one of the core objectives of the ministry? In other words, is it part of a focused, concentrated effort toward accomplishing the organization’s purpose, or does it go outside of core competencies and mission?

2.       Is this project or activity already being conducted successfully by another organization, and if so, are there reasons to duplicate?

          3.       How much of the funding is already committed?

B.      PROJECT REVIEW

1.       Is this a onetime investment for a project that will become a self-sustaining activity?

2.       Other than in the area of funding, where are the faith hurdles? In other words, where must God supernaturally create the results for the project to be successful?

3.       Do the financial projections seem reasonable? Are they too optimistic? Do they leave anything out? Is there a plan for contingencies?

4        Are there specific, measurable objectives to be accomplished?

          5.       How will progress be reported?

III.   FINAL ASSESSMENT

1.       Have I (we) spent sufficient time seeking God’s will through prayer Bible study, and wise counsel? Do I (we) have any wrong motives or conflicts of interest that should prevent this investment?

2.       Assuming all indications are positive, are there any nagging questions or concerns that should be resolved?

3.       Whether or not this appears to be a great opportunity, do I (we) feel specifically led to be involved at this time?

          Have I (we) asked the 4 questions from Ben Carson’s book: TAKE THE RISK; Learning to Identify, Choose, and Live with Acceptable Risk.

Additional Resources:

Generous Giving   www.GenerousGiving.org

Chapters in the book: http://library.generousgiving.org/book_reviews/display.asp?id=47

The Eternity Portfolio   www.EternityPortfolio.com

Take the Risk: Learning to Identify, Choose and Live with Acceptable Risk.

Money, Possessions, and Eternity, Randy Alcorn.