A Pirate, a Piñata, and a $250,000 Near-Miss: Preventing Nonprofit Fraud!

Send us Fan Mail Nonprofit fraud doesn’t always kick down the door . . .sometimes you invite the vampire in and approve its invoice! Join pirate- costumed Justine Townsend of Your Part-Time Controller for a howling Halloween lesson in spotting sinister payment requests, protecting your nonprofit’s treasure, and keeping internal controls alive through the year-end fright fest. The pirate is friendly. The invoice might not be! With Justine in pirate gear, Tim Sarrantonio dressed as a piñata, and Julia C. Patrick emerging from a cauldron, this annual Halloween episode delivers plenty of laughs and a serious reason to rethink who gets through your financial front door. Today’s scams can borrow familiar writing styles, imitate executive voices, and arrive disguised as vendor paperwork you were already expecting. As Justine puts it, “You have to unmask the monster before you open the door.” Discover how social engineering uses urgency and authority to push staff past normal approvals. Justine shares a chilling near-miss: changed payment instructions on an expected construction invoice could have diverted $250,000. The lesson is simple: independently confirm changes before money moves. The conversation also explores holiday distractions, donation-platform card testing, third-party security, and check tampering. For smaller organizations, Justine explains how a board treasurer or finance chair can provide independent bank oversight, even when one executive director handles most daily tasks. Your monster-fighting toolkit includes segregation of duties, two-factor authentication, verified vendor information, and payment processes that leave time for human judgment. Automation can reduce repetitive work, but it still needs clear approvals and review. " Our job is to protect ourselves from the fraudsters,” Justine reminds us. That means reviewing controls when responsibilities change, staying alert to new schemes, and keeping safeguards in place through the year-end rush. Key Takeaways: - Confirm changed vendor payment instructions through an independent outgoing call. - Treat unusual urgency as a reason to pause and verify. - Separate vendor setup from bank reconciliation; add board oversight when staffing is limited. - Maintain approvals and verification through holiday deadlines and incident cleanup. - Review controls whenever staff responsibilities or financial processes change. #NonprofitFraudPrevention #NonprofitFinance 00:00:00 Nonprofit fraud: the real Halloween monster 00:01:55 AI impersonation gives fraud a convincing costume 00:04:02 Social engineering: how urgency opens the door 00:05:44 Pause before you pay: the nine-second rule 00:08:22 Voice spoofing and independent callback verification 00:08:42 Holiday deadlines and distracted finance teams 00:12:00 Vendor security and ghost invoices 00:15:40 The $250,000 invoice fraud near-miss 00:16:40 Check tampering and payment risks 00:18:24 Internal controls: your monster-fighting toolkit 00:19:55 Small nonprofit oversight and segregation of duties 00:24:49 When to reassess your nonprofit’s fraud controls Find us Live daily on YouTube! Find us Live daily on LinkedIn! Find us Live daily on X: @Nonprofit_Show Our national co-hosts and amazing guests discuss management, money and missions of nonprofits! 12:30pm ET 11:30am CT 10:30am MT 9:30am PT Send us your ideas for Show Guests or Topics: HelpDesk@Am