In nonprofits and associations not only can technology play a huge role in effectiveness, efficiency and optimizing efforts towards the overall end goal or mission, but it can also drive the chances of fraud down.
According to the 2016 Report to the Nations on Occupational Fraud and Abuse, produced by the Association of Certified Fraud Examiners, the estimated loss for a typical organization is 5% of revenue per year. And nonprofits are no exception. The average median loss per nonprofit fraud case was reported at $82,000.
What could your nonprofit or association do with an additional $82,000? Or more? We’re sure the answer is ‘a lot’.
The Good News
The good news is that technology can help reduce and prevent fraud that would otherwise slide under the radar within organizations. Here are a few places to start if your nonprofit or association is looking to put up some barriers to fraud.
a. What You Can Do Right Now – Conduct a quick audit on the process your donations or payments take as soon as they are made. How many times does the money or information change hands? The more times it changes hands, the better the chances of fraud.
2. Permissions - Another great security benefit of implementing technology throughout your nonprofit is the ability to set permissions with checks and balances. Only those with specific permissions can access certain information, but others can be read-only to have visibility and hold others accountable.
sensitive information and what they are able to do with that
information. If someone has too much access without others
having visibility to it, it may be a good idea to do a financial audit
3. Standardization & Integration - The more you can standardize the systems
that are used within your organization as well as integrate your systems so that each department is able to see the information at different points in the process, the better off you are. Each department then starts acting as a natural checks and balances process. Red flags appear if information doesn't sync or align with what another department entered or recorded
your nonprofit are utilizing your existing systems. Are there some
that are unnecessary? Can some be combined? Is there a set of
systems that need to communicate to each other? This can give
you a good idea of where to being.
Fraud isn’t 100% preventable and it does happen. The best you can do is prepare yourself against it, know where your gaps are and make prioritizing security a part of your internal culture.
Billhighway provides software that automates payments for chapter-based associations to streamline and optimize dues and member payment management, including seamlessly splitting of individual payments between chapters and parent organizations. Billhighway became a BluePay company in 2016.
This blog post was written by Charlotte Muylaert from Billhighway and Jennifer Seebock from BluePay.