Even in good times, scammers circle around generosity. But during the holidays, when giving increases and emotions run high, they truly pounce.
A few years ago, a massive telefunding fraud was shut down after authorities discovered that the perpetrators had made 1.3 billion deceptive donation calls and collected over $110 million from unsuspecting donors. (Federal Trade Commission)
At the same time, academic researchers from Cornell University found that on social media alone, more than 800 accounts operated donation scams, pushing victims toward fake fundraisers over platforms like Facebook, X and Instagram.
For a small business, one misstep in charitable giving can do more than lose money – it can connect your name to fraud, damage your reputation and erode trust with clients, partners and your community.
Here’s how to vet fundraisers, spot red flags and keep your business (and goodwill) safe this season.
How To Vet A Fundraiser Before You Donate
A legitimate fundraiser should answer these clearly:
- Who is organizing this, and what’s their connection to the recipient?
- How exactly will the funds be used, and over what timeline?
- Who is controlling withdrawals? Is there a clear path for funds to reach their target?
- Do close contacts of the recipient (family, friends) publicly support the campaign?
If any of those are vague or missing, ask for clarification first. Silence or evasive answers is a red flag.
Red Flags That Often Signal Scams
If you see any of these, pause and investigate:
- Misleading or patently false information on the fundraiser page
- Funds not being used for the stated purpose in a reasonable time frame
- Impersonation of another person or copying someone else’s story
- Stories that seem too perfect or emotionally manipulative
When you spot multiple warning signs, report the fundraiser and don’t donate.
Vetting Charities (Not Just Crowdfunds)
Even established charities can have sketchy practices. Here’s what to look for:
- Transparent program descriptions, financial breakdowns and annual reports
- Clear information about how much of a donation goes to programs vs. overhead
- Charity names that appear in searches with words like “fraud,” “scam” or “complaints”
A lack of detail or negative reviews should spark caution.
Common Tactics Charity Scammers Use
Watch out for:
- Demands to donate via gift cards, wire transfers or crypto – legitimate charities accept credit cards or checks.
- Websites missing https (look for the “s”) – that means insecure data transmission.
- Pressure to donate right away – urgency is a trick to stop you from thinking.
- Claims you already pledged or gave without remembering – always double-check before you pay.
Scammers are clever. Even polished websites and thoughtful-sounding headlines may hide malicious intent.
Why This Is Important For Your Business
When your business gives to charity – publicly or privately – that generosity becomes part of your brand. A donation to a scam, or even an employee giving through your company name, can drag your brand into a fraud story.
Worse: The same tactics fraudsters use in charity scams – urgency, impersonation, phony websites – are also used to target businesses. That overlaps with phishing, invoice fraud and wire transfer scams. Teaching your team to spot fake fundraisers is training them to spot fraudulent tactics across the board.
How To Protect Your Business (And Your Goodwill)
These steps help ensure your giving is safe and smart:
- Donation Policy For Your Business: Define how and where the company will donate, and put approval thresholds in place.
- Employee Awareness: Educate your team on fake fundraisers, urging them to double-check and verify before donating under your company name.
- Use Trusted Channels: Donate via charity websites, not through random links in e-mails or social media.
- Transparency: If your business publicizes that it donates, it’s worth verifying the charity you publicly support.
- Ongoing Monitoring: After donating, check that funds are used as promised (many charities publish impact reports).
Keep Your Holidays Generous – Not Risky
The holidays are a chance to give back, not a season for regret. Smart checks and policies protect your money and your reputation.
Want to make sure your team knows how to spot these scams – whether it’s a fake fundraiser, a phishing e-mail or a bogus payment request?
Book your free discovery call here
Because the best gift you can give your business (and your community) is trust that cannot be taken.
