As we enter another holiday giving season, it’s an exciting time for nonprofits. With about one third of all annual charitable giving happening between September and December, it’s also a crucial time for a nonprofit’s survival.
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.