Thursday, March 16, 2006

smart nonprofit announces investigation

Oxfam International is temporarily suspending its tsunami recovery work in Sumatra due to financial irregularities it uncovered in a routine audit, and the announcement offers a great example of exactly how nonprofits can and should handle financial troubles: make them public. Today's New York Times article explains:
It is rare for any nonprofit group to make such problems public, much less before exhausting internal queries, but more organizations are striving to demonstrate their attention to good stewardship because donors have placed a premium on knowing how their contributions are spent and regulators have begun to intensify oversight.

The audit estimated losses of tens of thousands of dollars from its $48 million budget in 2005 for tsunami recovery. Too small to matter? We don't think so, as Oxfam's reputation can't be bought back once it's lost. In the meantime, they've lessened the level of criticism they might otherwise expect by identifying the problem, holding it up to the light, and reiterating their values of transparency and accountability. Would your organization do the same?

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