2016 Fraud Survey – BDO

I’ve talked about fraud in the charity sector before, and my personal take on it is that it under reported, because charities don’t want their donors to know that there are people committing fraud (no matter the level.)

Yes, there is a risk to funding if general donors (mums and dads) learn that there has been fraud committed at a charity they support, but in reality isn’t honesty the best policy, shouldn’t donors be told what’s been happening?

It seems that the majority of charities have systems in place, especially given the new reporting standards required of them, and know they can get help and support from Charity Services; so maybe the message is getting across, especially with smaller organisations, that there is help available to them and that there’s no shame in asking .

Read the summary of the BDO Not-for-Profit 2016 Fraud Survey here.

If your organisation detected fraud, what would you do, would you take action, would you let your supporters know? Either leave a comment below or email me charitymattersnz@gmail.com.

 

 

 

Charity Rip-offs

Charities have a hard enough time making ends meet to enable them to deliver their services.

When we hear about frauds and thefts in the sector, either carried out by people in organisations or by others using charity as a means to make a quick dollar, or the blatant theft of collection boxes; it makes you wonder what type of people would rip of others in need.

Not only do the scumbags who fleece charities harm them directly, but they’re tarnishing the entire sector. When stories of what some have done break – people become concerned and wonder if the money they are giving is getting to where it’s meant to be.

In 2012, BDO released a report on Not-For-Profit Fraud Survey, with these among the results:

  • 12% of organisations suffered fraud in the past two years
  • Specifically, 75 organisations suffered 330 frauds in the past two years
  • Fraud totalling $2,916,616 was reported, with the average fraud being $8,838
  • Of the respondents who experienced fraud, 49% had suffered fraud previously
  • Almost one in three organisations with turnover exceeding $10 million suffered a fraud
  • 25% of respondents who experienced fraud believe the full value of the fraud was not discovered
  • Main factors contributing to fraud occurring were breaches of trust and overriding of internal controls
  • The most common type of fraud reported was cash theft (40%)
  • The average online payment fraud was $370,000
  • The average duration of each fraud was 14.5 months.

But fraud, or misrepresentations by people outside of the sector is harder to monitor.

The recent case of the woman who used an online giving tool to raise funds for non-existent cancer treatment, again highlights risks the sector faces with reputation management.

This case again will make it harder for people to make the decision to give; they will be thinking twice about whether the campaign, individual or organisation is genuine.

We all must do our bit to keep our eyes and ears open to anything that may seem odd, that may not be kosher and, if we’re concerned we should be checking with organisations to ensure everything is above board.

See also:

Not-for-profit Fraud Survey

Non-profit groups need to be vigilant about fraud – survey

Risk Management – Mitigating Fraud