Nonprofit

Thinking of Starting a Volunteer Program? Here Are 5 Things To Consider
Couple Working in Homeless Shelter
  1. Know what role your volunteers will have.    Even if your organization has numerous tasks that it just cannot get to, planning is essential to an effective volunteer program. As such, the first step is to think about what suitable tasks and responsibilities are needed that match the organization’s strategic goals.  In other words, is the work suitable for a volunteer and will it advance the organization’s strategic goals.
  2. Know compliance requirements and regulations applicable to your industry and be prepared to share your organization’s written policies and procedures with your volunteers.     If required by law or advised by legal counsel, have volunteers sign written acknowledgements.  Federal grants now require that nonprofit organizations protect personally identifiable information.  Check with a legal professional to find out:
    • If volunteers should adhere to your organization’s confidentiality agreements
    • Whether volunteers should receive training on applicable laws such as HIPPA or other privacy laws
    • Whether volunteers are covered by your organization’s insurance in the event of a claim of liability
    • Does the work require the volunteer to undergo a background check or health assessment
    • Answers to other compliance requirements under either state and federal laws or funding requirements that may impact the volunteer program
  1. Identify staff members with sufficient time to oversee the volunteer program. Don’t assume that HR or a program manager would be the obvious choice for oversight of any portion of the volunteer program.  A proper volunteer program will require time and effort to run properly. 
  2. Develop a framework for recruiting, training, promotion, recognition and retention.    It’s not enough to just seek out helpers and put them to work. An effective volunteer program requires cultivating if you want to retain volunteers.
  3. Select the best channels for recruiting potential volunteers.    The organization continues to brand itself even during the recruitment process.  Therefore, the organization should solicit volunteers that are consistent with the organization’s brand and mission.  Finding volunteers who match the mission and objectives is equally important.  Finally, the type of work involved, general timeframe for completion and any indirect costs to the organization are important considerations.

The Grantee Selection Process

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In one of our previous posts, we discussed the issue of fraud and the fact that many large nonprofit organizations are victimized each year by fraudulent acts.  We wish to continue this discussion but from a slightly different perspective.  During research, I came across a statement from Michael Ballin, President of Edna McConnell Clark Foundation.  He stated that their foundation spends “100-200 hours on site with each potential grantee organization, examining the organization’s financial health, leadership and management, and measurement of outcomes.”  He went on to state that investing in the best nonprofits helps strengthen the entire nonprofit filed.  The selection process of the Edna McConnell Clark Foundation suggests that due diligence and accountability can have a positive impact on nonprofit management.  Careful scrutiny during grantee selection has the potential of raising organizational standards and the control environment within nonprofit organizations. This can lead to improved policies, procedures and internal controls that protect against fraud and asset losses.  Likewise, nonprofit organizations who wish to shine during a grant selection process should be positioned to demonstrate control activities used to promote the financial health of the organization.  For example, a nonprofit organization can demonstrate systems to protect patient privacy, prevent cybercrime, or protect system data.  Nonprofit organizations should contact a nonprofit specialist if it desires to improve management practices in this area.  Likewise, private foundations who wish to revamp their grant selection process should contact a nonprofit consultant.

Check Fraud

Our firm recently consulted on issues related to external fraud and so we believe it is befitting to address this issue here.  Most of this article will be to educate persons on this issue than to tell a story.  You will find in reading this blog that educating the public is also one of our goals in posting here.  Our hope is that in reading this information, you become more informed of this issue.  The Washington Post recently conducted an investigation where they found that over 1000 nonprofit organizations have had a “significant diversion” of assets since 2008 mostly attributed to theft or embezzlement.

The losses suffered by some nonprofit organizations sometimes amounted to tens of millions of dollars as reported on the organization’s IRS Form 990 return.  For a struggling nonprofit organization, the loss of even thousands of dollars may impair the nonprofit organization from achieving its mission.  Therefore, proper internal controls are essential for organizations of all sizes.

Embezzlement has been defined as the fraudulent appropriation of money or property lawfully in one’s possession according to Dr. Larry Crumbley in his book Forensic Investigative Accounting.  One way a fraudster may embezzle funds is by check tampering.  In fact, checks are known to be one of the most frequent fraud schemes with over 500 million checks forged each year in the United States.  Many frauds are perpetrated by an employee who gains access to a check and goes on to prepare computer copies and cash them under someone else’s name.  Thus, one way a nonprofit can protect it is by incorporating a control concerning checks. Checks can be imprinted with holographic images, watermarks, and inks that cannot be erased or copy or other types of security inks as one control to deter check fraud.

Organizations that wish to do more to identify operations risks should have a risk assessment conducted to expose and strengthen weaknesses within the organization.  Image