FARMINGTON – Let me tell a fictional version of a story that many in the legal profession know by heart.

A concerned member of a nearly defunct but once thriving church or other charitable group walks through my door lamenting that some $50,000 of its funds just can’t be located.

The concerned church or club member relates that its treasurer, “Ellie,” now 87, is reputed to have placed the investments — once earmarked for scholarships — in the freezer compartment of her refrigerator at home.

Ellie hasn’t been acting quite like herself recently and the once revered community icon of the once buoyant charitable establishment hasn’t given a report on the whereabouts of the money for about three years now. Moreover, the organization that once boasted 65 members is now down to five.

It stopped conducting regular meetings a decade ago, when Ellie was re-elected to her 19th term.

Eventually, someone summons the courage to make the approach. A niece finds old certificates of deposit and bonds stashed away in a paper bag in the attic of Ellie’s home.

The charity is dissolved and the funds turned over to a treasurer of another local organization to handle.

The close call with Ellie and the temporarily missing $50,000 has a sanguine outcome that nevertheless illustrates the perils when well-intentioned volunteer groups handle significant amounts of community charity funds over a long period of time.

Others are not so fortunate. Take the case of the retired Portland area businessman who embezzled $430,000. Investigators in 2007 proved that Bob Libby, then 76, stole at least that much from four charitable organizations between 1999 and 2006. The victims were three Portland-based Masonic groups and the Maine Charitable Mechanic Association.

Among its missions was running a learning center for dyslexic children.

Libby had been the sole bookkeeper for the groups, for some of them a period of nearly 20 years, and was otherwise an esteemed leader in the Portland fraternal community.

Prosecutors caught up with Libby when water and electricity to one of the organization’s buildings were about to be shut off. By this time, the money was gone. Libby asserted he spent nearly all the stolen funds on home care for his wife, Charlotte, a retired South Portland High School teacher who suffered a stroke in 2002.

Numerous other Maine nonprofit organizations have also been victimized by light fingers from within their midst. Among them are Christ Episcopal Church in Augusta, whose part-time financial administrator pleaded guilty in 2009 to embezzling $49,000; and NAMI-Maine, the state’s largest mental health patient advocacy organization, hit for $257,000 in an embezzlement that sent its bookkeeper to prison in 2008.

To be sure, these losses involving nonprofits pale in comparison with such multibillion-dollar private sector heists as those entailed in the Bernard Madoff scandal.

We as individuals can take a few simple steps that could markedly reduce both the trauma of embezzlement and the anguish of financial negligence in our local nonprofit organizations. Here’s a few of them:

Make sure your treasurer is bonded. Even groups that raise close to $100,000 a year find that the annual premium usually runs under $200. It’s worth it.

Always require two signatures on every check. Require that at least one other officer countersigns all checks that the treasurer issues.

Require an annual audit. A professional one can be a bit pricey — $3,000 for the $100,000 organization. If that won’t fly with your group’s board, then recruit some members to provide some periodic oversight of those handling the funds.

Don’t stockpile the funds your organization raises. Though this idea perhaps runs counter to frugal Yankee instincts, saving money is one of the worst things some volunteer charities wind up doing.

Very few of the social organizations with us in Maine just a few decades ago are anywhere near as viable as they were in 1960, if indeed they have managed to survive at all. (Remember that charming wooden 19th-century church that’s now a museum or theater?)

Instead, use your club or church’s energy to raise and immediately spend your funds for philanthropic purposes.

You will see immediate results, and needy groups will be aided while the need is fresh. Let future needs be handled by future campaigns.

In addition, your group will thus be removing the funds from the palsied hand of a fragile future custodian, one who will be neither as willing nor as able to fulfill your present-day idealism. The “Ellies” of the future will be grateful.

– Special to the Press Herald