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Protecting Your Non-Profit From Fraud

Non-profit organizations are established to help the community and often rely on funding resources such as donors, grants, and endowments. However, non-profits are often vulnerable to fraud risks and scams that threaten their financial stability and ultimately compromise their mission. As a non-profit director, manager, founder, or board, it is essential to have measures in place to safeguard the organization’s resources. Here are some critical steps non-profits should take to protect themselves from fraud risks from Forensic Brothers Investigative Services, the chosen provider for investigative accounting in Atlanta and the nation. 

1. Establish Strong Internal Controls

investigative-accounting-atlanta-charityA key step that non-profits should take to reduce fraud risk is establishing strong internal controls. These controls should involve policies that detail how funds are raised, receipts are issued, and how disbursements are handled. This will help to minimize the possibility of theft or misappropriation by staff, volunteers, or board members. Also, define specific job responsibilities, and assign financial roles to different people to avoid overlap of tasks that could create opportunities for fraud.

2. Develop Clear Financial Policies

Creating transparent financial policies is a crucial step toward minimizing fraud risks. Identify the various financial processes within your non-profit, including expense reporting, accounts payable, accounts receivable, and budgeting. It’s also vital that non-profit organizations ensure that board members, staff, and volunteers are trained on processes such as check signing or bank reconciliation. The clarity in financial policies helps prevent fraudulent activities that may otherwise go unchecked.

3. Conduct Regular Audits

Regular audits are vital in monitoring financial transactions and ensuring that the non-profit’s financial records are accurate and reconciled. Audits can reveal financial records discrepancies and highlight potential fraudulent activities. Although external audits may be expensive for some non-profits, organizations can have an internal audit or employ a specialist to review their financial records.

4. Invest in Fraud Detection Tools

investigative-accounting-atlanta-itInvest in fraud detection tools, such as software systems. While investing in such systems may seem costly in the short term, these tools help the organization’s long-term financial health. These tools help identify any unusual financial behavior as they arise before they escalate into more significant problems.

5. Train Staff and Volunteers

Fraud can often be unintentional without the perpetrator realizing they are committing an offense. Therefore, all non-profit staff, volunteers, and Board members must be trained to detect and prevent fraudulent behavior. This training should include instruction on reporting suspected fraud, the consequences of fraudulent behavior, and the importance of accurate record-keeping.

6. Implement Whistleblower Protections

Encouraging and protecting whistleblowers is essential in preventing and detecting fraud. Non-profit organizations should implement policies encouraging employees, volunteers, and others who suspect fraud to report it without fear of retaliation. Such policies make it easier for organizations to detect and address fraud promptly, preventing further damage.

7. Perform Background Checks on Employees and Volunteers

Performing background checks on employees and volunteers is another crucial step that non-profits should take to avoid fraud. Organizations should verify qualifications, employment history, and conduct criminal background checks before employing staff or taking on volunteers. Having these measures in place as early as possible can prevent fraudulent activities before it arises.

8. Get Professional Help

Hiring professionals, such as Certified Public Accountants or financial and legal advisers, can help protect non-profit organizations from fraud. These professionals can advise on internal controls while helping develop policies and procedures. Additionally, investigative accounting professionals (in Atlanta and the nation) serve as an independent check on the organization’s finances and activities, ensuring that they remain transparent and accountable.

Non-profits face many fraud risk factors, and protecting the organization’s financial and operational integrity is critical. By implementing the steps highlighted in this blog, non-profits can reduce the threat of fraudulent activities while safeguarding the resources needed to fulfill their missions.

Forensic Brothers Investigative Services (FBIS), The Expert Investigative Accounting Team for Atlanta, The South, and The Nation


At Forensic Brothers Investigative Services, we understand the complex financial requirements that non-profit organizations must adhere to.  We also know that with the many different aspects of daily operations, non-profits can be at greater risk of fraud and theft. Just one instance of fraud can place your non-profit organization in economic jeopardy and damage your reputation, endangering the very existence of your mission.

FBIS has a heart for non-profits and their dedication to the communities they serve. We are one of the very few investigative and accounting agencies that are trained, equipped, and have the creditability to serve non-profits with both preventative services to limit fraud exposure and investigative services for fraud theft. 

Working with your board, our team of former FBI agents and CPAs have the ability to investigate fraud with the greatest responsibility, diligence, and adherence to confidentiality. It is our mission to provide you with the proof and documentation needed to protect your organization’s reputation and financial standing.

Whether you are a non-profit looking to prevent fraud from happening or suspect that your organization may have become a victim of fraud, FBIS is here to address your needs.

Contact Us Now or Call Us at +1-678-915-1802.

The Mauldin Group


The Mauldin Group