As we enter another year, it’s an exciting time for nonprofits. However, with substantially more donations coming in this time of year, you need to be on your game when it comes to money management.Beware of these money leaks:
Theft and Fraud. Theft can be perpetrated by anyone including vendors and contractors. A dishonest party could impersonate your nonprofit to host a fundraising event, and then pocket the profits and run.
- Cybercrime. Internet and phishing scams are getting more sophisticated every day. Even Portland Public Schools almost transferred $2.9 million to a scammer pretending to be one of their trusted building contractors.
- Regulatory compliance. The IRS has strict rules for nonprofits to maintain their tax-exempt status. Don’t let a slip-up cost you fines or loss of your tax exemption.
- D&O liability. Your board’s directors and officers make the business decisions, including managing funds. A liability claim against one of them for misallocation of funds, wrongful termination, discrimination, harassment, or another event could be costly.
- Rogue volunteers. If one of your volunteers steals or causes injury or damage, your organization could get hit with a negligence claim, and that can be costly to defend and settle.