Fraud – How to Protect your Nonprofit
When it comes to fraud, the worst position a nonprofit can take is believing “it can’t happen to us.” It can.
The fact that regular audits occur, is not in itself, sufficient fraud prevention.
As the article states, “You have worked too hard to raise funds to lose them to criminals. Money isn’t the only thing you have to lose – fraud scandals damage the reputation of the organization and make donors and other funders think twice about entrusting you with gifts and grants.”
Fraud prevention is something that Finance Directors, Executive Directors, and the Board should be dedicated. Fraud only exists where there is opportunity. So how do you limit the opportunities available to the potential trust violator within your organization? What are the characteristics of a trust violator?
This article Nonprofits Take Measure Against Fraud – It’s More Common Than You Think gives a good description, provides a way to set up procedures to thwart fraud, and includes a PBS News Hour video covering the Washington Post’s report on fraud and embezzlement at nonprofits.