The season of goodwill …let’s stay vigilant to fraud in the charity sector

December 15, 2015 2:38 pm
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The season of goodwill is upon us and this is the time when fraudsters will begin to rub their hands together thinking: this is exactly how we will all behave…with 100% unwavering goodwill.

Charity Fraud InvestigationIt’s so simple, the fraudsters just prey on our emotions. Whether it is a natural disaster as we saw in Cumbria recently or the awful Paris attacks,hey will use any unfortunate event they can to target us.  You may find that you received texts, emails, calls or social media messages preying on your goodwill, pulling at heart strings.  The email may look like it has come from a reputable charity that you supported last year; however this quite possibly may not be the case and you could become a victim to a phishing scam.

Always be on your guard.

We are naturally trusting and certainly where disaster entails it wouldn’t cross OUR minds to make gain from it. Unfortunately, others are not so charitable.  Some of the organisations that run these so called “campaigns” give very little of what you contribute to the actual cause itself so the whole exercise is tantamount to extortion.

Here are some tips by Action Fraud to ensure you are less likely to become a victim of charity extortion

How much fraud is out there?

ACFEhas published an The Financial Cost of Fraud 2015, which estimates the cost of fraud to the UK by sector. the ACFE estimated that fraud cost the UK £98.6 billion per year and of this, £1.65 billion was the estimated loss to the charity sector. While this is a sobering figure, the estimated percentage of charity turnover lost to fraud (1.7% of a £64.6 billion combined annual turnover) is broadly comparable to the private and public sectors

What can you do about it?

Fraud comes in many different guises; internal and external.  There are many ways in which fraud can be carried out.  Be it false invoices submitted into a charity or an opportunist staff member who has full autonomy over an accounting process meaning their work goes unchecked.

  • If you are a trustee ensure you have implemented best practice.
  • If you have a staff member with full autonomy over a monetary process giving access to opportunity then incorporate spot checks periodically.
  • Have a whistleblowing policy to encourage honesty within the workplace this will not only safeguard the organisation but other members of staff too.
  • Implement systems and processes which will detect early warning signs of fraud.

Unfortunately fraudster’s methods are constantly evolving due to the higher increase in people utilising technology and the internet.  Charities rely on public confidence so if you have concerns about fraud within your organisation or feel that there are inadequate measures in place then take action now.  The very nature of fraud means that it can be difficult to spot therefore you should go through the fraud advisory panel – An introduction to fraud indicators gives a good overview of what you should be looking out for.

Whether it is on a personal level or in a professional capacity be proactive and keep an eye out for the ‘red flags’.

Safe donating this Christmas.

Let’s ensure that our goodwill goes to those its intended!

About Author

Zoe Dronfield of ABM has extensive Business Development experience. Having previously worked with a number of IT organisations specialising in criminal background screening, identity verification and document checking Zoe increased business revenue streams and secured national contracts. She specialises in Local Authority, Central Government and NHS procurement and is working to improve Government procurement processes around Fraud prevention and reducing costs.

Her experience also includes running her own Childcare Domiciliary care agency which worked as an Umbrella Body for the Criminal Records Bureau and held Local Authority contracts supporting Social Care Departments, held National contracts with children’s charities providing their mobile childcare requirements and a number of nationwide childcare contracts with Hotel Groups.

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