Join The NonProfit Times: or Become a member

Subscribe: Print Publication or Newsletter

Stay connected.
Stay informed.

  • Where fraud is occurring at nonprofits

    By The NonProfit Times - November 6, 2007

    It is a sad fact that fraud has taken place at nonprofit organizations, just as it has out in the for-profit and bureaucratic world.

    At the American Institute of Certified Public Accountants Not-For-Profit Industry Conference, Gerard M. Zack, president of Zack Accounting and Consulting and founder of the Nonprofit Resource Center Inc., outlined the recent trends that are showing up in nonprofit fraud.

    According to Zack, a 2006 study showed that private companies had 36.9 percent of fraud cases, public companies 31.7 percent, government agencies 17.6 percent and nonprofits 13.9 percent. The median loss was $100,000.

    He noted that while traditional check tampering and disbursements continue to be prevalent, certain varieties within those areas have become apparent.

    They are:

    • A significant increase in cases involving corruption, including kickbacks, bribes and undisclosed conflicts of interest;
    • An increase in cases involving electronic access to or theft of data, sometimes while employees are working off site, hacking into networks, etc.;
    • An increase in external attempts at check tampering and electronictransfers from NPO accounts;
    • An increase in cases in which a nonprofit is held liable for fraudsperpetrated by its employees or agents against others; for example, an employee steals credit card information of a member of the organization; and,
    • An increase in the use of sham or impersonator charities.

    This article is from NPT Weekly eNewsletter, a publication of The NonProfit Times. Subscribe to NPT Weekly or any of our other enewsletters and get the latest nonprofit news and stories delivered to your inbox.

    You may also like:


Stay informed, catch latest trends in the nonprofit space.

Subscribe to Our Free Newsletter

No obligation, unsubscribe at anytime.

Success! Check your email inbox.

Follow Us On Twitter

Blog Posts Archive

NPT 2015 Buyers' Guide

Newsletter Sign-up

click here to return to the previous page