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From co-design sessions, to conducting surveys and hosting roundtables—we've been working on a shared approach to due diligence at London Funders. Read below to find out more about the journey we've been on, and the learning that has emerged.
An initiative to develop a shared approach to due diligence in London began in 2022, building on the experience of members during Covid when they agreed to accept the due diligence carried out by another funder to fast track their own decision making.
Over 18 months, 45 members participated in six roundtables and workshops to identify and agree a standard checklist for due diligence, and to develop a platform that would enable funders to view and accept the checks carried out by others. These were members from all sectors: independent foundations, local authorities, housing associations, local giving schemes, corporate trusts.
The next step was to pilot the approach. In January 2024, we put out a call for members to join a pilot, focused on grants of between £10k-£50k a year over 1, 2 or 3 years (so a spread of £10k to £150k grants). Five funders committed to participating, but between them they did not meet the conditions for an effective pilot, i.e. similar enough grant programmes and a common pool of applicants between them. We therefore decided to change course and explore the potential for piloting the shared approach within a single borough.
From the beginning of 2025, the goal was to assess the feasibility of this pilot and explore potential pathways for implementation.
Recognising the importance of collaboration as a core principle of the pilot, we decided to focus our efforts on a smaller-scale implementation. This would allow us to test the model in a more controlled environment while engaging with funders who were already exploring or committed to collaborative practices.
Through this lens, we identified Lambeth and Southwark as two boroughs with promising ecosystems. Both areas had active local funders and networks that were already experimenting with collaborative approaches with initiatives such as “Funding differently” or “Radically reimagined funding”. London Funders runs local funders forum meetings which gave us the chance to better understand the landscape, build relationships, and gather insights into existing practices.
Following these forums, we held a series of one-on-one meetings with various local funders. These conversations were instrumental in mapping out the different approaches to due diligence currently in use, as well as identifying opportunities for alignment and collaboration that could support the pilot.
As part of the exploratory phase, we held individual meetings with a range of local funders in Lambeth and Southwark to better understand their current practices and perspectives on collaboration. A key idea we tested was the concept of a shared due diligence approach—sometimes referred to as a 'due diligence passport'—that could streamline processes for both funders and funded organisations.
However, this idea was met with mixed reactions, and several important concerns and reflections emerged:
Overall, while the idea of a shared due diligence approach made sense in theory, most funders had real reservations. A lot of them are already moving toward more relationship-based approaches, so a centralised system didn’t feel like a natural fit. There were also practical concerns—like how it would work with their existing systems, who would be responsible if something went wrong, and whether it would actually save them time. Some were also uneasy about formalising shared intelligence, especially if it could be misinterpreted or used in the wrong way. And for smaller funders, the idea just didn’t feel relevant to how they work. On top of that, with so many collaborations already happening locally, there’s a bit of fatigue around new initiatives that don’t always lead to action.
While the original concept of a shared due diligence system raised some concerns, the conversations also surfaced a number of constructive and promising ideas that could form the basis for a more collaborative and supportive approach.
One of the strongest themes was the idea of supporting organisations through the due diligence process, rather than trying to standardise it. Funders expressed interest in exploring ways to build capacity, offer constructive feedback, and help organisations understand what might be missing from their applications. This could include mapping an organisation’s journey and tailoring due diligence expectations accordingly. In that sense, the idea of a shared approach that saves time for both funders and organisations was also seen as worth exploring—especially if it could help spot missing information early or reduce duplication.
Another strong message that came through—particularly from community organisations—was the need to simplify the entire grant application process.
Due diligence is just one part of a much larger system that often demands significant time and resources.
There’s a clear opportunity here to explore single application forms and unified reporting, which could ease the pressure on smaller civil society organisations. Given the existing spirit of collaboration among local funders, this could be a practical and impactful next step. As mentioned before, funders recognised the need to make it easier for organisations—especially smaller or newer ones—to apply for grants.
Another idea that resonated was the concept of shared risk. While each funder has their own approach to risk, there was interest in exploring how risk could be shared more intentionally—as a way to build trust, rebalance power, and strengthen partnerships. For example, with some funders including Community Interest Companies (CICs) in funding strategies, they acknowledged that due diligence can be more complex. This opens up a broader question about how to adapt these processes to suit different types of organisations and the various stages they’re at in their development.
Several funders also saw value in sharing intelligence and references—not in a formalised or recorded way, but through more open channels of communication. This could help new funders get a better sense of an organisation’s track record, or flag areas that might need more support.
This could also create more opportunities for funders to talk to each other, particularly those working in the same boroughs with similar goals.
This project has come a long way since the original idea of a shared due diligence system. What started as a fairly technical solution has evolved into a much broader conversation about how we build trust, reduce barriers, and support organisations more meaningfully.
Through conversations with local funders, it’s become clear that while a one-size-fits-all system may not be the answer, there’s real potential to focus on the process itself—making it more collaborative, more transparent, and more supportive.
There’s an interest in finding ways for funders to share what they know, offer constructive feedback, and help organisations strengthen their due diligence over time.
At the same time, there’s also space to rethink the idea entirely. That could mean joining forces with existing collaborations or exploring how trust is already being built locally—and how that trust could be transferred into other spaces where funding decisions are made. This might help shift the focus away from risk and toward relationships, shared values, and collective knowledge.
Where we go next will depend on the appetite for collaboration, sharing risk and the willingness to experiment (London Funders recently delivered a learning programme on how funders can reconsider their relationship to risk which may be of interest to funders who are thinking about this). But there’s a shared interest in doing things differently—and that’s a strong foundation to build on.