Has the Sector Learned Nothing about the Cover-Up Being Worse Than the Crime?
A new study puts an estimated price tag on what theft by nonprofit employees costs their organizations each year.
Forty billion dollars. That’s billion, with a "B."
From yesterday’s New York Times:
Almost 95 percent of the reported frauds entailed loss of cash, and a majority of those involved false or inflated invoices, billing for expenses that were never incurred and check tampering.
“I gave a talk to a group of nonprofit executives a few weeks ago, and every single one of them had a fraud story to tell,” said one of the report’s authors, Janet S. Greenlee, an associate professor of accounting at the University of Dayton. “This has been going on for years, but there’s a feeling that it shouldn’t be discussed,” because of the effect it might have on donations.
Professor Greenlee — joined in the report by Mary Fischer of the University of Texas at Tyler, Teresa P. Gordon of the University of Idaho and Elizabeth K. Keating of Boston College — said the failure of organizations to punish those who steal from them was perhaps one of the biggest reasons for fraud in the sector. She said she had worked at organizations that refused to dismiss employees caught stealing. [Emphasis mine.]
This is simply breathtaking. The report estimates that crime by employees costs charities a staggering 13 percent of the gifts they receive annually.
But even more troubling is Ms. Greenlee’s assertion of sector-wide silence. The initial crime is bad enough, but to try to cover it up for fear of dampening future donations is just as bad.
Nonprofit executives who overlook fraud should be fired. Boards that allow their organizations’ senior leadership to skate from embezzlement and cheating should be replaced.
Immediately. | 501(c)
Related Stories
POSTED IN: Accountability, Boards, Ethics, Illegality
0 opinions for Has the Sector Learned Nothing about the Cover-Up Being Worse Than the Crime?
No one has left a comment yet. You know what this means, right? You could be first!
Have an opinion? Leave a comment: