More than a thousand U.S. nonprofit organizations acknowledged in public documents filed between 2008 and 2012 that theft, investment fraud, embezzlement, or other unauthorized uses of funds had resulted in a diversion of their assets, the Washington Post reports.

An analysis by the Post and GuideStar of organizations that checked a box on their Form 990 indicating they had discovered a "significant diversion" of funds found that just ten of the largest disclosures involved combined losses potentially totaling more than half a billion dollars. The question about diversions was phased in by the IRS over three years starting in 2008 and appears only on federal disclosure forms submitted by larger nonprofits; private foundations and smaller groups submit alternative forms or none at all.

The Post also found that nonprofits routinely omitted important details from their public filings, even though federal disclosure instructions direct them to explain the circumstances of such diversions. Moreover, organizations are only required to report diversions of more than $250,000, or those that exceed 5 percent of an organization's annual gross receipts or total assets, which suggests that many more incidents involving smaller amounts likely go unreported.

While investment fraud such as Bernard L. Madoff's Ponzi scheme was blamed for some of the largest diversions or losses — including $106 million at Yeshiva University and its affiliates, $26 million at New York University, and nearly $7 million at the Alliance for Excellent Education — many cases involved embezzlement by employees. The American Legacy Foundation, for example, suffered an estimated $3.4 million loss linked to phantom purchases of computer equipment but waited nearly three years before calling in investigators. Youth Service America reported that it discovered a diversion in 2009 of about $2 million that had been "misappropriated" by a former employee; Columbia University disclosed in 2011 that it had been defrauded of $5.2 million in "electronic payments," an incident in which a former accounting clerk and three associates were later convicted of redirecting $5.7 million meant for a hospital; and the Louisville-based Woodcock Foundation disclosed that alleged fraud by a former chairman drained more than $1 million from its accounts, leaving the charity with assets totaling just $8.

According to the Post, a 2012 study by security firm Marquet International concluded that nonprofits and religious organizations accounted for one-sixth of major embezzlements in the U.S., second only to the financial-services industry. Christopher T. Marquet, who heads the firm, told the Post that oversight at nonprofits is often inadequate and that supervisors are too trusting. "The control structures in these organizations are much weaker," said Marquet.

"It's sadder when it happens to a nonprofit," said the Rev. Raymond Moreland of the Maryland Bible Society of Baltimore, which was victimized by a former secretary who falsified checks and misused credit cards to steal $86,000 from the organization, then concocted a series of fake audit reports to cover her trail. "You go out of your way to trust a nonprofit. People give their money and expect integrity," said Moreland. "And when the integrity goes out the window, it just hurts everybody. It hurts the community, it hurts the organization, everything. It's just tragic."

As part of the project, the Post has created a searchable public database of nonprofits that have disclosed diversions.