Act Immediately — Time Is Critical
If you have just discovered that your non-profit has been victimized by a fraud scheme — whether through an unauthorized wire transfer, payment of upfront fees to a scammer, compromise of your financial accounts, or any other financial loss — the next few hours are critical. Financial institutions can sometimes recall wire transfers or freeze unauthorized transactions if contacted quickly enough, but this window is typically 24 to 72 hours at most, and often much shorter for international transfers. Do not spend time trying to determine exactly how the fraud happened before taking action. Contact your bank immediately, explain that you have been victimized by fraud, and ask them to initiate a recall or freeze on any transactions connected to the fraudulent activity. Document everything from this moment forward: write down every call you make, every person you speak with, every email you send, and every response you receive.
Report to Authorities
File a formal fraud report with the appropriate authorities in your jurisdiction. In the United States, report to the FBI's Internet Crime Complaint Center (IC3) at ic3.gov, to the Federal Trade Commission (FTC) at reportfraud.ftc.gov, and to your state attorney general's consumer protection office. If the fraud involved impersonation of a specific organization, contact that organization directly — foundations and government agencies actively want to know when their identity is being misused, and they maintain relationships with law enforcement that can support faster action. In the UK, report to Action Fraud at actionfraud.police.uk. In other countries, contact your national police cybercrime unit and financial crimes authority. Even if law enforcement cannot recover your funds, your report contributes to the intelligence database that helps authorities identify patterns, build cases, and eventually prosecute fraud operations.
Internal Communication and Board Notification
Your board of directors has a fiduciary duty to know about significant financial losses or risks affecting the organization. Notify your board chair immediately after taking emergency financial protection steps. Prepare a clear, factual briefing covering: what happened, when it was discovered, what financial impact has occurred or is at risk, what immediate steps you've taken, and what additional steps are being planned. Do not minimize or delay this communication out of embarrassment or fear of board reaction — boards that learn about fraud weeks or months after leadership knew about it have grounds to question leadership judgment and transparency, which compounds the original problem significantly. The board will need to be involved in decisions about auditing current financial controls, potential staff accountability reviews, insurance claims, and communication with current funders.
Communicating With Your Funders
If the fraud has affected funds from a current grant — either because grant funds were diverted or because your financial systems were compromised in ways that affect grant compliance — notify your funders proactively. This is a difficult conversation, but funders universally prefer proactive disclosure to discovering problems through an audit or news report. Contact your program officer, explain the situation factually and without minimizing the impact, describe the steps you're taking to recover funds and prevent recurrence, and ask what they need from you to maintain the grant relationship. Many funders have experience with grantees facing fraud incidents and have processes for adjusting grant timelines, modifying budgets, and supporting organizations through recovery. A non-profit that handles a fraud incident with transparency, swift action, and clear remediation planning can often emerge with funder relationships intact and even strengthened.
