Is Due Dillegence Passporting Giving Funders Permission to Opt-out of Risk-sharing?
Due diligence passporting is having a moment. Again.
I understand why. The compliance burden on local and national organisations in the humanitarian and development sectors is genuinely crushing. When a single organisation completes twelve separate due diligence assessments in one year, each with its own templates, timelines, and institutional logic, something is clearly broken, and the impulse to fix it is right.
However, the proposed mechanism deserves far more scrutiny than it is currently receiving.
What passporting actually does
Passporting, in its current form, is almost entirely a conversation between implementing partners and intermediaries. The organisations that hold actual power in these relationships, the funders, are mostly absent from the room. And the due diligence requirements being passported around were designed by and for those very funders in the first place.
So instead of addressing the real cause, we are addressing the side effect. We are building increasingly sophisticated mechanisms to redistribute a burden that was never proportionate or appropriate to begin with.
Passporting is an efficiency intervention applied to an equity problem. It moves compliance around the system faster. It does not change who bears the risk.
The root cause is not administrative
The reason local and grassroots partners face disproportionate due diligence requirements is not, at its core, an administrative problem. It is a power problem.
Funders transfer risk to implementing partners through inflexible budgets, rigid output frameworks, punitive grant agreement language, and compliance frameworks originally designed for large international NGOs and then imposed wholesale on community-level organisations with a fraction of the back-office capacity. The mismatch is structural. It reflects assumptions (often unexamined) about where risk originates, who is responsible for managing it, and who should bear the cost when things go wrong.
Passporting makes that burden easier to move around the system. It does not question whether the burden should exist at all. There is a meaningful difference between those two things. Efficiency gains within an inequitable structure do not make the structure equitable.
The alternative: risk sharing
The conversation we should be having is about risk sharing.
Risk sharing means funders and implementing partners jointly identifying the actual threats to a shared objective, agreeing who is best placed to manage each element, resourcing it fairly, and building in honest, non-punitive feedback loops. It treats risk as a property of the relationship and the project to be jointly managed, rather than transferred from one party to the other.
This means looking honestly at the funder's own contribution to risk. Inflexible budgets that cannot respond to changing field conditions are a risk. Reporting requirements that consume staff time that could be better spent on delivery are a risk. Funding agreements that lack a mechanism for course correction when circumstances change are a risk. These are not failings of the implementing partner. Rather, they are design choices made upstream by the funder, with downstream consequences that the partner is currently expected to absorb alone.
Risk sharing asks funders to be in the room, not as auditors of partner capacity, but as co-owners of the objectives they have chosen to fund. That is a different posture.
It requires examining practices that many funders have not historically examined, because the system was designed to direct scrutiny elsewhere.
Why this is harder and why it matters
I will not pretend that risk sharing is simple. It requires funders to accept that their risk appetite and their partners' operating reality are often significantly misaligned. It requires investment in the relationship, in proportionate due diligence tools, and in contingency mechanisms that allow programmes to adapt without triggering punitive consequences. It also requires a willingness to be wrong and to say so.
That is uncomfortable. It is also the only intervention that addresses the root cause rather than the symptom.
Passporting may be a useful short-term relief valve. Reducing duplicative paperwork has real value for overstretched organisations, and I do not want to dismiss that. But if passporting becomes the destination and if the sector declares the due diligence problem solved because sharing credentials is now slightly more efficient, we will have spent enormous energy making an inequitable system run more smoothly and called it progress.
