Nonprofit organizations should be concerned about fraud because fraud accounts for two-thirds of all crime. The financial consequences of fraud include not receiving nearly as many donations because of lack of donor confidence, which means that you cannot keep your nonprofit operating any longer.
To prevent fraud, it is important to practice risk management
It is important to define acceptable and unacceptable activities to limit the risks, fully investigate suspected fraud, and treat offenders in a consistent manner. The staff and volunteers at your nonprofit are needed, but you also need to trust them. You can screen volunteers and employees prior to hiring, avert financial pressures and temptation from them, and prevent opportunities for theft and error. Remember, by screening employees and volunteers you are looking out for the best interests of your nonprofit organization and the future of the community you serve.