Not-for-profits need a whistleblower ethics hotline and case management system. Not-for-profits have much to lose in the event of fraud or ethical breaches.
Reputational damage, financial losses and employee distress can lead to long term organizational dysfunction and fundraising paralysis. Fraud can erode as much as 10% of an organization’s revenues. For a not-for-profit to remain competitive and relevant to target donors, they must introduce basic due diligence processes such as internal controls, accounting policies and conduct background checks on their staff and volunteers.
With the implementation of a confidential employee ethics hotline, early detection increases by as much as forty percent. While the average amount lost to fraud in the typical non-profit is less than in the for-profit world, the damage can be even worse given the nature of the business and the vulnerability of reputation. Non-Profit organizations understand the competition for donor loyalty and every possible risk to reputation – even the charitable status – must be addressed and mitigated.