by Daniel Vaknine
When employees in NGOs feel embarrassed speaking up within, it raises the risk enormously that any misconduct or unethical practice will be revealed publicly and lead to irreparable damage to the organisation’s reputation and cause. With the new enactment of whistleblower protection legislation, having a trusted whistleblower system in place within your NGO or charity is vital. Not only does this protect your organisation from scandal, but it also provides another layer of safeguard for employees and volunteers, particularly valuable in such value-based cultures.
Common Compliance Risks in NGOs and Charities
One of the most effective compliance risks in charities and NGOs is financial wrongdoing. Unfortunately, these issues are very prevalent. In a 2018 report by the Association of Certified Fraud Examiners, it was reported that the median loss to a charitable endeavour due to fraud is approximately $75,000 which made it clear just how severe the issue is.
The very fabric of charities and NGOs (frequently involving high cash balances, volunteer environments centered on trust, and weak internal audit processes on occasion) puts them at risk of financial misuse. Fraud exists in organisations of any size and type, and new methods continually emerge.
Misuse of Charitable Funds
It is hard to accept the chance of internal fraud exists, but such abuse occurs routinely throughout the globe. Most typical abuses involve misuse of cash donations or unbudgeted utilisation of organisational credit cards for personal gain. Regular, third-party audits of finance operations are necessary, especially considering the frequently limited resources available to non-profits to effectively police themselves.
Fraudulent Expense Claims
Another problem that exists frequently is filing false or fake claims of expense and overtime reports. Have satisfactory procedures for validating and sanctioning expenses, and for on-time filing, with receipts and routine examination by independent auditors.
Fostering a Whistleblower Culture
To have an effective whistleblowing culture, employees and volunteers need to trust in the organisation’s readiness and capability to respond to their concerns. Here are some tips to encourage whistleblowing:
- Organisational Confidence: Are your employees assured that their concerns will be addressed firmly and discreetly? Employees who doubt the effectiveness of the system will remain silent.
- Cultural Barriers: Realise that differences in terms of seniority, gender, age, or organisational culture may obstruct open communication. Measures must be taken to neutralise such obstacles.
- Fear of Repercussions: Employees should really believe they will not have to endure repercussions, even indirect ones, for reporting concerns.
- Process Awareness: Ensure that all persons are reminded from time to time about how, what, and why to report. Regular communication (at least annually, preferable quarterly) ensures the integrity of your whistleblower policy.
Also read: 3 ways to encourage employees to report malpractice
Implementing Your NGO’s Whistleblower Policy
1. Set Clear Guidelines
Your whistleblower policy should clearly define procedures, confidentiality guarantees, definitions for reportable issues, and the response procedure, including the possibility of law enforcement involvement. Permitting and enabling anonymity also helps establish faith in the system. Professional external providers like Visslan can offer pre-prepared whistleblower policies if your NGO prefers standardised guidelines.
2. Actively Promote the Whistleblower Process
To be successful, your whistleblower system needs staff and volunteers to know what is required for reporting. Provide clear guidance by way of internal guides or training sessions as to what to report, why, and to whom.
3. Designate Responsible Whistleblower Officers
Designate neutral individuals, either internal staff with suitable seniority, such as HR officers, or external experts such as specialist lawyers, to handle and investigate whistleblowing reports properly. Their credibility, independence, and experience are necessary for effective case management.
4. Systematic Response Procedures
Evidently describe the process of dealing with whistleblower cases, investigations, and resolutions. The employees should be informed when and how the feedback will be provided. Legal compliance should also be observed, particularly under the whistleblower protection law.
5. Regular Review and Improvement
Regular checking and scrutiny of whistleblower case management allows organisations to monitor the performance of their systems and potential for development. Regular examination of anonymised case information means you are maintaining the whistleblower function in its ability to reduce risk and encourage organisational integrity.
The author, Daniel Vaknine, is CEO and Partner of Visslan, a Swedish-based whistleblowing solution to simplify whistleblowing and compliance with the new EU Whistleblowing Directive.
