Nonprofit Organization Fraud

A NONPROFIT ORGANIZATION is a business that has been granted exemption from federal corporate income tax because it engages in an activity that is in the public interest. A wide variety of businesses may apply for nonprofit status, including large national corporations such as arts organizations, schools, hospitals, and religious establishments, as well as smaller local businesses, such as daycare centers or small charities. Nonprofit organizations are affected by the same kinds of fraud that adversely affect the running of all businesses, such as embezzlement or fraudulent management practices. Fraud can cause substantial damage to nonprofits in two major ways: first in the loss of funding that was most likely limited to begin with, and second through the tainting of the nonprofit's reputation and credibility ...

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