The recession has brought a variety of ills to the nonprofit world, and one that may be going overlooked is an increase in fraud — theft, embezzlement, and other financial skullduggery.
“Desperate employees and board members are doing desperate things at an alarming rate,” writes Gary Snyder, a nonprofit consultant, on the “Keeping a Close Eye” blog run by the National Committee for Responsive Philanthropy, a watchdog group in Washington.
Mr. Synder runs the Nonprofit Imperative, an online newsletter that tracks charity fraud, and he reports that March of this year saw the “largest amount of misdeeds ever”—a 63-percent increase in instances of fraud at nonprofit groups over March 2008. (See a Chronicle article on how charities can deal with fraud problems.)
Those findings appear consistent with the broader trends reported by the Association of Certified Fraud Examiners, a trade group in Austin, Texas, which recently surveyed some 500 of its members and found that more than half had seen an increase in fraudulent activity over the past 12 months.
“The dismissive response on the part of nonprofit leadership to this most important problem is puzzling,” Mr. Snyder writes. “Their reliance on the government to weed out what they say is ‘a few bad apples’ has resulted in a firestorm of criminality. The apparent boredom by agency boards is equally puzzling.”
In a brief follow-up post, Mr. Synder reports on a new “wrinkle” (pun intended) in nonprofit fraud. He reports that this week alone there have been seven examples of alleged fraud committed by older people, including a 65-year-old accountant charged with embezzling over $900,000 from the Tucson Museum of Art.
“Is this a trend or a sign of the recessionary times?” Mr. Synder asks.
What do you think?






