‘Diversion’ of Nonprofit Assets Widespread but Little Noted

Hundreds of nonprofit organizations have reported hundreds of millions of dollars in losses to embezzlement, fraud, and other unauthorized uses of their money since the Internal Revenue Service began formally asking about such “diversions” in 2008, The Washington Post writes.

A Post review of charities’ IRS filings found that from 2008 through last year, more than 1,000 groups checked a box on their forms indicating they had discovered a “significant diversion” of assets. Many organizations routinely omitted key details of the fund drainage, with about half not disclosing the total amount lost, and cases involving millions of dollars often received little or no media attention.

The article spotlights several instances of major losses suffered by prominent nonprofit groups and links to a searchable database, assembled by the newspaper, of tax filings by nonprofits that disclosed asset diversions.