In my last post, I introduced a heartbreaking article in The Washington Post, "Inside the hidden world of thefts, scams, and phantom purchases at the nation's nonprofits
According to The Post, more than 1,000 nonprofits that filed 990 tax forms between 2008 and 2012 checked the box indicating they had discovered a "significant diversion” of assets attributed to theft, investment fraud, embezzlement and other unauthorized use of funds. Charities are required to report diversions in excess of $250,000 or five percent of the nonprofit's annual total assets. Even though these organizations are directed to explain the losses, they regularly omitted information either because they were not yet aware of the diversions or did not want to report it.
A blatant lack of oversight and spotty checks and balances are the common themes
among these organizations that discovered enormous losses in revenue. I discussed strategies to overcome these frequent pitfalls by instituting internal practices
in my last post.
This week, I want to take a look at additional methods for nonprofit accountability through deeper partnerships between funders and grantees that may help to mitigate...
Read more at the Finance Fundamentals Newsletter
by Erica McGeachy Crenshaw, CEO of Execute Now!