Is Your Nonprofit At Risk?

In 191 nonprofit cases studied, the average loss due to fraud was $639,000 (Association of Certified Fraud Examiners’ 2020 Report to the Nations.)  Because nonprofits have fewer resources and less oversight, they are more vulnerable to corruption, billing schemes, expense reimbursement fraud, skimming, etc.  The perpetrators of fraud in almost 40% of these cases were owners/executives.

While nonprofit organizations generally suffer the smallest dollar losses overall, the losses can be crippling because they operate on a much smaller scale. For example, a corporation with a net worth of $1,000,000 dollars that loses $10,000 to fraud (1%) is likely not going to go bankrupt, but a nonprofit worth $20,000 with that same $10k loss (50%) may not be able to recover and might potentially have to close up shop.

2020 ACFE Report to the Nations
2020 ACFE Report to the Nations

Does your nonprofit organization have one person to pick up the mail, another to log donations received, a third to make deposits? Separation of duties is just one way to ensure proper oversight and reduce risk of loss. Does cash get deposited as cash or converted to check? How long before the money gets deposited? Does your organization use company email accounts to communicate? Is there a central repository for files (physical and/or digital)? Answers to these questions can reveal areas that need to be tightened up to prevent fraud.

Contact Lisa at Dragon Investigation Group for a free consultation. As the senior board member of a nonprofit, she knows how this type of organization works and can help expose the areas most at risk for financial leakage.

Call us today for a free consultation.
281-670-8334

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