Customer success story
4 hours of due diligence in under 10 minutes.
“Xapien's rapid insights enable us to review all our high-value prospects before we move to a gift agreement, without slowing down the process”
Craig Leonard, University of Michigan
Background
In 2018, the University of Michigan noticed troubling behaviour from donors, which prompted the institution to build a new due diligence process. The University set a $5 million threshold for due diligence, as donations of that size are often tied to major recognition events. To prevent bias, existing major donors making a new gift also undergo renewed due diligence. The prospect research team led the process, collaborating closely with the legal team to ensure they weren’t solely responsible for assessing risks. They could rely on the legal team to clarify real concerns versus standard business practices.
Before Xapien
The prospect research team struggled to balance nuanced, thorough due diligence with efficiency. They handled the process manually, which made it overly complex.
The team often felt uncertain about what constituted a "risk" for the University and how deep their investigations should go. They relied heavily on the legal team to untangle their due diligence findings. This uncertainty led them to overcompensate by gathering too much information from various websites and online sources—a lot of work for a research team of two.
As a result, due diligence reports took anywhere from 4 hours to 2 days to complete. The team also faced pressure to finish the reports before the institution formally requested a gift, as the Vice President needed to review the findings before signing the agreement.
After Xapien
The prospect research team now uses Xapien to run comprehensive due diligence reports on gifts of $5 million and above. What once took 4 or even 16 hours to search and summarise due diligence findings is now done in less than 10 minutes. The team starts with Xapien Insights since it summarises information in clear and concise sections. Where risks are flagged, the team will drill deeper into the web and media section to get a more rounded understanding.
Xapien Insights is the section of Xapien reports that uses generative AI to summarise the web and media content that Xapien has gathered, cleansed, and checked for relevancy. It gives a clear and concise summary of the key points about a subject, taken from what could otherwise be an overwhelming amount of data.
Web and Media is where open-source news articles found by Xapien are displayed. It allows researchers to delve deeper into flagged risks by filtering content by risk type (financial crime, convictions, ESG, sanctions, etc.). This gives researchers a more contextual and informed understanding about the prospect.
The impact
Automating manual research has freed the team to focus on interpreting red flags and preparing briefings for the Vice-President to review. Rather than serving as information gatherers, they are transformed into true analysts, enabling them to apply meaningful analysis to their briefings. Xapien’s AI handles the routine work, so the prospect research team can provide more human-driven value to the organisation. The Assistant Director of Development Research is now more confident in the team’s due diligence output, as the Vice-President relies on these reports to make well-informed gift decisions.
Where Xapien fits in Michigan's due diligence process
As soon as the prospect research team is alerted of a new potential donor, they run them through Xapien. They do this before the fundraising team begins deeper conversations, which could result in wasted fundraiser time if an issue comes back in the initial report.
If the Xapien report doesn’t flag any risks, it will be considered clean, and a summary will be submitted to the campaign director and the Vice President for Development. They will review it and approve the gift. However, if there are any risks or red flags, the legal team will do a proactive deep dive into the flagged issues. They may bring in a clerk to investigate further and ascertain the underlying concerns, followed by a risk assessment to determine whether the situation falls within the normal course of business.
If it’s outside the normal course of business and raises concerns, the team will send that summary to the Vice President and the campaign director, who will collaborate with the executive officers. This review is also a requirement of their naming committee. If there is any naming associated with the gift, the committee will evaluate whether it is clean or presents a risk. If the committee identifies a risk, they will weigh in, and the decision will proceed through the institutional decision-making process using a matrix.
If the risk is deemed too great, the Vice President will communicate with the donor about why they can’t accept the gift. Conversely, if it’s found that the risk is within the normal course of business, they'll return to the typical summary approval process. Having the ability to triage prospects upfront based on a Xapien report reduces unnecessary back-and-forth between teams when no risk is present, ensuring that prospects aren’t left waiting without reason.
Xapien streamlines due diligence
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