Due diligence is the check a donor carries out on an organisation before awarding funds: whether it legally exists, whether it is financially sound and whether it has management systems in place. In EU programmes this happens after the project is selected, during grant preparation.
A donor does not give money to an idea but to a legal entity – and checks beforehand whether that entity can absorb the funds and account for them.
What is checked
Legal existence – statutes, registration, the signatory's authority. In EU programmes this is part of the organisation validation tied to the PIC.
Financial capacity – the ability to carry out the project with available resources. The indicators are liquidity, financial autonomy, solvency and profitability, plus dependency on EU funding.
Operational capacity – whether the organisation has the staff and experience for what it proposes.
When it happens
Crucial for planning: in EU programmes the check comes after the project is selected, at grant preparation, not at submission. So you can apply without waiting for it.
Financial capacity is not checked for everyone: normally for the coordinator and above a threshold of requested funding. Public bodies and international organisations are exempt.
What a poor result means
Not necessarily rejection. Consequences range from a request for more information to enhanced financial liability, split pre-financing, guarantees, replacement of a participant – and only in the last resort rejection.
An assessment is valid for 18 months after the closing date of the assessed accounting period, so it need not be repeated for every project.
Updated 27.07.2026 · Reviewed by: GetGrant editorial team
