New Evidence Suggests Many Nonprofits Have Internal Theft Issues

Internal Theft and EmbezzlementWhen we hear the phrase ‘internal theft’—instances of employees stealing from a company, and committing other forms of embezzlement—we often think of big corporations, and for-profit businesses. A huge company that’s somewhat disconnected from its employees may seem more likely to face internal theft issues than a small nonprofit organization, for example.

But new evidence suggests that nonprofits can be just as vulnerable to internal theft as their for-profit counterparts.

According to a recent report in The Boston Globe, the nonprofit sector is far from immune to the systematic issues that contribute to internal theft. In fact, it’s a far more common phenomenon than you might think. The article cites a number of cases involving COOs, bookkeepers and entry-level employees who stole from their respective businesses, and the ripple effects that these crimes had throughout the organizations.

In one case, the COO at a regional organization devoted to fighting homelessness embezzled more than $100,000 over the course of 18 months. According to the organization’s director, this money “could have prevented 100 families from going homeless.”

According to data from the Internal Revenue Service, more than 1,100 tax-exempt organizations have reported cases of theft or embezzlement in the past seven years. In reality, the incidence of these types of crimes is probably even higher, since most cases of fraud go undetected or unreported to the IRS.

Every business, whether it’s a for-profit or non-profit entity, needs to know this: internal theft can happen to you.

That’s why it’s incredibly important to protect your organization both internally and externally, with the best business intelligence consulting, due diligence, and investigative services you can find. At Intelex, we have the tools and experience to identify cases of embezzlement that might otherwise go unnoticed. Give us a call or contact us online today to learn more.