nonprofit activity nationwide, according to Linda Jacobs, CEO of the North Bay- based Center for Volunteer & Nonprofit Leadership (CVNL). “Nonprofits are among the most regulated types of organizations in the U.S., subject to Internal Revenue Service oversight, annual financial reporting, public disclosure requirements and state-level review. The vast majority operate with high integrity and transparency.” Still, Jacobs adds, nonprofits can face certain vulnerabilities when it comes to fraud and embezzlement, often due to limited staff capacity, a culture of trust, and the need to prioritize mission-related work over administrative infrastructure. “As an organization that supports and strengthens nonprofits across the North Bay, CVNL emphasizes the importance of strong internal controls, board oversight and clear policies to reduce these risks.” The Center for Volunteer & Nonprofit Leadership provides training and consulting on financial oversight, nonprofit board governance and risk management. “While we do not currently offer a workshop dedicated solely to fraud and embezzlement prevention, these topics are addressed in our governance sessions and in some of our
A 2024 ACFE report shows that nonprofits made up 10% of occupational fraud cases nationwide, with a median loss of roughly $76,000.
other programs,” says Jacobs. What CVNL is seeing far more frequently is an increase in cybersecurity threats and online attacks, says Katelyn Willoughby, its marketing and communications director. “These incidents highlight how vulnerable nonprofits can be when operating with limited IT budgets, small teams and aging or under-resourced systems.” Because of this, she says, digital security has become a growing focus in CVNL’s internal operations and in the conversations it has with the nonprofits it supports. “Strengthening cybersecurity is no longer just an IT issue—it’s a communications, operational and organizational-resilience issue for the entire sector.”
organization can decide if they want to go to the district attorney to press charges. But it’s never as simple as, ‘Hey, this person stole from us’ and then the police show up at that person’s door.” If you’re a business owner and very cautious, nobody has access to assets such as a checking account besides yourself and perhaps a spouse, says Reese in describing his own situation. “In a nonprofit there can be the person who balances the accounts and has access, but is that the same person who is also writing the checks? In some cases, embezzlement is the result of unfortunate management.
But I’ve seen some small nonprofits with internal controls and structures that are very protective.”
Educating the boards For attorney Reese, it’s vitally important
for the boards of directors of nonprofits to perform their role as if they were
Cybersecurity concerns While isolated incidents
running a corporation. “They must approach it that way, and not only because they are
of financial fraud do occur, they represent a very small fraction of
passionate about the cause they are
Linda Jacobs, CEO of the North Bay-based Center for Volunteer & Nonprofit Leadership.
Katelyn Willoughby, marketing and communications director for CVNL.
34 NorthBaybiz
January 2026
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