Non-Profits Must Practice Fund-keeping to Protect AssetsPublished on 2nd March 2020
Nonprofits have in the past not been required to report on assets to the degree that they are required to these days. Most donors, especially those who give unrestricted funds tend to be happy to trust the expertise of the organization to deliver aid and development to communities without the need for a detailed report. This is changing. Donors are now very keen on what happens to the assets that they have donated or
contributed towards and care about how this is being used and any future revenue that is being generated from its use.
The 7 important elements listed below should be incorporated as part of any non-profit organization’s operational plans for implementing a ‘Fund keeping’ approach to protecting assets:
1) Asset Identification and Control – Information can lead people to your assets. So all types of information should be treated as assets, and should be carefully controlled. Anything from your strategic plans to partnership agreements and advertising should be reviewed to ensure that they convey only the information that is necessary for staff, volunteers and the public to take an action not just to make a
2) Security as a Priority – As a manager in a non-profit organization, you must constantly prioritize and reinforce the need for both physical and information security. Staff should be encouraged to think about themselves as custodians for both the giver and the beneficiaries and treat assets as such.
3) Roles and Responsibilities – "But I thought it was HIS job!" is a common sentence that tends to shift the blame rather than create a constructive discussion that brings about a solution. If anybody is unclear about who has responsibility for a procedure that protects an asset, it must be addressed immediately.
There must be an individual, preferably a more senior member of staff, who are responsible for assigning security-related responsibilities. The chief executive is ultimately responsible and the best way to ensure proper governance is to keep them involved, as much as it is reasonable in the assignment of security duties.
4) Security Policies – Policies are critical and serve as a reference point both internally and externally to the approved ways of working within an organisation. They also act as a deterrent for opportunistic staff and volunteers who thrive in organisations’ without tight controls. During audits, organisations’ are reviewed against their own internal policies and the ability of staff to understand and implement one’s
own policy is a great first step in fund keeping.
5) Educating Staff and Volunteers – Policies are easier to understand and follow if they are short, clear, concise and are constantly being reinforced. So your security policies should be kept visible and even discussed regularly, with incentives or real-life illustrative stories that can be communicated to staff at every opportunity. This way they will know that upholding security policies are a priority, and that theyare required in order for the organization to be successful. An idle policy is a policy that is not likely to be complied with.
6) Systems – it is a good idea for non-profits to look at each asset type: tangible or intangible with a view to identifying the best way to ensure its consistent protection. For example, cash is an asset and it can travel from the donor to your staff, office, beneficiaries or to the bank first before it is disbursed. Each protection method should reflect the state of the asset, and should be turned into a procedure that can
be repeated easily. You must then enforce the method as ‘the only acceptable way’ to handle specific types of assets. Creating repeatable procedures that people use as a matter of habit results in a set of systems in which you can have a high degree of confidence. Computers or hand held cameras are assets and should be tracked. It should not be acceptable for project or company assets to be used, especially
out of the organisations’ building without proper identification tags or mechanisms attached to it. This is good stewardship.
7) Monitoring Incident Reporting – As no amount of planning or preventative measure can guarantee a 100% success, you still need a way to detect and respond to incidents in a clear and consistent way. Incident reporting can be difficult and often avoided if there is a blame culture within the organisation. Nevertheless, staff members within your organisation must be aware of the policies and procedures that
exist if they decide to report an incident. The ability to act fast could limit losses and prevent repeat offences in the future.
A full awareness of security policies, procedures and consequences are key to sustaining public trust. If the public does not think you are stewarding their donations well, they will reduce or stop giving to you ‘Fund keeping’ is an attitude that every non-profit organisation should have, not only when they plan a campaign to acquire new assets, but on an ongoing basis.
At FINDEV Consulting Ltd, we offer business consultancy that is tailored to your fundraising needs and aspirations. We carefully work through your business plan, existing internal controls as well as other external contextual factors to help you secure and successfully retain the funds raised to develop the communities that you work in.