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

Scammers are always lurking around acts of generosity, but the holiday season brings a spike in their scams as giving rises and emotions run deep.

A striking example: a major telefunding scam was dismantled after authorities revealed over 1.3 billion fraudulent donation calls were made, raking in more than $110 million from innocent donors. (Source: Federal Trade Commission)

Similarly, Cornell University researchers uncovered that on social media platforms alone, upwards of 800 fake accounts ran donation scams, funneling victims toward counterfeit fundraisers on Facebook, X, Instagram, and beyond.

For small businesses, a single mistake in charitable giving can lead to significant financial loss and, more critically, link your business name to fraudulent activity, tarnishing your reputation and undermining trust with customers, partners, and the community.

Here's your essential guide to vetting fundraisers, identifying warning signs, and safeguarding your business's goodwill this holiday season.

Essential Steps to Vet Fundraisers Before You Donate

Authentic fundraisers should offer straightforward answers to questions like:

• Who is coordinating the campaign and how are they connected to those benefiting?
• Exactly how will the donations be allocated and within what timeframe?
• Who manages fund withdrawals, and is there a clear, verifiable path for the funds to reach their intended recipients?
• Are close contacts of the beneficiaries, like family or friends, publicly endorsing the fundraiser?

If any answers are unclear or incomplete, request clarification immediately. Avoid donating if you encounter silence or evasive responses—these are strong red flags.

Common Red Flags That Indicate Charity Scams

Be wary if you notice:

• False or misleading details on the fundraising page.
• Funds not being used for their promised purpose within a reasonable amount of time.
• Impersonation of individuals or plagiarized stories to gain sympathy.
• Emotionally manipulative or overly perfect stories designed to coerce donations.

If several warning signs appear, report the fundraiser promptly and refrain from donating.

How to Effectively Vet Established Charities

Legitimate charities should exhibit transparency and professionalism. Look for:

• Clear program descriptions, detailed financial reports, and accessible annual statements.
• Explicit breakdowns showing how much of your donation supports programs versus administrative costs.
• Search results free from negative labels like "fraud," "scam," or "complaints."

Any lack of detail or negative feedback should raise caution before you proceed.

Beware of Tactics Used by Charity Scammers

Common warning signs include:

• Requests to donate through gift cards, wire transfers, or cryptocurrencies. Reliable charities accept credit cards or checks.
• Websites without HTTPS security (look for the "s" in the URL indicating secure data transmission).
• Pressure to contribute immediately—urgency is a manipulation tactic to bypass careful thinking.
• Claims that you have already donated or pledged when you have no memory of doing so; always verify before making payments.

Scammers can craft convincing websites and compelling stories, so stay vigilant even if things appear professional.

Why Vigilance Matters For Your Business

Your business's charitable contributions—whether public or private—reflect on your brand image. Supporting scams, even unintentionally through employee donations made under your company's name, can embroil your brand in negative fraud stories.

Moreover, the deceptive tactics employed in charity scams—ranging from urgency pressures to identity impersonations—overlap with common business scams like phishing, invoice fraud, and wire transfer scams. Teaching your team to recognize fake fundraisers smartly equips them to detect widespread fraud risks.

Practical Ways to Protect Your Business and Its Reputation

Take the following measures to ensure your company's charitable giving is secure and effective:

1. Create a Formal Donation Policy: Outline donation protocols, specify approved charities, and set authorization thresholds.
2. Educate Your Employees: Train your team to verify fundraisers before donating on behalf of the company.
3. Use Only Verified Donation Channels: Make donations through official charity websites, and avoid random email or social media links.
4. Maintain Transparency: If your business publicizes donations, ensure the charities you support have been thoroughly vetted.
5. Monitor Donations Post-Gift: Follow up to confirm funds are utilized as intended, since many charities publish impact and financial reports.

Make the Holidays a Season of Safe and Meaningful Giving

The holidays offer an opportunity to give generously without regret. Implementing smart safeguards protects both your funds and your business's hard-earned reputation.

Ready to equip your team with the skills to spot fake fundraisers, dodge phishing emails, and avoid fraudulent payment requests?

Call us at 678-940-8992 or click here to book your free 15-Minute Discovery Call today.

The greatest gift you can offer your business and community is the unwavering trust that no scam can shake.