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August 07, 2015

Nonprofit Fraud More Common Than Expected, Says NY Charity Regulator

Though most nonprofits are unlikely to get caught up in fraud schemes, greed among charity executives is "a surprisingly common problem” and infractions like embezzlement may be hiding in plain sight, the chief of the New York attorney general's charities bureau, James Sheehan, tells New York Nonprofit Media.

The problem, Mr. Sheehan says, is “especially common in organizations that have had the same leadership for a long period of time.”

To help prevent fraud, he says, charities should establish safeguards like adopting term limits for board members, keeping track of new regulations governing nonprofits, and making sure audits are thorough and accurate.