How to Report Nonprofit Fraud
Identify the fraud., Gather evidence of the fraud., Notify the police of the fraud., Contact the nonprofit if fraud is committed by an employee.
Step-by-Step Guide
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Step 1: Identify the fraud.
Any nonprofit that defrauds people has committed a crime.
Although fraud can take many shapes, there are two fraudulent schemes nonprofits often commit:
Deceptive fundraising.
The nonprofit might make misrepresentations about charitable giving, such as the fair market value of donated assets or whether the nonprofit complies with donor-imposed restrictions on a gift.
Fraudulent financial reporting.
The nonprofit might misclassify donations in order to mislead donors or charity watchdogs; misclassify expenses for fundraising and administration; or issue fraudulent statements of compliance. -
Step 2: Gather evidence of the fraud.
The police would benefit from receiving as much evidence as possible that supports your accusation of fraud.
Be sure to gather the evidence legally.
For example, don’t break into someone’s computer or office.
Also, don’t secretly tape a conversation since this is illegal in many states.Instead, get copies of evidence available to you:
Financial records.
If the nonprofit has committed financial fraud, then you will want copies of the records which show the fraud.
Advertisements.
The nonprofit might misrepresent its activities or purpose to the public.
You should get samples of any misleading flyer or advertisement.
Letters or other communications.
If the nonprofit lies to a donor, then you should get a copy of the misleading communication, provided you can legally access the letter or email. , You should report this crime to the police so that they can investigate.
Stop into the police station or call.
If the police want to see your evidence, then share copies of all documents with them.
Your state may also run a charities watchdog.
For example, New York state’s Office of the Attorney General runs a website, charitiesnys.com, which collects complaints about charities.You can visit the website and email a complaint or complete a complaint form., The nonprofit should also know if an individual within the organization is committing fraud.
In this way, the nonprofit officers or board can investigate and fire the employee if necessary.
Check if there is a hotline you can call anonymously.
Some nonprofits have created hotlines where whistleblowers can file an anonymous report of fraud.If not, then find an appropriate person in management to report the fraud to.
Make sure the person does not work under the person you suspect of fraud. -
Step 3: Notify the police of the fraud.
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Step 4: Contact the nonprofit if fraud is committed by an employee.
Detailed Guide
Any nonprofit that defrauds people has committed a crime.
Although fraud can take many shapes, there are two fraudulent schemes nonprofits often commit:
Deceptive fundraising.
The nonprofit might make misrepresentations about charitable giving, such as the fair market value of donated assets or whether the nonprofit complies with donor-imposed restrictions on a gift.
Fraudulent financial reporting.
The nonprofit might misclassify donations in order to mislead donors or charity watchdogs; misclassify expenses for fundraising and administration; or issue fraudulent statements of compliance.
The police would benefit from receiving as much evidence as possible that supports your accusation of fraud.
Be sure to gather the evidence legally.
For example, don’t break into someone’s computer or office.
Also, don’t secretly tape a conversation since this is illegal in many states.Instead, get copies of evidence available to you:
Financial records.
If the nonprofit has committed financial fraud, then you will want copies of the records which show the fraud.
Advertisements.
The nonprofit might misrepresent its activities or purpose to the public.
You should get samples of any misleading flyer or advertisement.
Letters or other communications.
If the nonprofit lies to a donor, then you should get a copy of the misleading communication, provided you can legally access the letter or email. , You should report this crime to the police so that they can investigate.
Stop into the police station or call.
If the police want to see your evidence, then share copies of all documents with them.
Your state may also run a charities watchdog.
For example, New York state’s Office of the Attorney General runs a website, charitiesnys.com, which collects complaints about charities.You can visit the website and email a complaint or complete a complaint form., The nonprofit should also know if an individual within the organization is committing fraud.
In this way, the nonprofit officers or board can investigate and fire the employee if necessary.
Check if there is a hotline you can call anonymously.
Some nonprofits have created hotlines where whistleblowers can file an anonymous report of fraud.If not, then find an appropriate person in management to report the fraud to.
Make sure the person does not work under the person you suspect of fraud.
About the Author
Danielle Garcia
Enthusiastic about teaching lifestyle techniques through clear, step-by-step guides.
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