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Digging Deeper: How non-profits recover from theft

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Eau Claire (WQOW) - In 2018, the Eau Claire County Humane Association's accountant, Nicolle Wilson was accused of writing herself a $60,000 check from the association's account. Police say it even included a forged signature of the executive director.

Board president Christina Thrun recalls what she felt when she found out, "It was shock, I was just in shock."

Thrun has been the board president for a little more than two year. She said that Wilson was only on hand for less than a year bookkeeping for the association.

"It was a situation where we had hired the individual to do our bookkeeping because we didn't have the capacity on hand to hire a full-time bookkeeper. She had made a poor decision."

Following an embezzlement investigation, Wilson was charged with multiple felonies including theft, fraud and forgery.

"We thought we had good policies in place," Thrun said. "You don't realize the holes unfortunately sometimes until the worst case happens."

The association's executive director Shelley Janke says luckily, they were able to recover the money so they weren't out any dollars but they were worried the case could deter future donors from giving.

Related: EC Humane Association strengthens financial management

"I think in the non-profit world, the community knows you survive with donations," said Janke. "So, when they hear that a theft has occurred, their instant reaction could be 'my dollars were taken and not used for the intent that they were donated.'"

Unfortunately, this case is not unique. In July, Renelle Laffe, the founder of Hope in the Valley, another non-profit in Eau Claire that helped people suffering from cancer, was charged with stealing more than $66,000 from the group.

Craig Olsen, CPA and CCIFP, works with non-profits and their finances. He explained why some people steal from these organizations.

"It's not so much that they can get away with it, it's the external pressure. Most of these people start out with the idea that they are going to pay the money back."

Olsen says there is a fraud triangle to explain their reasoning.

First are pressures that an individual may be facing like addictions, medical issues or a spouse losing a job. The second is rationalization, the idea that they will pay the money back or they are owed this money in some way. Pressures and rationalization are things that an organization cannot control. The third part of the fraud triangle is the only thing an organization can control: opportunity. If the right checks and balances are in place, the opportunity for theft will not exist.

"You'd be surprised how many people go from one place to another stealing," Olsen said. "Some organizations, some businesses, don't turn those people in because they just want the problem gone."

So how do non-profits recover from something like this?

Janke said the challenge went further than legal issues.

"It's very difficult because not only are you losing money, but that person also did a service to you. You had to figure out legally what to do but also operationally, I need to figure out who is going to do these next steps and how we continue to run with this person out of the picture."

Now, the Eau Claire County Humane Association has put more checks and balances when it comes to their bookkeeping.

"You can't help what people do to you, but you can certainly help how you respond to the situation," Janke said.

They believe their transparency about the situation helped keep the donations coming in. Thrun remains thankful for the continued community support.

"If we didn't have the support of the community, we would not be able to provide the food, the vet care and be able to adopt all these animals out and provide these cats and dogs who need loving homes the opportunity to get there," Thrun said.

With stories like the Eau Claire County Humane Association and the alleged embezzlement at Hope in the Valley, some may be wary to give to non-profits because of the risk of theft. However, Olsen gave some tips to look out for when you give to make sure your dollars are being used correctly.

  • Look to see how active the board is in the organization.
  • What kind of oversight is there? Is there someone there who can oversee the money that will be able to detect any theft?
  • Is there someone else who is reviewing the information and money? Many times this is the board.

Some other giving tips from the Better Business Bureau inlcude:

  • Press for specifics - ask how and where the money is working
  • Check websites - a charity's mission, program and finances should be on their site.
  • Check in with state charity officials if you have any questions.

Katie Phernetton

Katie Phernetton is one of the Daybreak morning anchors.

She joined News 18 in August of 2018 after working as a reporter for five years in the Green Bay market. Born and raised in Green Bay, she prides herself in being a cheesehead through and through.

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