How do Nonprofit Organizations Deal with Fraud?

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Nonprofit organization, all too often take a common approach of foregoing legal action against fraudsters rather than prosecuting them. This article covers a recent fraud and explains why many nonprofits bypass legal action in exchange for cash.

Questions:
1. Summarize the case of fraud at the Progressive Policy Institute and include red flags of fraud in your summary.
2. Why don’t more nonprofits prosecute fraud?
3. What are the benefits and risks of this approach?

money_ball

Source:
Stephens, J. and M.P. Flaherty. (2013) Nonprofit Groups Often Seek Restitution, Not Prosecution When Money Goes Missing. The Washington Post, Nov. 23 (Retrievable online at http://www.washingtonpost.com/investigations/nonprofit-groups-often-seek-restitution-not-prosecution-when-money-goes-missing/2013/11/23/d7b7ba18-51f8-11e3-9e2c-e1d01116fd98_story.html?tid=pm_pop)