Scammers are always lurking around acts of kindness, but their activity spikes during the holiday season when generosity is at its peak and emotions are heightened.
Several years ago, authorities dismantled a huge telefunding scam after uncovering that the fraudsters had placed an astonishing 1.3 billion fraudulent donation calls and swindled over $110 million from unsuspecting donors. (Federal Trade Commission)
Meanwhile, researchers at Cornell University revealed that on social media alone, more than 800 fake accounts were running donation scams, directing victims to fraudulent fundraisers on platforms like Facebook, X, and Instagram.
For small businesses, even one wrong move in charitable contributions can lead to serious consequences beyond financial loss—it can tie your brand to fraudulent activity, harm your reputation, and damage trust with clients, partners, and your community.
Learn essential strategies to thoroughly evaluate fundraisers, identify warning signals, and safeguard your business and goodwill this holiday season.
Essential Steps to Vet a Fundraiser Before Donating
A trustworthy fundraiser will provide clear answers to these key questions:
- Who is organizing the fundraiser, and what is their connection to the cause?
- How will the donated funds be used specifically, and what is the timeline for their utilization?
- Who manages the withdrawal process, and is there a transparent path ensuring funds reach the intended recipients?
- Do close relatives or friends of the beneficiary publicly endorse the campaign?
If answers seem unclear or incomplete, request clarification immediately. Lack of transparency or evasiveness should raise alarm.
Warning Signs That May Indicate Fraudulent Fundraisers
Be cautious and investigate further if you notice any of these red flags:
- False or misleading information presented on the fundraising page.
- Funds not being applied to the stated cause within a reasonable timeframe.
- Impersonation of someone else or copying another person’s story.
- Fundraising stories that appear overly perfect or exploit emotional manipulation.
If multiple warning signs accumulate, avoid donating and report the fundraiser promptly.
How to Vet Established Charities (Beyond Crowdfunding)
Even well-known charities may sometimes have questionable operations. Watch for:
- Transparent program details, clear financial disclosures, and current annual reports.
- Explicit breakdowns showing what percentage of donations go to programs versus overhead.
- Search results linking the charity to terms like “fraud,” “scam,” or “complaints”.
Missing information or negative feedback should prompt heightened scrutiny.
Common Tricks Employed by Charity Scammers
Be vigilant for these tactics:
- Requests to donate via gift cards, wire transfers, or cryptocurrency—legitimate charities typically accept credit cards or checks.
- Websites lacking https in the URL, signaling insecure data protection.
- Pressure to make an immediate donation—urgency is often used to block rational thinking.
- Claims that you’ve already pledged or contributed when you don’t recall doing so—always verify before sending money.
Scammers can be highly sophisticated. Even professional-looking sites and compelling headlines may disguise their malicious intent.
Why Protecting Your Business Matters
Corporate giving, whether publicized or private, reflects on your brand’s identity. A donation that inadvertently supports a scam—or even an employee giving under your company name—can entangle your business in fraud, causing lasting reputational damage.
Furthermore, the deceptive techniques used in charity fraud—such as urgent requests, impersonations, and fake websites—mirror other business-targeted scams like phishing, invoice fraud, and wire transfer schemes. Training your staff to recognize fraudulent fundraisers also equips them to identify broader cyber threats.
Proven Strategies to Safeguard Your Business and Generosity
Ensure your charitable giving is secure and effective with these actions:
- Establish a Corporate Donation Policy: Set guidelines detailing where and how donations should be made, including approval processes.
- Educate Employees: Train your team to identify fraudulent fundraisers and encourage verification before donating under your company name.
- Utilize Trusted Channels: Always donate through official charity websites rather than clicking on random email or social media links.
- Ensure Transparency: If your business publicly announces donations, verify the credibility of supported charities.
- Monitor Donations: Follow up to confirm donations are used as intended, many charities provide impact reports.
Make Your Holiday Giving Generous and Secure
The holiday season is an opportunity to give back without exposing your business to risk. Smart verification and clear policies protect your donations and your business reputation.
Want your team to master recognizing scams swiftly—whether fake fundraisers, phishing emails, or fraudulent payments?
Contact us at 408-335-0353 or click here to schedule your complimentary Discovery Call today.
Because the most valuable gift for your business & community is unshakable trust.
Frequently Asked Questions
What should I look for to determine if a fundraiser is legitimate?
To assess a fundraiser’s legitimacy, check who is organizing it and their connection to the cause. Look for transparency regarding how donations will be used and who manages the funds. If details are unclear or evasive responses are given, it’s a sign to be cautious.
How can I protect my business from being linked to fraudulent fundraisers?
To protect your business, ensure that any charitable contributions are thoroughly vetted. Research the fundraising organization, verify their legitimacy, and be wary of any red flags, such as misleading information or a lack of financial transparency. Engaging with trusted organizations can also mitigate risks.
What are the common signs of a charity scam during the holiday season?
Common signs of charity scams include requests for donations through unconventional methods like gift cards or cryptocurrency, as well as overly perfect fundraising stories that exploit emotions. Additionally, if a charity lacks clear financial disclosures or has negative feedback online, it’s best to approach with caution.
How can One82 help me navigate holiday scams and ensure safe donations?
One82 offers guidance on identifying potential scams and provides tools for businesses to evaluate fundraisers during the holiday season. By implementing best practices for vetting charities and staying informed about common fraudulent tactics, you can safeguard your donations and maintain your brand’s reputation.
