Making It a Little Easier to Investigate Charity Fraud
Making It a Little Easier to Investigate Charity FraudJul 19
Between 2005 and 2016, the number of non-profits in America jumped from around 500,000 to over 1.6 million. Consequently, the number of fraud cases brought against nonprofit has increased as well. There have been a number of scandals in the non-profit field in 2015 and 2016 alone, and they’ve brought to light just how hard it can be to investigate such cases.
The IRS, with which all non-profits have to be registered, is finally helping to make that a little easier by making available digital, or digitized, 990 forms. In so doing, they have made these forms, which are required for non-profits, available for anyone to pursue or to mine for data, in order to find out how many non-profits work on X issue, or have claimed more than Y donations. That will, hypothetically, make it easier for investigators to determine if fraud accusations are truthful.
It’s a process that should have been completed some time ago, a lot closer to when President Obama issued an executive order to make government agencies more transparent. The IRS claimed they didn’t have the resources to do so, but the courts didn’t agree. It’s also not a perfect system. There are still a number of forms missing, from about 40% of groups that didn’t file electronically. Going forward, mandatory electronic filing might be in the works, and would certainly make life easier for investigators. But it’s also not the easiest system to use, and is better suited to broad searches that require a lot of data, than for one person to tack down one organization’s filings.
It’s definitely a step in the right direction. It also brings to light at least one simple thing that non-profits can do to help: file electronically with the IRS. Fraud is bad news for the whole field, so it’s in every non-profit’s interest to make rooting out charity fraud easier.