Due diligence, sanctions checks and repairing harm
Due diligence is a continuing effort to understand a recipient and the risks of a proposed activity. It should protect charitable resources and affected people while keeping lawful assistance possible.
Reviewed 17 October 2026. Financial figures and professional roles retain the dates stated in their sources.
Investigate proportionately
Confirm the recipient’s legal name, registration, leadership, bank details and proposed use of funds. Examine financial statements, subcontractors and relevant prior findings. A small local education project and a complex cross-border operation may require different levels of review. More paperwork is not automatically better protection if nobody tests whether the information is reliable.
The Office of Foreign Assets Control (OFAC), part of the United States Treasury, publishes a charitable-sector risk matrix. It identifies factors useful for reviewing grantees while warning that those factors alone do not establish illicit activity. Work in a difficult location can create heightened risk without making a charity or the people it serves culpable. [1]
Apply the actual sanctions rules
OFAC guidance states that charitable donations by financial institutions must comply with sanctions requirements and should be checked against relevant sanctions lists. Screening must resolve whether a potential name match is actually the same person or entity. Similar names, religious identity and political controversy cannot substitute for identity verification. [2]
OFAC also maintains humanitarian guidance, including information for nongovernmental organizations (NGOs). A reviewer must identify the applicable sanctions program, authorization or license rather than assume that all assistance in a sanctioned environment is forbidden. Conversely, a humanitarian description does not automatically authorize every transaction. The terms and jurisdiction matter. [3]
Monitor and respond to warning signs
A practical agreement can identify permitted purposes, reporting dates, safeguarding expectations and procedures for investigating serious concerns. Review should continue after payment: changes in leadership, unexplained transfers or credible reports of abuse may justify additional inquiry. A warning is a reason to investigate; its reliability and relevance still need to be assessed.
If a concern is substantiated, possible responses include correcting controls, protecting whistleblowers, replacing a delivery partner or stopping a prohibited transaction. The appropriate response depends on the facts and applicable rules. Preserve records and explain the decision without publishing sensitive personal information that could expose beneficiaries or staff to retaliation.
Remediation should track whether harm was repaired and whether the failure can recur. A public statement that a partner shares the donor’s values does not answer an operational failure. At the same time, refusing all work in vulnerable communities can itself cause harm. The aim is a defensible decision grounded in specific risks, effective safeguards and lawful delivery.
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Holding foundations & partner organizations accountable