The perfect storm for fraud is brewing at most nonprofits.
No nonprofit wants to believe its organization would fall victim to fraud. How could it, you’ve built an environment of trust, surrounded yourself with people who’re passionate about your mission, and have very strong internal controls as part of your policies and procedures.
The reality is nearly 10.1 percent of victim organizations were nonprofits that reported a median loss of $100,000; 18.7 percent were government agencies that reported a median loss of $109,000 as estimated by The Association of Certified Fraud Examiners.
The following combination of “events” could be contributing to the drastic aggravation of a situation at your nonprofit.
- Your team members are wearing too many hats.
- Your nonprofit experience high employee turnover.
- Training is a luxury.
- You have limited or ineffective controls in place.
- There are volunteers working at your nonprofit who are privy to confidential information.
- Your volunteer board has little-to-no financial oversight expertise.
What’s at stake if your nonprofit falls victim to fraud?
The obvious answer is hard-earned dollars. You and your team work tirelessly to raise funds for your mission-related programs, and the financial blow inflicted by a fraudster could be devastating. The impact of fraud can be far wider-reaching than just financial including:
- Harm to your reputation
- Crisis management
- Cost of investigation and litigation
- Deflated employee morale
How do you mitigate fraud?
Before a major storm hits, preparation is key. When it comes to fraud, having the right people and processes in place is your first line of defense – but it doesn’t stop there. A true fund accounting solution can help you detect and deter fraudulent activity that may otherwise slip under the radar. See first hand how MIP Fund Accounting™ technology can protect your organization.