Charges of sexual harassment and discrimination are the next leading causes of employment practices claims. Nonprofit managers and boards must carefully establish and follow employment policies and procedures to reduce the risk of employment practices claims. Employment risks arise from the existence of extensive laws regulating the employer-employee relationship. Non-compliance can result in an employment claim and significant fees, fines or settlements. The laws and regulations include federal, state and local requirements.
Every nonprofit is vulnerable to fraud.
The theft or misappropriation of funds can have severe consequences. A single major theft of funds or equipment could jeopardize seriously a nonprofit's viability. The organization may suffer a cash flow crunch, loss of donor confidence, reduction in services and a loss of jobs. The public reporting of a loss could be devastating as media reports affect donations, the availability of volunteers and public goodwill. Hailstone also reports that fraud accounts for two-thirds of all crime.