How To Prevent Theft In Nonprofits

Headlines about nonprofit fraud trigger two questions:

 How did that happen? 

And

Could it happen to me?

The approach most people use to prevent theft is hiring people they trust.   When I ask nonprofit leaders about the risks in their organizations, it’s common for me to hear “but I trust them, they wouldn’t steal.” 

Trust is important in ALL relationships. 

We should hire people that we trust. But trust is not enough to protect the organization's assets. It must be supported by more.  I love the way Ronald Reagan said it, “trust, but verify.”

Obviously, you cannot verify every transaction in an organization.  But you can put in place processes that protects and oversees the financial activities.  This is called the internal controls.  It looks different in every nonprofit based on their size, staffing and financial complexities.   

Internal control environments accomplish more than just safeguarding the assets. They also create efficient and accurate financial reporting and help minimize errors within your financial operations.

Not sure where to start?  Jump on my website, www.terisaclark.com and take my Free Fraud Factors Assessment today.  This 15 minute assessment will give you a list of things to strengthen today.  Don’t keep asking “could it happen to me?”  Assume it could and get started today creating your internal control environment.