Nonprofit fraud is in the news a lot these days.
Despite Bessent’s suggestion, there is no clear data about how common nonprofit fraud is or how prevalent it is compared to corporate fraud or acts of fraud by people employed by government agencies.
The Association of Certified Fraud Examiners also has found that nonprofits are less likely to be trained than their peers in other sectors to identify evidence of fraud risks. That can make their staff and leaders less prepared to spot and deal with fraud compared to private businesses and government agencies.
Diversion of assets means that money has been taken from a nonprofit, decreasing the funds available for it to fulfill its mission.
Providing Hope VA shut down following Arehart’s fraud conviction.
About 1 in 3 states didn’t even employ one staffer whose full-time job was to ensure that nonprofit funds were properly managed and that people in their states who ran nonprofits were upholding their financial and ethical duties, according to the survey.
The federal government plays a role, too.
This pressure to keep overhead spending low can lead U.S. charities to not make fraud prevention and detection a high priority.
Nonprofits may also hesitate to report suspected fraud or theft because they worry that it could hurt their reputation among donors and by extension future funding.
