Protecting the Mission: Helping Nonprofits Stay Ahead of Fraud
Authored By Tisha Ritter, Treasury Management Officer, Hills Bank
Nonprofits play an essential role in our communities. They step in where needs are greatest, provide critical services, and often do so with limited staff and tight budgets. This work is deeply personal to me. Before joining Hills Bank, I spent many years working in the nonprofit sector as a fundraiser, so I understand firsthand how much dedication, trust, and financial stewardship it takes to keep a mission moving forward.
That experience is why I am so passionate about helping nonprofits protect their financial resources today. Unfortunately, fraud is a growing risk for organizations of all sizes, and nonprofits are increasingly being targeted.
Why Fraud Is a Growing Concern for Nonprofits
Across the banking industry, we are seeing more businesses and nonprofits experience fraudulent activity, especially check fraud. While checks may seem old fashioned, they are still widely used by nonprofits for donations, vendor payments, and operating expenses. As payment systems move faster and fraud tactics become more sophisticated, the window to detect and stop suspicious activity continues to shrink.
Many nonprofits operate with lean teams, which means fewer internal controls and less time to monitor daily account activity. That combination makes them especially vulnerable to fraudsters who know that even one successful attempt can cause significant disruption.
What Is Really at Stake
When fraud impacts a nonprofit, the damage goes far beyond a financial loss. A single incident can interrupt programming, pull staff away from mission focused work, and erode donor trust. Every dollar lost to fraud is a dollar not going toward the people and communities the organization serves.
Reputational risk is also a serious concern. Nonprofits are built on trust, and maintaining that trust is critical to long term sustainability.
Practical Steps to Reduce Fraud Risk
The good news is that there are effective tools available to help nonprofits protect themselves.
One of the most important steps any organization can take is regularly reviewing online banking activity. Time is critical when it comes to fraud. The sooner suspicious activity is identified, the more likely it can be stopped.
Another powerful tool is Positive Pay, which is considered the gold standard for check fraud prevention. With Positive Pay, nonprofits provide the bank with a list of checks they have issued, including the check number, amount, and payee. When a check is presented for payment, it is compared against that list. If something does not match, the item is flagged for review, and the organization decides whether to approve or reject it before any money leaves the account.
This type of protection not only helps prevent losses, but also provides peace of mind for nonprofit leaders, allowing them to stay focused on their mission rather than worrying about fraud attempts.
A Partner You Can Count On
At Hills Bank, we are committed to supporting and protecting the nonprofits that do so much for our communities. I encourage any nonprofit to reach out to a Hills Bank Treasury Management representative to learn more about fraud protection tools and identify any gaps that may exist.
Fraud is not slowing down, but with the right safeguards and the right partner, nonprofits can stay ahead of the threats and continue doing the important work our communities depend on.
