NONPROFIT STAFF . . . 5 EASY TIPS TO STAY OUT OF PRISON
Ok so the title of this entry is a little tongue in cheek, but at the same time, we could not be any more serious. Over the past several days I have noticed several articles about nonprofit staff who have stolen large amounts of money from their organization. I'm talking tens of thousands of dollars. A few were even in the SIX digits!!!! My goodness.
Now I know what you are thinking . . . this would NEVER happen to me. Chances are that's what these folks who went to prison said as well. I want to give a few tips on how you can tighten up your ship financially. Why? For two main reasons: 1) It lessens the chance of you or your staff falling into temptation 2) It gives an extra sense of transparency so you look good to the public.
TIP #1 - Get dual signatures on ALL checks. Some nonprofits will only have dual signatures for amounts over $XXXX, while others find it a pain to track down a board member for a second signature. Well, let's be honest, it is a pain to track down one of your board members to sign a check. However the safety net for you is the question that comes from the mouth of every board member who does so . . . "What am I signing", which should be music to your ears.
TIP #2 - Schedule you check writing. Make a policy that you are going to only make checks every other Friday, or whatever schedule you want to come up with. Sure, the occasional check might have to be written so a bill does not become late, but for the most part, this practice helps with record keeping, while other staff and board members may question why a check might have been written on a random Tuesday or Thursday.
TIP #3 - Look over your check disbursement list. Do you have a finance committee or does your board look over your finances? It does not really matter which. What does matter is that with the committee or board, all the members take a quick look at the list, and ask any questions they might have. As with Tip #2, this could make you feel defensive or feel treated like a kid . . . but always remember that transparency is your friend.
TIP #4 - Keep eye on the credit card statements. Since you are going to have the board, or finance committee, look over your check disbursement list, you might as well have them look over the credit card statement as well. This practice will help keep staff in check, squashes temptation, AND gives further transparency.
TIP #5- Establish spending policies to reduce those "grey area" purchases. Everyone knows the difference between a right and a wrong purchase. It's those grey area purchases for personal gain, that can lead to temptation. How do you know what a grey area purchase is? My general, and VERY unofficial rule, is if it takes longer than 2 sentences for me to justify the purchase to someone, then it's not worth it to me. The funny thing about grey area purchases, is that price does not matter. It could be a $5 item or it can be a $50,000 item. For example, as long as you are using it for work, no one will question why you spent $1,000 for a laptop or tablet. However someone might ask a question if you bought a cheap $150 grill for your house, so that you can host staff parties at your house ONCE a year. What about buying a 75" 4K TV for your basement because you hold staff trainings at your house? So get some policies in places so that you and your board are on the same page on what you are allowed to spend, how you are allowed to spend it, and how you are even allowed to use purchased items.
There is no question that putting these tips in place takes extra time and effort on everyone's part. However what we can promise you is that by putting these tips in place, you greatly reduce your organization's chances of potential theft. The worst part is, the longer someone is at an organization, the more the trust level goes up, and thus the guard goes down.
You might be doing 1 or 2 of these tips already but perhaps consider doing all 5. I have been personally told by multiple accounting firms during audits, that they appreciate us going out of our way to do processes that most don't. Remember, transparency is your friend. Well, that, and you don't want to go to prison.
To learn more about feasibility studies, planned giving studies, need assessment studies, and capital campaigns, visit us at www.midweststudiesgroups.com.