Nonprofits and Fraud Study: Are Leaders Too Complacent About the Risk?

However, only 20% of leaders said their organizations have a "facilitated fraud risk assessment process."

"The practices that the majority of nonprofits have in place may in fact just be 'table stakes' and probably do not go far enough," Mr. McNee said. "Fraud at nonprofits is arguably much more common than most organization leaders would suspect." A third party analysis of federal filings that shows that more than 1,000 nonprofits said they had discovered a "significant diversion" of assets between 2008 and 2012(1). And another study concluded that nonprofits and religious organizations accounted for one-sixth of all major embezzlements, placing the nonprofit sector second only to financial services(2).