Wednesday, April 10, 2013

Charity Fraud in the Church

by Gary Snyder

Association of Certified Fraud Examiner’s 2012 Report to the Nations.
The information is particularly insightful for church leaders who are focused on minimizing the risks of fraud and embezzlement with church money. It was in Managing Your Church.
ACFE releases its report every other year. Of note from the latest one:
Between January 2010 and December 2011, ACFE tracked 1,388 cases of “occupational fraud” worldwide:

1 .     Of the cases, 10.4 percent occurred within a not-for-profit organization, up from 9.6 percent in 2010, but down from 14.3 percent in 2008;
2.     The median theft involved with the cases was $100,000, up from $90,000 in 2010, but down from $109,000 in 2008;of all the cases, 87 percent involved first-time offenders with no prior criminal records.
3.     These details are interesting because they validate several things we consistently observe in the church world: At least two to four media headlines nationwide each month involving an arrest or prosecution of a bookkeeper, accountant, or pastor suspected of embezzling from their church.
4.     An average theft amount of at least $100,000, and usually between $200,000 and $400,000, all stolen over a period of several years.
5.     A perpetrator who has no prior criminal record. Personal debt, a medical crisis, or the unexpected loss of a spouse’s job creates unexpected pressure, with many rationalizing their acts as “temporary loans” that they intend to repay—but never do.
6.     Or, some believe they are underpaid and are “owed” the additional compensation.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics,, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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