Sep 27, 2023
As reported in an article that appeared in the StarTribune in Minnesota (Smith, Kelly, Police Investigating Stolen $1 Million, 08/08/23), $1 million was allegedly stolen from the Margaret A. Cargill Foundation by diverting funds that were intended for one of its grantees. These funds were going to serve as the first payment of a $2 million grant awarded to an Alaska-based charity. As the charity never received the money, the Eden Prairie Minnesota police found that someone gained access to the email and login of an employee at the Alaska charity and was able to change the bank account number being used for the grant distribution.
The lesson here is that internal controls are an essential part of security, especially for more vulnerable smaller charities. Multi-factor authentication for logins would have made it more difficult for scammers to enter a group’s online system if by some means a scammer was able to get an employee’s login information. In addition, this spotlights the importance for charities to have an audited financial statement as it can sometimes help identify other deficiencies in operations such as invoice fraud, payroll theft, and expenditure abuse.
Private foundations also have a role in tightening security of significant grant distributions by calling the grantee and verifying bank account information before funds are wired or transferred. Of course, victims of such criminal efforts shouldn’t be blamed for such offensive acts. Rather, these instances, when shared publicly, help alert others to avoid being caught by the same deceptions.
Charities also might consider additional security training for employees on how to better spot suspicious emails, to avoid links from unknown sources, and to be mindful of the possibility that messages might even pose as known employees in order to access personal information and/or request unusual payments.
This week’s Heart of Giving Podcast features BBB Wise Giving Alliance President & CEO, Art Taylor, sharing basic giving tips to help donors make wise giving decisions.
We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:
Finally, remember to let us know by going to give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.
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BBB Wise Giving Alliance provides charity reports, which help donors review charities and find a trustworthy charity to support. We also conduct charity assessments to help charities improve their practices and demonstrate trust.
BBB Wise Giving Alliance provides charity reports, which help donors review charities and find a trustworthy charity to support. We also conduct charity assessments to help charities improve their practices and demonstrate trust.
