Behind The Post’s analysis of nonprofits’ losses.

October 26, 2013

Read about how nonprofits lost millions with little explanation and the story of one rowing club that experienced embezzlement.

The Washington Post’s investigation relied on the Form 990 financial disclosures that many nonprofit organizations file with the federal government.

In 2008, officials extensively revamped the forms and quietly added a question: Had there been a “significant diversion” of the organization’s assets? The Post identified some nonprofits that responded “yes,” then asked GuideStar — a transparency organization that has digitally processed the reports — to help search for others.

The Post analyzed reports filed by more than 1,000 organizations, reviewed related records and conducted hundreds of interviews.

The final list represents a fraction of all losses. The question was phased in, so not all larger public charities faced the question every year. Private foundations and smaller nonprofits file forms that do not ask about diversions. And many groups, including religious congregations, are not required to file at all.

Nonprofits report millions missing with little explanation

Nonprofits in some cases said that part or all of their losses had been recovered through restitution or insurance. Some others said they had mistakenly checked the box.

The Post’s study identified more than 1,000 organizations that have disclosed a significant diversion since 2008.

Some diversions already had come to public attention. For others, The Post found no evidence they had been publicly disclosed elsewhere.

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