Close this search box.
Home / Articles / Spotting Charity Scams: How to Give Safely

Spotting Charity Scams: How to Give Safely

May 24, 2024


Local charities depend on the generosity of their communities and in return, our communities often depend on the support of local charities. It’s an ecosystem that results in a win-win situation for all parties; that is, unless the charity you’re supporting is not a charity at all. As fraud is on the rise, it’s important to stay vigilant and ensure that your generosity isn’t abused by a phony organization.

Don’t Be Fooled by Lookalike Branding

Fraud perpetrators employ many tried-and-tested approaches to trick businesses into donating to fake charities. One of the most effective ways that they secure donations is by creating entities that resemble established nonprofits. They use familiar-sounding names and familiar-looking logos. They also make their websites and marketing materials appear like those of the charities they’re impersonating.

These scammers often use their fake branding in emails and on social media platforms. Not only do they hope you’ll donate money, but many also try to lure potential victims into clicking on links that download malware. The fraudsters might use the malware to hack networks, steal data and commit identity theft.

Tried-and-Tested Charity Scams

Other common charity scams:

  • Telemarketing scams. Using readily available technology, scammers can disguise their phone numbers to make it look like they’re calling from legitimate charities. During calls, they use high-pressure tactics that leave little time for would-be supporters to vet their organizations. This approach can be especially effective when a natural disaster occurs and potential donors understand the need to take quick action.
  • Fake endorsements. Some perpetrators use “endorsements” from celebrities, prominent companies and community leaders to lend fake charities an air of legitimacy and encourage you to donate. In most instances, the quoted individuals didn’t actually provide endorsements — or they might have been conned into lending their support. Artificial intelligence increasingly is being used by bad actors to impersonate the voices and appearances of well-known individuals.
  • False invoices. Most businesses receive a lot of invoices, and it may be easy to overlook an invoice for a charitable pledge you never made. To encourage prompt payment, an invoice from a fake charity might include a note referencing a previous conversation in which you or another person in your company approved the donation.

The Real Deal

There are a few simple steps you can take to help ensure your business’s charitable contributions go to real nonprofits. Most states require legitimate charities to register, and your state should have a website that will confirm whether a charity has filed and is in good standing. You can also enter a charity’s tax ID number on the IRS’s website to learn whether the organization is tax-exempt and if donations to it are eligible for deductions. 

Keep in mind that a charity scams could potentially provide you with the tax ID number of a real charity. If you’re suspicious, further investigate the claims of the person soliciting donations. The websites of Charity Navigator, GuideStar and BBB Wise Giving Alliance can provide addresses, phone numbers, key performance metrics, tax and compliance information, and ratings relative to other nonprofits.

To help ensure you’re using best practices to avoid fraud, write and circulate a charitable donation policy. Your policy should describe processes to verify a nonprofit’s legitimacy and authorize donations in your company’s name. And it should specify approved payment methods and include instructions on tracking and reporting all charitable contributions. Also, make sure you educate employees about charitable scams and how to respond to unsolicited calls, texts and emails. If they’re in doubt, employees should feel empowered to ignore and delete messages.

 Philanthropic Due Diligence

Businesses often donate to local charities to show their commitment to helping others. While many charities have important and worthy missions, scammers often prey on the generosity of philanthropic businesses. Implementing a donation policy, thoroughly vetting charities, and educating employees on how to handle unsolicited requests can help ensure that your contributions go to deserving organizations. Don’t hesitate to reach out to a not-for-profit expert with any questions.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.


Related Articles


2 Min Read

The Vital Imperative: Why Businesses Must Undertake Risk Assessments 


2 Min Read

5 Ways Financial Institutions Can Minimize Risk


7 Min Read

Suspicious activity: Are you seeing the big picture?


3 Min Read

Disbursements: Internal Controls in a Remote Environment


4 Min Read

Top 5 Reasons to Use Cloud-based Data Backup


3 Min Read

Using insurance to manage your nonprofit’s risk

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.

  • Hidden
  • This field is for validation purposes and should be left unchanged.