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#1507572 - 02/09/11 07:36 PM Enhanced Due Diligence on Non Profits
Intraspector Offline
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We have recieved guidance from our regulator (FDIC) to conduct enhanced due diligence on high risk Non Profit Orgs and document the evaluation of the principals, financials, verification of source and use of funds, evaluation of large contributors and reference checks.

Any suggestions on how to evaluate large contributors?

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#1507588 - 02/09/11 07:44 PM Re: Enhanced Due Diligence on Non Profits Intraspector
Elwood P. Dowd Offline
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What your examiners have recommended to you is a fair paraphrase of what the examination handbook directs you to do.

Do you have any high risk NGO's? They're not all that common...
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#1507849 - 02/10/11 02:31 AM Re: Enhanced Due Diligence on Non Profits Elwood P. Dowd
Pat Patriot Act Offline
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If I were to go to that extent, then I'd treat it similarly to CDD/EDD on any other party. I'd have the NGO provide the "large contributors" list and any due diligence they've conducted, then I'd do additional verification/research (OFAC, PEP lists, negative news) on the list. The end product would be a document detailing this. For example:

Sam Slade - Slade, CEO of Ripov Oil Corp, personally donated $3.5 million to the Endangered Children Foundation in 2010. Negative news, OFAC, and PEP list searches yielded no derogatory information on Slade.

XYZ Corp - XYZ Corp, an electron tube manufacturer, donated $1 million to the Endangered Children Foundation in 2010. Negative news and OFAC list searches yielded no derogatory information on XYZ Corp.


I know of no guidance suggesting it should be done exactly as above; however, a run-of-the-mill due diligence document should be suffice.

But, as Ken suggested, most NGOs aren't high risk. Performing everything suggested in the manual is excessive for the vast majority of NGOs. Be careful not to handcuff yourself to an "overkill" process.
Last edited by Hovis; 02/10/11 02:32 AM.
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