The future of philanthropic due diligence: New standards and technology in 2025

Philanthropic due diligence has evolved rapidly in recent years, with increasingly formalised and centralised due diligence processes, and the adoption of AI reshaping the landscape. Join Rhodri Davies of Why Philanthropy Matters and Jess Denny from Xapien as they discuss the shifting thresholds for donor vetting, the role of technology in balancing systemisation with nuanced gift acceptance decisions, and the emerging challenges posed by new asset types and the globalisation of philanthropy.

The discussion starts with the increasing scrutiny of philanthropy and wealth, around donor vetting and gift acceptance. Rhodri highlights a growing demand for transparency around how wealth is made and how it is used in philanthropy. This pressure comes from various stakeholders, including supporters, the public, and staff, who are all eager to know more about the sources of philanthropic funds. As more information becomes available, people feel empowered to question the legitimacy and ethics of accepting donations from certain sources. However, Rhodri also notes the pushback against this scrutiny, with some arguing that organisations need strong justification for rejecting donations. Legal guidelines, particularly in the UK, set a high benchmark for turning down gifts, meaning organisations must be able to justify their decisions effectively.

Jess adds that tools are evolving to make due diligence more efficient, including lowering the thresholds for when due diligence is required (e.g., gifts over £10,000) and centralising the function to streamline processes. Technology, such as AI, enables organisations to conduct due diligence on a wider range of donors and allows for more transparency, even for smaller donations. Jess also mentions how this trend parallels other sectors, like financial services, where automation has made services more accessible to a broader audience.

Rhodri agrees, highlighting how automation can help lower thresholds and standardise decision-making processes. However, he also stresses the importance of not automating decisions entirely, as due diligence often involves nuanced judgment calls, especially in gray areas where there is no clear right or wrong. He suggests that organisations should have a principles-based approach, allowing for flexibility while ensuring decisions align with the organization’s values. The key challenge is finding the right balance between centralised consistency and case-by-case decision-making.