Beware of Fraudulent Donors and Donation Scams

While there is a lot of information and advice online about fraudulent charitable organizations and how donors can spot them, what about charitable organizations being scammed by fraudulent donors?

One of the main scams out there is the Donation Refund Scam.  This is a “fake-check overpayment” scam where an individual sends a communication expressing interest, then sends a 5 or 6-figure donation via overnight mail using a fake check.  The donor then tells the organization there was a mistake and asks for a partial refund.  The scam artist then collects the partial refund while the original check bounces.  The organization is out the refund plus any bank fees for the check that bounced.

This happens with credit cards as well.  A fraudulent donor makes an online donation and then files a chargeback with the credit card company and a refund request from the organization.  The organization could be out the chargeback and the refund.

Although many non-profit organizations are small, with few employees, it is imperative to have good policies and procedures in place when it comes to handling money.  Donor stewardship is important as well.  Your relationships with your donors is one of the keys to a financially strong non-profit organization.  Many times, you are aware of gifts coming in from your donors, especially if they are sizable.  If you receive a large gift from a donor you don’t have a relationship with, be sure to do your due diligence in making sure it is a valid donation!

Charitable organizations do so much for our communities and it’s a shame that scam artists try to take advantage of us.  We all need to remain vigilant and alert to unusual donors and donations!