An Overview of Fraud in Nonprofit Organizations and the Appropriate Approach to Prevent It

Abstract

Fraud within nonprofit organizations has been on the rise. The majority of nonprofits that suffered losses through fraud recently were public charities. However, it doesn’t matter whether the organization is small or large, fraud may occur anywhere from little leagues to health care organizations. Nonprofits diligently carry out their mission through relatively small sized staff and tight budgets. Not only are nonprofits as well as their donors surprised to navigate through these challenges, but also an unfortunate danger, fraud committed by employees, volunteers, organizations and executives. This article demonstrates that anti-fraud measures does not stop fraudulent activity as well as examining the fraud that occurs within nonprofit organizations. We begin by reviewing the description of what fraudulent activity is and how it ensues. We then review examples of certain cases of fraud in nonprofit. Lastly, we discuss how fraudulent activity should be prevented in nonprofit.