Should the law require nonprofits and charities to bond officers who handle money?

In the past few weeks, two individuals pleadguilty to embezzling money from nonprofit organizations. One woman, the formertreasurer of the Institute Volunteer Fire Department in West Virginia, pleadguilty to embezzling $25,000 from the fire department, and an additional$33,000 from the West Virginia State University Alumni Association, for whichshe also served as treasurer. Similarly, the wife of the former executive directorof Charleston’s Multicultural festival plead guilty in U.S. District Court tofederal tax fraud after she admitted to embezzling over $300,000 from theorganization. Both of these organizations rely heavily on public funding.

The misappropriation of public funds raisessignificant questions regarding whether nonprofit organizations and charitiesshould be required by law to bond officers who handle public money. Advocatesin favor of legally imposed bond requirements argue this sort of law would helpthe organizations get their money back when funds have been mishandled.

However, in many states, nonprofit organizationsand charities are not required by law to bond officers who handle money. Still,some nonprofit organizations are taking a more proactive, preventative approach byincluding bond requirements in the organization’s bylaws.

http://wvgazette.com/News/201302060122

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