The Schism was the altercation, disagreement, or confrontation that divided the noble organisation of V.F.D. into two sides, the Fire-fighting side and the Fire-starting side. One of the sides consisted of people (known as "volunteers") trying to be noble and uphold the V.F.D. tradition of putting out fires, both literally and figuratively. The other side "turned to much less noble schemes", including starting fires (and were known as "villains").
It is unknown who caused the schism directly or indirectly. While the incident is referred to by many characters, no one, even those who could shed some light on the origin of it bothers to expound upon it at all. Even when the Baudelaires find out about the occurrence and begin asking questions, no one seems to be providing any answers at all. Kit Snicket specified that she was four at the time that the schism happened, but the book does not indicate directly how old she is in relation to her brother Lemony Snicket, who was in training to be a V.F.D. member when he was eleven - this fact is listed in The Beatrice Letters when Lemony first corresponds with Beatrice Baudelaire as a child.
- Count Olaf acting in a very greedy manner.
- Beatrice stealing the sugar bowl.
- The murder of Count Olaf's parents.
The schism brought serious consequences on not only the organization, but perhaps to the unsuspecting world.
- Safe places became dangerous.
- Both sides use the same code.
- The V.F.D. eye insignia, which was known for its noble ideas, is now known for being related with crime and suspicion. It could also lead noble volunteers into the arms of villains who use they sign.
It has also been said by Dewey Denouement that the schism grows worse with each passing generation.