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October 31, 2013 at 10:25 AM
An analysis of IRS reports that large nonprofits fill out every year shows that more than 1,000 organizations disclosed the diversion of hundreds of millions of dollars in assets owing to investment fraud, embezzlement or other unauthorized uses in a 4-year period.
The Washington Post, which conducted the analysis, reported that 10 of the largest loss disclosures it identified amounted to a combined half-billion dollars between 2008 and 2012.
The report said that although the news media had made some of the diversions public, others have gone unreported. Moreover, it said, nonprofits “routinely omitted” material details from their public filings.
About half of the organizations that depend on public donations and government funds did not disclose the total amount lost, the Post said, suggesting that vastly more has gone missing than has been reported.
It noted that nonprofits are required to report only diversions of more than $250,000, or ones that exceeded 5% of a group’s annual gross receipts or total assets.
As part of its analysis, the Post worked with GuideStar, which gathers and disseminates nonprofits’ federal filings, to create a public, searchable database of nonprofits that have disclosed diversions.
