"Because Shadhika seeks to develop long-term partnerships with those we support, we believe that taking adequate time upfront is absolutely critical and what distinguishes us from many other funding organizations."
How Shadhika Selects its Grantee-Partners
By Kim Burnett, Shadhika President & CEO
May 9, 2019
I’m often asked how Shadhika selects our grantee-partners so I wanted to share the steps we take. We go through an extensive due diligence process that generally takes six months to complete. Because Shadhika seeks to develop long-term partnerships with those we support, we believe that taking adequate time upfront is absolutely critical and what distinguishes us from many other funding organizations. Over the six-month selection process, we carry out the following steps:
STEP 1: Identifying Candidates: The first step in our process is to create a list of possible candidates. Though non-profits are welcome to submit Letters of Inquiry on our website, most potential candidates come from research and networking by our staff in India. Through referrals from other funders or non-profits, attending conferences, following the work of the non-profit sector, and other methods, our staff generates a list of potential candidates.
STEP 2: Criteria Assessment: Staff then completes an initial screening to assess each organization for “fit” against a set of criteria. These include: review of the organization’s mission, physical region of focus, population served, programs, and budget. On this last point, we follow what I refer to as the “Goldilocks Principle.” A budget should not be so small they do not yet have the capacity for the processes and systems in place that we require of our grantee-partners. At the same time, a budget should not be so large that our average grant of $10,000 would have little or no impact on their work. Instead, we look for mid-size, or “just right,” organizations with annual budgets between $100,000 – $500,000 USD.
We also confirm the organization is secular, has a feminist/ human rights frame to its work, and that women make up the majority of the organization’s leadership. These last two criteria are critical for alignment with Shadhika’s mission to empower women and girls.
STEP 3: 501c3 Equivalency Test
Though Shadhika is a 501c3 tax-exempt organization, the groups we support in India are not. Therefore, before we make a grant to an organization, we need to make sure that they operate at similar standards of accountability and transparency that we would require of a non-profit in the United States. To determine this, Shadhika follows the Equivalency Determination Rules laid out by the Council of Foundations. These rules examine whether a foreign non-profit’s organizational documents, operations, and funding structure meet the same requirement of a US public charity. If they pass this assessment, Shadhika will be confident that the non-profit is the legal equivalent of a US public charity.
In addition to following the Council’s guidelines, Shadhika reviews the organization’s board composition to make sure there are no conflicts of interest, that the board is not majority family-led (a common occurrence among many non-profits in India) and that they have a child protection policy in place to ensure responsible oversight of the young women they are serving.
STEP 4: Verifying Status
While we are reviewing whether a potential grantee-partner is equivalent to a 501c3 non-profit in the US, we also verify their status by searching two important databases: the US sanctions and terrorism list and the Indian government’s list of non-profits that have been approved to receive foreign funds. The former is a list of individuals and organizations that the US Treasury Department has determined are entities controlled by sanctioned countries or affiliated with terrorist organizations and/or drug traffickers. We make sure potential grantee-partners are not on this list. The second is a database of non-profits that have filed the necessary paperwork and are in good standing with the Indian government to receive foreign funds. All Shadhika grantee-partners must be on this list to receive funding.
STEP 5: Site Visit
Finally, after we have completed the above due diligence, we arrange for an in-person site visit. Unlike a number of other international funding organizations, Shadhika never funds an organization without completing at least one, day-long site visit. During the visit, our staff meets with an organization’s senior leadership (Executive Director, CFO, board members, program staff) and conducts a visit to see the potential grantee-partner’s work in action and interact with the young women they are supporting.
To be honest, this part of the process is more art than science, relying somewhat on our instincts to determine if a potential grantee-partner is a good fit for us, but even so, there are some clear markers that we look for on these visits.
First and foremost, we assess the work itself – is it effective? Is it of a quality that meets Shadhika’s standards? Is it framed around human rights/feminist principles? Do the young women engaged appear to be benefitting? Is their experience having a positive impact on how their parents and community are viewing the role of women and girls?
Next, we look at the strength of the organization’s team – is it primarily led by their Executive Director/Founder or is leadership and accountability spread out amongst the team? How effective is their board leadership? Does the organization have a strategic plan and/or multi-year strategy? Is staff assessing and monitoring their work and can they speak honestly to challenges and accomplishments?
Other things we look for include, but are not limited to: the comments, demeanor, and feedback that we receive and or observe of the young women that they support – are the young women empowered? Are the young women happy, scared, or withdrawn? Do the young women take a lead to describe the programs? We will also consider how they talk about their work and generally interact with each other and those they serve. Finally, we consider our rapport with them – have they been easy to work with through this due diligence process and are they responsive?
It is only after we’ve completed all of these steps that we make our final decision to invite a grant proposal from a site, or not. Even after they submit their proposal we will often conduct another site visit to meet the key players and discuss and refine their proposed scope. Once a grant is made, we visit at least twice a year in addition to maintaining regular communications via email, WhatsApp and phone.
If you want to learn more about our due diligence process or how we monitor and evaluate our grantee-partners, I encourage you to watch this webinar on our website.
I hope this has answered some of your questions about the process. As always, please let me know if you have any questions.Read more