Volunteer Fraud Cases (2026): How Internal Threats & External Fraud Drain Nonprofit Resources

Q: How much does fraud cost nonprofits on average?

The median loss per nonprofit fraud incident is $76,000 to $89,000, with an average loss of $639,000 when outliers are included.

Q: Are volunteers more likely to commit fraud than employees?

Both volunteers and employees commit fraud, but volunteers often occupy low-oversight roles and may serve for years with minimal scrutiny, creating asymmetric risk.

Q: What should we screen for to catch potential fraudsters?

Conduct identity verification, criminal history checks, and reference checks. For roles handling money, include credit checks. For vulnerable populations, add sex offender registry checks.

Q: Can a single background check catch someone planning fraud?

Background checks reveal historical risk, but cannot predict future behavior. Internal controls, segregation of duties, and a culture of accountability are equally critical.

Q: How often should we rescreen volunteers?

Best practice is to rescreen high-risk roles annually or every 2-3 years at minimum. Currently, 42% of nonprofits do not screen all volunteers.

Q: Does fraud insurance protect nonprofits?

Fidelity insurance mitigates financial damage from employee and volunteer theft but is a safety net, not a prevention strategy.

Nonprofits lose $76,000–$89,000 per fraud incident. Learn the latest statistics on volunteer embezzlement, internal fraud schemes, and screening strategies to protect your mission.

Volunteer fraud and embezzlement pose a significant threat to nonprofit organizations, draining resources, eroding donor trust, and undermining the missions these organizations exist to serve. This report synthesizes the latest 2024–2026 data from the Association of Certified Fraud Examiners, law enforcement, and nonprofit risk management experts to reveal the scope, patterns, and financial impact of fraud cases involving volunteers and staff. Whether you're a nonprofit leader, board member, or volunteer coordinator, understanding these trends is critical to protecting your organization—part of our volunteer screening statistics hub.

Methodology & Honesty Note
This report draws exclusively from peer-reviewed studies, government agency data (DOJ, IRS, BLS), and industry benchmarks from the Association of Certified Fraud Examiners (ACFE), which conducts the most authoritative biennial surveys of occupational fraud. All figures are sourced to real reports with publication dates; we omit any statistic we cannot verify to a credible primary source. Fraud statistics remain incomplete—many incidents go undetected or unreported—so these figures represent a floor, not a ceiling.

Key takeaways

10% of all occupational fraud cases occur in nonprofits

$76,000 median loss per nonprofit fraud incident

44% of fraud in small nonprofits is corruption

87% of fraudsters are first-time offenders

The scope of nonprofit fraud in 2024–2026

Internal fraud is a notable risk for nonprofits, with 10 percent of all occupational fraud cases occurring within these organizations, according to the 2024 ACFE Report. That may sound modest, but it belies a deeper problem: nonprofits are significantly overrepresented in fraud caseloads, and the damage to individual organizations is substantial.

The ACFE's 2025 Report to the Nations found the median fraud loss for religious and charitable organizations is $89,000 per incident. A separate recent benchmark shows with a median loss of $76,000, the financial damage can be substantial, but the broader impact on donor trust and organizational reputation may be even more severe. For perspective, the typical organization loses an estimated 5 percent of its annual revenue to fraud.

10%

76K

The scale of nonprofit fraud: a minority of total caseload, but with significant per-incident losses. ACFE 2024 Report to the Nations

High-profile fraud cases: The 2025–2026 landscape

Recent years have surfaced several landmark cases that illustrate both the vulnerability of nonprofits and the scale of potential loss. She was there to testify in defense of her role in a sprawling scheme that defrauded the U.S. government's child nutrition program of $250 million. Since 2022, 70 people have been charged in what the Minnesota U.S. Attorney's Office has declared the largest COVID-related fraud scheme in the country.

a charity called "Providing Hope VA" raised over $9 million in 2023 to provide services to homeless veterans. Instead, the funds became a personal bank account for its president and sole board member, James Arehart. He was sentenced to 21 months in prison and ordered to repay the bilked funds in 2025. These cases reveal how trusted insiders can exploit minimal oversight.

Common fraud schemes in small nonprofits

Fraud patterns differ by organization size and type. For nonprofits with fewer than 100 employees, the most common fraud schemes include corruption (44 percent), billing fraud (31 percent), and check or payment tampering (23 percent).

Corruption 44%

Billing fraud 31%

Check/payment tampering 23%

Skimming 10%

Most common fraud schemes in nonprofits with fewer than 100 employees. PBMares Nonprofit Fraud Risk Analysis (2025)

The median loss in Financial Statement Fraud is $954,000. This scheme, while less common, inflicts the most severe financial damage.

Who commits fraud: The profile of perpetrators

One of the most surprising findings in fraud research is that 87% had not previously been disciplined by an employer for fraud-related issues —meaning most fraudsters have clean employment records. This "good reputation" mask makes detection harder for nonprofit leaders who naturally trust long-time volunteers and employees.

Volunteers and board members represent particular risks. Fraudsters also assume that nonprofit executives are more trusting of their employees and volunteers, especially those of small nonprofits that suffer from higher staff and volunteer turnover and where meager staffing degrades separation of duties and other internal controls.

One notable case illustrates this danger: a grandmotherly volunteer served as treasurer of the rowing club for over a decade with no oversight. She regularly stole contributions that totaled over a quarter million dollars. Recent analysis from 2013 found that a 2013 study of Form 990 reports filed between 2008 and 2012 found that more than 1,000 organizations checked the box that indicated they had lost significant funds ($250,000-plus or 5 percent of gross receipts) to theft, fraud or embezzlement. The losses in the 10 largest of those cases totaled a half billion dollars.

