Leadership and The Workplace

Nonprofit Spark

Renee McGivern

Nonprofit Spark – Nonprofit crisis management best practices: Dealing with fraud – 03/19/12

Every month, I see at least one story in an American newspaper about an employee of a nonprofit who has stolen money from the organization. Theft happens across a spectrum of large and small, national and local, efficient and inefficient nonprofits. In every story, the leaders say they were completely shocked that a person they trusted, worked beside, shared lunch with, and thought they knew was stealing from their non-profit.

So what is it like to discover fraud and how would you handle it? Recently, there was a story in the newspaper about Open Arms of Minnesota, a nonprofit that delivers meals to the chronically ill. The organization’s leaders had just discovered that a trusted employee had set up arrangements with several agencies to deliver meals to their constituents. Unbeknownst to the agencies, their payments for the meal deliveries were being pocketed by the employee. The incident is still under investigation but early on, it looked as though the theft involved more than $100,000 in less than a year.

When I read the newspaper article, it was clear to me that the organization, Open Arms of Minnesota, was doing everything right in how they were handling the situation. I am so pleased to have on the show this week, Jennifer Van Wyk, deputy director of Open ARMS of Minnesota, who generously shares how they have been dealing with this crisis and in particular, communicating about it. I suggest you read the letter they sent their constituents to get context for the show: View Letter to constituents on their website.