Case in Point

Small-and-lean entity learns to deter fraud after $690,000 loss

Three medical school students founded Streets of Care to help fill critical health care needs of the homeless. Ten years later, the friends had their own thriving practices, and Streets of Care had blossomed into a successful organization with about $4 million in annual expenses. Though the founders served on the board of Streets of Care, they were no longer involved in the nonprofit's daily operations.

Cara McFarland, one of the founders, was reviewing a list of the organization's beneficiaries and found something suspicious. Streets of Care was sending funds to three organizations at the same mailing address even though their buildings were in different parts of the city. (I've changed all organization and participants' names in this column.)

McFarland was the chair of the organization's newly formed audit committee. She'd attended a seminar in which I shared the duplicate address test and other tools. So after her discovery at Streets of Care, she reached out to me to share the results of her duplicate address test and enlist my help. I explained that one exception from one test wasn't enough predication to begin a fraud examination. I advised her to test the duplicate address against all current and previous addresses that her employees used. McFarland called me back a few hours later, and the excitement in her voice was palpable. She had a match.

The queen of development

Jordana Stroud excelled at fundraising. From as early as anyone could remember she had a knack for getting people to part with their money for a good cause. She paid her way through Indiana University by fundraising on behalf of various nonprofit organizations and earned a bachelor's degree in nonprofit management. As a development professional, she led fundraising and major giving initiatives for organizations in Kansas City, Missouri; Denver, Colorado; and Newark, New Jersey.

At the age of 42, Stroud decided to take a break from her career and relocate to Los Angeles so her nine-year-old daughter could follow her dream of becoming an actress. It didn't take long for the newly minted stage mom to start looking for nonprofits she could help.

Stroud started as a volunteer for Streets of Care — mostly managing their established donor base — but she quickly demonstrated her ability to bring in much-needed cash, and within six months the organization had offered her a full-time position. Two years later, Streets of Care named her executive director after the previous ED's retirement. Stroud lived up her to reputation by bringing in close to $36 million in five years, which effectively doubled Streets of Care's program capabilities.

For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.