A friend asks you to sponsor her for a marathon she is running to raise money for a national charity.

You’ve been asked to serve on the board of a local nonprofit, one that you have been following on your Facebook feed.

You serve on a nonprofit board and the former board chair of a different organization was just nominated to serve on your board.

You’re the executive director of a community organization and just received a large check from a very wealthy couple who has just moved into town.

What’s your next step? Write the check? Sign up for the board? Vote for the guy? Celebrate your surprise treasure? If it’s anything but do your homework before you act, you stand to lose a lot.

It may seem silly to research every organization that asks you for small sums of money. If you have a friend who is raising money on behalf of that organization, wouldn’t she have conducted her due diligence before aligning herself with that organization’s brand among her closest friends and on social media? If you have been following a nonprofit on Facebook, wouldn’t you have seen a comment if there was something wrong with the organization? If someone served as a board chair of another organization, wouldn’t that organization have performed a background check on that individual or checked references with the previous organization before entrusting him with a leadership position? And doesn’t someone who is new in town have a fresh slate? In most instances, you are probably safe if you do not make the extra effort to thoroughly research any organization before you write a check or volunteer. But it only takes one unfortunate situation to make a searing impact.

In a former life, I was a volunteer leader of an organization where we had a difficult time recruiting board members. This organization was in a difficult financial situation and many people in the community were aware of the problem. Additionally, many people knew that serving on this board required a lot of work: it was easily a 20-hour per week assignment. So, when the former board chair of a prominent organization approached us about the possibility of serving on our board, we quickly jumped at the opportunity. The organization from which he was “terming off” was financially stable and enjoyed a positive reputation in our community. Further, everyone seemed to know this former board chair: he was a fixture at every community event and many of our board members knew him personally. We were thrilled that he wanted to share his surplus time with us, helping our organization become more stable. We extended an invitation for him to join the board. Several months later, I had a meeting with a casual friend who was the chief executive officer of the organization that the former board chair had served. Our conversation went something like this:

“I heard that XX joined your board.”

“Yes, we are so excited. It looks like he did a great job with your organization. Wasn’t he the board chair when you celebrated your milestone gala and raised all that money?”

“He was – but he didn’t lift a finger. He just showed up for the photos. It was the staff team that raised all the money, along with some of the other board members.”

“Oh.”

Our organization swooned over public reports and thought we knew the former board chair well. How were we to know that the nonprofit’s staff were propping him up for the sake of the organization’s reputation? That was not public information – but I bet that we could have gotten some useful insights if we picked up the phone and spoken with the chief executive officer before we invited the guy to serve. That insight wasn’t useful after he joined the board. And now our organization was in a deeper dilemma – we were already stretched thin. Could we count on the former board chair to carry his load?

Unfortunately, my story isn’t unique. How many of us have made donations to organizations, only to find out a few years later that someone embezzled donations to enrich themselves personally? Or agreed to a volunteer commitment, only to find out that it wasn’t like what we had imagined it to be? Or celebrated a generous donation from strangers, only to find out that they moved from their previous communities under some shady circumstances?

There is no reason to feel awful about not doing your nonprofit homework in the past – just resolve to do it in the future. Here is a list of resources I check before I engage with any new entity:

1. Their website. While it need not look expensive, does it look like it’s been updated since Y2K? Does it have a list of staff, board members, and contact information? Do they post their annual reports and their Form 990 tax filings? You can also look at archived versions of the website via the Wayback Machine website, which may help you identify a previous slate of board members who served with the individual.

2. Their Charity Navigator rating. Using a four-star rating system, this charity assessment organization rates organizations on their impact and measurement, accountability and finance, culture and community, and leadership and adaptability. It drills down into detail, such as whether the nonprofit you are researching posts their tax forms on their website, publicly shares its whistleblower policy, and lists its liabilities to assets ratio.

3. Their GuideStar profile. You need not have to subscribe to GuideStar – the free version is entirely adequate for basic due diligence and includes information on their mission, financial position, and board members.

4. A general Google search. After you search the name of the organization, click on the “News” tab to see what pops up. Was anyone recently fired for questionable activity? Apologies to anyone named “John Smith,” but one trick is to search using terms like “’John Smith’ and ‘fraud’” or “’John Smith’ and ‘arrest’” or  “’John Smith’ and ‘bankruptcy’” – it may not be scientific, but it can help you identify allegations of financial impropriety that may have been buried by a paid effort to lower the profile of negative information. Information about criminal prosecutions, civil suits, and bankruptcies is all publicly available if one bothers to search. You certainly don’t want to invite someone into a leadership role if they have been irresponsible with other people’s money in the past or have other issues that flag a serious risk.

5. A staff or board member of the organization. While you can certainly find a lot of information about an organization online, some of the information you find may lack context. For example, if you discover that the nonprofit you are researching had a large deficit in one year, you may want to speak to a representative about why. That deficit may not be the result of financial mismanagement – it may be that the board elected to make an organizational investment to ensure the organization’s long-term stability.

You may think you know an organization or a person well. However, there may be some things you need to know more before you enter into a deeper relationship with them. Doing your nonprofit homework will help you minimize the risk of making a bad decision. And if you are a nonprofit board member, you have a fiduciary responsibility to the organization, its donors, and the US government.