The Madoff Complex

Through the years, there have been numerous scandals affecting the nonprofit sector. the American Red Cross has had its share over the years especially regarding the blood supply. Other nonprofits have had various executives embezzle, spend lavishly and misspend funds. With Bernard Madoff, key staff and key board members were bamboozled into investing money without the controls that normally would be in place within the by-laws and as supplements to the by-laws. For example, an nonprofit organization ought to have an investment policy that has its own safeguards built into it. These safeguard ought to be in place ahead of time...before neighbor, Miss Liz, leaves your organization 1000 shares of Hershey Candy Company. It is really important that boards in the nonprofit sector establish organizational and management policies. These should be reviewed on an annual basis. If the organization that you are affiliated with is in a large or relative large city, look for a pro bono assessment by a law practice of your current policies.