Posted on May 2, 2012

The former PTA president of an Atlanta elementary school was recently charged with felony theft by taking for allegedly stealing $57,000 in donor checks and deposits from the PTA over a three-year period.
http://www.ajc.com/news/atlanta/53-000-reported-missing-1420186.html

The well-known founder of a Montana-based charity has agreed to pay $1 million to compensate his organization for using it to promote and buy copies of his books following an Attorney General’s investigation.
http://www.nytimes.com/2012/04/06/business/greg-mortenson-three-cups-of-tea-author-to-repay-charity.html

A former Verizon worker in Atlanta was recently arrested and charged with trying to defraud the company through charity work.
http://www.ajc.com/news/north-fulton/ex-verizon-worker-arrested-1422308.html

I’ll spare you the gory details (use the links for more information), but recent headlines have highlighted a few individuals that have been accused of stealing, abusing power and lying in connection with their charity work. While some people naively assume that folks in the nonprofit world are all purely motivated by altruism, there are some among us (albeit it a small number, I would argue) that are motivated by greed. Don’t let those bad apples spoil if for the rest of us. Take these steps to protect your organization from human failings.

1. Adopt and follow financial policies and procedures that ensure adequate internal controls.
2. Adopt, be familiar with and follow a conflict of interest policy.
3. Ensure that the Board is strong and independent and performing its duties.
4. Consider adopting a written Code of Ethics that outlines the practices and behaviors that staff, board and volunteers agree to follow.

Here are a few resources on our website to help you:

Webcasts on Good Financial Policies and Procedures:
http://www.pbpatl.org/resources/good-financial-policies-for-nonprofits-101
http://www.pbpatl.org/resources/good-financial-policies-for-nonprofits-102

Webcast on Legal Responsibilities of Board Members:
http://www.pbpatl.org/resources/practical-advice-about-the-legal-responsibilities-of-board-members

Articles:
http://www.pbpatl.org/resources/conflict-of-interest-polices-disclosure-monitoring-and-enforcement
http://www.pbpatl.org/resources/principles-for-good-governance-and-ethical-practice
http://www.pbpatl.org/resources/private-inurement

Keep an eye out for our June 21st webcast on Conflicts of Interest.