The New York Times reported today on a study by four college professors who examined the incidence of fraud by nonprofit employees or volunteers and concluded it's (fraud) is huge and maybe the money defrauded cumulatively equals the amount of funds given to nonprofits by foundations and corporations -- that would indeed be HUGE!
Clearly, the only thing wrong with tainted money is there taint enough of it. And while the article visited with some of the notables in the nonprofit sector and these folks pooh-poohed the conclusions of how big fraud really is in the sector, any numbers even coming close to the conclusion is way overboard.
Who's to blame I ask? Not surprisingly, I believe nonprofit boards are to blame lacking poor policies and poor procedures and poor oversight. Nonprofit boards should be overall ashamed of these findings even if the findings are overblown by 1/2 of the reality. This is committed citizens' money being lost and committed causes not being served. Nonprofit boards, WAKE UP!
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Nonprofit Fraud Report Out Today
Comments
Re: Nonprofit Fraud Report Out Today
by
MaryLee Thorne
on Sat 05 Apr 2008 07:25 PM EDT | Permanent Link
I thoroughly agree that atwhatever scale, fraud and other violations of the public trust in non-profits lies with the negligence, inadequate committment and virtual lack of "punishmments" for ignorance/abdication of stewardship responsibilities. greater than the potential for employees to abuse their positions for personal gain, are the millions who, though constantly called upon to promote and police their organizations for evidence of wrongdoing. Even if the employee does nothing more than bring to the attention of superiors and volunteer leadership, that "messinger" is far more susceptable to retalitory dismissal, reputation disparagement and career destruction. And I can tell you from personal experience, that professional cannot count on professional organizations, Independent Sector and even attorneys that specialize in non-profit corporation law. They may be sympathetic, but most often specialists in corporate law firms, are prohibited from defending employees against the actions, legal or not, of employers. Broadly speaking, the legal profession, including employment attorneys, aren't even aware or recognize the ramifications of a "non-profit professional" abdicating his/her responsibility to discourage both the pertception and reality of impropriety within the organizations they work for. Rather than empathizing with a "higher" expectation of maintaining public trust, embodied in dozens of "codes of ethics and standards of behavior," comparable to bar association rules, even the highest level, relatively highly-paid non-profit executives will not find attorneys anxious or committed to defend them for cases of whistle blowing, false claims, defamation, constitutional unemployment "because compared to for-profit executive clients, your value measured in earnings does not justify the work relative to the fees they can expect to earn. Contrary to respect for standing up for accountability and transparency, a non-profit employee that takes seriously their obligation to facilitate their employers' vigilent self-regulation (including effective oversight of fellow employees), stands more likely than not to invite vicsious backlash, from the very trustees (defensive CEO's), that are supposed to have the most to gain--protection from liability and public censorship. Even to the extent these leaders give lipservice to their ultimate accountability, through declarations, written policies and procedures, based upon my review of caselaw and records of "behind the scenes" discussions re: legal regulation among the most influential special interest players, most incidents of wrongdoing including threats and retaliation towards those who make problems known, their expectation of blamelessness and impunity is extremely rational,
I am devoting my doctoral work to this "flaw" as well as other inadequacies of leadership development in this sector, motivated and informed by thirty plus years on the front lines. Though I see much that inspires cynacism and hopelessness, too much is at stake for our country and our world to throw up my hands and just throw stones. Better to follow in the footsteps of the policy maker/practioner/ scholar, Woodrow Wilson, to find and fight to fix the broken pieces. Trackbacks
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Thanks Readers!! The number of folks reading this blog has grown steadily. Unfortunetly, this blog host is not able to handle the traffic and I have moved my blog.