The risk of significant financial fraud may be lower for not-for-profit organizations than it is for for-profit entities, but its impact can be just as paralyzing.
Not-for-profit organizations represented only 9 percent of the Association of Certified Fraud Examiners’ study of 2,690 fraud cases in its 2018 Report to the Nations. Regardless of the incidence, there’s an obvious financial impact from fraud. Total fraud cases in the 2018 Report to the Nations resulted in estimated losses of $7.1 billion, which the ACFE acknowledged is only a fraction of the true cost of global fraud. The study concluded that the median cost of fraud to not-for-profit organizations was $75,000, but these costs do not include the cost of attorneys, forensic accountants, and other specialists who will be called upon to assist with the investigation.