Nonprofit Fraud: It’s a People Problem, So Combat It With Governance

Skimming cash, purchasing schemes and financial statement fraud—three very different types of fraud that nonprofits must prevent, detect and insure against. Still, behind each of them—and every variety of deliberate, deceptive acts against nonprofits—there’s a fundamental and shared dynamic at play.

Fraud isn’t just an operational or financial risk. It’s inherently a human risk, meaning it often crosscuts numerous functions and departments within a nonprofit organization. Not only that, but the people behind these acts are complex. They are pressured by varying circumstances, motivated by different opportunities and self-assured by their own unique rationales. Making matters more complicated, fraud is not always a solo act.