Be Vigilant – Hold on to your Holdings
Most nonprofit organizations collect donations year-round, so continuous vigilance in protecting your donors’ goodwill and generosity must remain top priority. Unfortunately, with the consistent influx of monetary donations comes the perpetual risk of theft.
Nonprofits, along with all other companies, must follow good business practices throughout the year. Never let your own sense of goodwill cause you to relax your policies and put your organization at risk for embezzlement.
Be aware of some simple risk-management steps to ensure your donors’ money remains protected:
- Appoint two separate, unrelated people to split these tasks as a constant check: receiving, depositing, recording, and reconciling the receipts for all donations.
- Deposit funds in the bank as soon as possible, ideally the same day they’re collected.
- If you don’t use a remote deposit system or if you receive cash gifts, two people should be present when transporting funds to the bank. Even if you do make deposits from your office, ensure a second person observes.
- If you’re unable to make a daily deposit, store the money in a safe or locked cabinet within a locked room. Your storage location should be kept confidential from everyone who doesn’t handle the money.
- For expenditures over a predetermined amount, require two signatories on every check and two different signatories on every authorization or payment.
- Perform an annual fixed asset inventory to ensure no equipment or goods are missing.
To ensure these control measures work, conduct audits of your financial systems and practices at least annually and identify areas that could be improved. Make sure to provide a written code of ethics, including effective reporting procedures, and specific consequences for violations of your policies.
While there may be instances where a determined thief manages to violate the sanctity of your church, synagogue, mosque, or community nonprofit, these steps will at least serve as a deterrent in preventing embezzlement and other types of fraud.
We commend our nonprofit community for playing a crucial role in society by serving so many of those in need and appreciate all you do to make our lives and communities better. Thank you for making a real difference.
For assistance and guidance, the committed professionals at Online Stewardship Accounting and Consulting are available to help. Contact us at Lynn@OnlineStewardship.com or 904-398-4747.