Structural vulnerabilities: Why nonprofits are soft targets

Nonprofits face unique systemic weaknesses. board members and executives who are dedicated and talented in their particular fields may not be well versed in financial issues and internal controls. In addition, nonprofits of all sizes may have only limited resources available to address internal controls. This makes them vulnerable to an employee who could recognize this lack of controls and use it as an opportunity to commit fraud.

nonprofit organizations have the lowest implementation rate of fraud awareness training compared to other organizations in the survey. In addition to lack of resources, some charities may hesitate to train volunteers in fraud prevention, out of gratitude for their contributions.

A critical gap also exists in screening: 42% of organizations are not screening all of their volunteers at all. Of those that do screen, most never rescreen. This means many organizations have no baseline fraud prevention tool in place.

Share of nonprofits screening ALL volunteers (decline 2020–2024). Sterling Volunteers Industry Report (2020); BIB Screening (2024)

Federal enforcement and financial impact

The Department of Justice says it reached more than $6.8 billion in settlements and judgments in 2025 tied to the False Claims Act, the highest on record. This signals increased federal oversight of nonprofits receiving public funds, particularly those involved in government-contracted services like child nutrition programs.

In the United States, nonprofit organization leaders estimate that $40 billion of revenue is lost every year because of financial scandals and fraudulent activities. While this aggregate includes detection delays and reputational costs, it underscores the systemic drain fraud places on the nonprofit sector.

What this means for your volunteer program

The data is clear: nonprofit leaders cannot assume good intentions will prevent fraud. A background check can help confirm an individual's identity, verify their work history, and identify any criminal or civil records that may indicate a history of violence, theft, or fraud. By conducting background checks, nonprofits can minimize their risk of hiring individuals who may pose a threat to the organization, its clients, or the community.

Screening is a foundational control, but it's not a one-time event. volunteers working with the company's finances should undergo credit history checks. And Reference checks involve reaching out to individuals listed by the volunteer as references, such as former colleagues, supervisors, or other contacts. These checks provide valuable insights into the volunteer's work ethic, reliability, and interpersonal skills. They also serve as a means of verifying the information supplied by volunteers and offer a perspective on their character and professional attributes.

VolunteerBadge helps nonprofits implement these safeguards at scale. Our identity verification and FCRA-compliant background check system ($5 per check, no monthly fees) screens both one-time event volunteers and ongoing staff. We integrate seamlessly with your volunteer management workflow via bulk volunteer import, and our platform includes tools for character reference verification to surface the insights that detect fraud before it happens.

Ready to safeguard your nonprofit?

Start screening volunteers today

Learn more: VolunteerBadge for nonprofits | Pricing

Detection and prevention: What works

The good news: many fraud cases are preventable. Whistleblower tips remain the most effective tool, accounting for 43 percent of all fraud detections. Recent trends show a growing reliance on online forms, which surpassed phone and email tips as the preferred reporting method in 2024. Anonymous reporting channels and a strong culture of accountability are cost-effective fraud deterrents.

Nonprofits can reduce rogue embezzlement and theft by requiring multiple levels of approval for transfers and transactions and requiring that certain transactions be accompanied by back-up documentation. Organizations can require that checks over a certain amount be signed by two authorized individuals to increase organizational visibility for spending.

Regular rescreening matters. Organizations should treat volunteer screening as a foundational step-by-step process, not a box to check once, and should align screening practices with relevant legal and compliance frameworks.

Download the data

Access our full dataset of fraud statistics, cases, and source citations:

⬇ Download the data (.xlsx)

Frequently asked questions

Q: How much does fraud cost nonprofits on average?
A: With a median loss of $76,000, the financial damage can be substantial. For religious, charitable, and social service organizations, the median loss rises to $85,000. However, the average loss was $639,000 , meaning a few cases inflate the mean significantly.

Q: Are volunteers more likely to commit fraud than employees?
A: Both commit fraud, but with different patterns. Volunteers often occupy low-oversight roles (treasurers, event coordinators) and may serve for years with minimal scrutiny. The absence of a formal employment relationship sometimes delays discovery. There is no clear prevalence data showing volunteers commit more fraud than staff, but their lack of screening creates asymmetric risk.

Q: What should we screen for to catch potential fraudsters?
A: Start with identity verification and criminal history checks. Because volunteers are typically recruited to work with vulnerable populations, sex offender registry checks should also be included. For roles handling money, poor credit is a red flag. Reference checks and employment history verification add deeper insight into reliability.

Q: Can a single background check catch someone planning fraud?
A: A background check tells you who someone was on the day you ran it. It tells you nothing about who they become the day after. Background checks are necessary but not sufficient. Internal controls, segregation of duties, and a culture of accountability are equally critical.

Q: How often should we rescreen volunteers?
A: 42% of organizations are not screening all of their volunteers at all. Of those that do screen, most never rescreen. Best practice is to rescreen high-risk roles (financial access, vulnerable populations) annually or every 2–3 years at minimum.

Q: Does fraud insurance protect nonprofits?
A: Nonprofits can seek insurance to help mitigate the damage resulting from fraud. Fidelity insurance protects a nonprofit from theft of an organization's property by "covered individuals," who generally include the insured's employees and, in some cases, certain of the organization's volunteers. Fidelity insurance is a safety net, not a prevention strategy.

Sources & references

First published: September 7, 2026

Last updated: September 7, 2026

This report is a living document. We refresh and update it annually as new ACFE reports, DOJ settlements, and nonprofit fraud research become available. Fraud statistics remain incomplete—many cases go unreported or undetected—so these figures represent a lower bound, not the true scope.

Educational information only, not legal or financial advice. Consult with your organization's legal counsel and a forensic accountant to develop fraud prevention and detection strategies tailored to your nonprofit's size, structure, and risk profile.