November 17, 2025
Scammers often prey on generosity, especially during the holiday season when giving is at its peak and emotions run high. Unfortunately, this makes it the perfect time for them to strike.
In one notable case, authorities dismantled a large telefunding scam that made 1.3 billion deceptive donation calls and illegally collected over $110 million from well-meaning donors. (Federal Trade Commission)
Meanwhile, researchers at Cornell University uncovered that over 800 social media accounts were running donation scams, steering users toward fraudulent fundraisers on platforms like Facebook, X, and Instagram.
For small businesses, a single mistake in charitable donations can cost more than money. It can link your brand to fraud, harm your reputation, and erode trust with clients, partners, and your community.
Learn how to thoroughly vet fundraisers, identify warning signs, and protect your business's goodwill throughout the season.
Effective Ways To Vet Fundraisers Before Donating
Legitimate fundraisers should be transparent about the following:
- The identity of the organizers and their direct connection to the beneficiary.
- Detailed explanation of how the funds will be allocated and the timeline.
- Who manages fund withdrawals, ensuring clear and secure delivery to the intended recipients.
- Public support from close contacts of the recipient, such as family and friends.
If any of this information is unclear or missing, ask for clarification immediately. Ignoring or avoiding these questions is a major red flag.
Warning Signs That Indicate Potential Scams
If you encounter these indicators, stop and investigate further:
- False or misleading claims on the fundraiser's page.
- Funds failing to be used for the declared cause within a reasonable period.
- Impersonation or copying of another individual's story.
- Emotionally manipulative or too perfect narratives.
If multiple red flags arise, report the fundraiser and avoid donating.
How To Verify Charitable Organizations (Beyond Crowdfunding)
Even established charities can sometimes exhibit questionable practices. Here's what to scrutinize:
- Clear program descriptions, transparent financial reports, and access to annual reviews.
- Information showing how donations are split between programs and overhead costs.
- Search the charity's name alongside keywords like "fraud," "scam," or "complaints" to spot any concerns.
Missing details or negative feedback should raise caution before committing.
Common Schemes Used By Charity Scammers
Be vigilant for these tactics:
- Requests to donate through gift cards, wire transfers, or cryptocurrency—authentic charities typically accept credit cards or checks.
- Websites lacking https encryption (check for the "s" in the URL), indicating insecure data transfer.
- Pressure tactics insisting you donate immediately to prevent proper consideration.
- Claims that you already pledged or donated when you don't recall doing so—always verify before sending money.
Scammers are sophisticated; even professional-looking sites and well-crafted headlines can mask fraudulent intentions.
Why Protecting Your Business Matters
Your company's charitable giving, whether public or private, shapes your brand identity. Unfortunately, donating to fraudulent causes, or employees donating using your company's name, can entangle your brand in fraud scandals.
Moreover, the tricks used in charity scams—urgency, impersonation, fake websites—overlap with other scams targeting businesses such as phishing, invoice fraud, and wire transfer scams. Training your team to identify fake fundraisers strengthens your entire fraud defense.
Protect Your Business and Its Goodwill With These Steps
Follow these best practices to keep your charitable efforts secure and responsible:
- Establish a Donation Policy: Set clear guidelines about where and how your company donates, including required approvals.
- Educate Employees: Ensure your team recognizes fake fundraisers and double-checks veracity before donating under your business name.
- Use Secure Channels: Always donate through official charity websites, avoiding random email or social media links.
- Maintain Transparency: If your business publicly supports a charity, confirm the organization's legitimacy beforehand.
- Monitor Donations: After giving, verify that funds are used appropriately; many charities release impact reports.
Celebrate a Generous, Safe Holiday Season
The holiday season is about meaningful giving, not regret. Implementing smart vetting and donation policies safeguards your finances and your reputation.
Want your team to confidently spot scams—from fake fundraisers to phishing attempts and fraudulent payment demands?
Contact us today at 214-845-8198 or click here to schedule your free 15-Minute Discovery Call.
Because the greatest gift for your business and community is the trust that cannot be compromised.
