What is Charity Fraud?

Charity fraud is a deliberate act of deception committed by an individual or a group of individuals who solicit donations in the name of a worthy cause. Perpetrators of charity fraud typically use high-pressure methods to convince donors to give. They sometimes take advantage of a tragic event or a sad predicament to appeal to the compassion and empathy of donors. Victims of charity fraud are usually well-intentioned individuals who either fail to, or do not know how to, verify the legitimacy of the so-called charitable organization.

Perpetrators of charity fraud deceive potential donors by devising strategies to gain their confidence and trust. In some cases, the perpetrators identify a group in need of financial assistance, such as military veterans or the victims of natural disasters, and appeal for donations in their name. They attempt to convince potential donors that funds will reach the groups in need. To establish their legitimacy, they might brand themselves with a name that can easily be confused with a reputable charity. These acts are deceptive and illegal, as the money donated is then used for personal financial gain and not delivered to those in need.

Charity fraud is carried out through a variety of means. Perpetrators might call potential donors at home to convince them of their legitimacy and the immediacy of financial need for a disadvantaged population. Some deceptive individuals or groups try to capture the attention of passersby on a street corner by requesting cash for the hungry or disabled. Another strategy occurs through the use of the Web, such as setting up Internet websites and/or soliciting funds through personalized email messages.

The high-pressure methods used to carry out charity fraud include expressing an urgent need for funds and pushing donors into giving immediately. Through the use of careful storytelling and appealing to the compassionate natures of donors, perpetrators create a dynamic whereby a person feels compelled to donate on the spot. Requests are typically for cash, credit card number, or bank information. A donor’s appeal for information validating the legitimacy of the organization is typically addressed in a quick and deflective manner.

Individuals can prevent charity fraud by taking general safety measures when presented with requests to donate. Asking for the name, address, and phone number of the charity is an important step in verifying its legitimacy. Well-established charitable organizations are typically government registered, and a donor should verify this fact before giving money. For safety, documentation, and tax purposes, donations to charitable organizations should be made via check and not in cash.