The Role of Nonprofit Accounting Software in Protecting Your Mission from Fraud

The Role of Nonprofit Accounting Software in Protecting Your Mission from Fraud

Each time a major nonprofit fraud makes headlines, nonprofit finance leaders are reminded once again of the critical importance of transparency and internal controls. Most nonprofit frauds are not the result of operating sham charities, but rather they are frauds perpetrated against great organizations from within by a few dishonest employees. 

The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5% of annual revenues to fraud. According to Giving USA, the not-for-profit sector raised nearly $428 billion dollars in contributions in 2018, so approximately $21 billion dollars was likely lost to nonprofit frauds. 

Nonprofit management consultant Marion Lee, of Lee + Associates, eloquently summarized how fraud at a nonprofit reaches beyond the finances to threaten organizational mission: 

“When people steal from a nonprofit more than money is lost: services to children and fragile populations are diminished or cut altogether; quality-of-life programs for everyone in the community are affected; and the people closest to home–the donors, staff, volunteers, and volunteer board–will suffer loss of trust and jobs, fear, insinuation and rumor, investigation, and a level of stress that is for some, unbearable.” 

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Written By Joan Benson Director, Non-Profit Industry  


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