Holiday Scams In Disguise: What To Watch Out For When Donating Online

Scammers are always on the lookout to exploit generosity, especially during the holiday season when giving spikes and emotions run high.

In a striking example, authorities recently dismantled a massive telefunding scam that made 1.3 billion fraudulent donation calls, defrauding donors of more than $110 million. (Federal Trade Commission)

Similarly, Cornell University researchers uncovered over 800 social media accounts running donation scams across platforms like Facebook, X, and Instagram, steering victims to counterfeit fundraisers.

For small businesses, a single mistake in charitable donations can lead not only to financial loss but also can link your brand to fraudulent activity, seriously harming your reputation and trust within your community, clients, and partners.

Learn how to thoroughly vet fundraisers, recognize warning signs, and protect both your business and your good intentions this holiday season.

Essential Steps to Vet Fundraisers Before Donating

Every authentic fundraiser should provide clear answers to these questions:

• Who is behind the campaign and what is their relationship to the beneficiary?
• How will the funds be allocated, and what is the timeline for use?
• Who manages the withdrawals, and is there a transparent process ensuring money reaches its intended destination?
• Do close family or friends publicly endorse the fundraiser?

If any details seem unclear or missing, request clarification. Avoid any fundraiser that responds with silence or vague answers—these are major red flags.

Spotting Red Flags That Signal Scam Fundraisers

Be cautious and investigate if you notice any of the following:

• False or misleading information presented on the fundraiser page.
• Funds not being utilized promptly or as promised.
• Campaigns impersonating individuals or recycling others' stories.
• Stories that appear overly perfect or use emotional manipulation.

When multiple warning signs appear, report the fundraiser and refrain from donating.

How to Vet Established Charities Beyond Crowdfunding

Even reputable charities may sometimes have questionable practices. Look for these indicators:

• Detailed program descriptions, clear financial reports, and annual statements.
• Transparent breakdown of how much donation money goes directly to programs versus administrative costs.
• Search results with terms like "fraud," "scam," or "complaints" linked to the charity's name.

Absence of transparency or negative reviews should prompt caution.

Common Scam Techniques Used by Charity Fraudsters

Beware of these tactics:

• Requests to donate via gift cards, wire transfers, or cryptocurrency—legitimate charities typically accept credit cards or checks.
• Websites lacking https (no "s" in the URL) indicating unsecure data transmission.
• High-pressure tactics urging you to donate immediately to prevent rational consideration.
• Claims you have already pledged when you don't recall—always double-check before finalizing any donation.

Even polished websites and professional-sounding appeals can cloak deceitful intentions.

Why Vigilance Matters for Your Business

Your business's charitable giving, whether public or private, becomes a part of its identity. A donation to a scam—or an employee donating on behalf of your company without proper checks—can entangle your brand in fraudulent controversies.

Moreover, the fraud tactics common in charity scams—like impersonation, urgency, and fake websites—also target businesses in phishing, invoice fraud, and wire transfer scams. Educating your team to identify fake fundraisers equips them to detect a broad spectrum of fraud.

Practical Steps to Shield Your Business and Its Reputation

Follow these best practices to ensure your charitable efforts are secure and effective:

1. Create a Clear Donation Policy: Establish rules on where and how your company donates and set approval limits.
2. Train Employees: Inform your team about fake fundraisers and encourage verification before donating under your brand.
3. Use Trusted Donation Platforms: Always donate through official charity websites rather than email or social media links.
4. Practice Transparency: If your business announces donations publicly, verify the legitimacy of the charities you support.
5. Monitor Donations: Follow up to confirm funds are used as promised—many charities publish impact reports.

Keep Your Holiday Giving Generous and Secure

The holidays provide a great opportunity to give back; smart precautions ensure your generosity never becomes a source of regret. Protect your funds and your reputation with diligent checks and solid policies.

Need help training your team to detect scams—whether they're fake fundraisers, phishing emails, or fraudulent payment requests?

Call us at 833-863-2120 or click here to schedule your free Consult today.

Because the most valuable gift you can offer your business and community is trust that cannot be compromised.