Government charity regulators from around the world, including the UK, New Zealand, Australia and the United States, are collaborating this week to bring attention to charity fraud. The International Charity Fraud Awareness Week initiative was started several years ago by the Charities Commission of England and Wales and has since expanded. You can find more information at this fraud awareness website.  U.S. government participants include the Federal Trade Commission and state charity regulators (such as the offices of the state attorney general or secretary of state. The week has been divided into five specific themes:

1. UNDERSTANDING CHARITY FRAUD
Instances of charity fraud are the exception and not the rule, as the vast majority of charities are acting in good faith. But charity fraud happens and can take many shapes, ranging from deceptive appeals to misuse of funds. BBB Wise Giving Alliance believes one of the best ways for donors to avoid problematic circumstances is to make informed giving decisions by seeking additional information. Give.org provides guidance and tips to help accomplish this objective:  https://give.org/for-donors/about-specific-giving-guidance/ Among other things, donors should be alert to potential name confusion for charities with similar sounding names and resist excessive pressure to make an immediate donation.

2. FUNDRAISING FRAUD
Misrepresentations in appeals can take a variety of forms. Two recent examples were reported earlier this year in a Wise Giving Wednesday blog announcing government actions against a police group and a veterans organization. Donors should watch out for overly-emotional solicitations that tug on your heartstrings but say little about what the charity is doing to address the problems it describes so well. Donors should be particularly mindful after a disaster, as bad actors try to take advantage of deep public sympathy for those impacted by tragedies.

3. CYBERSECURITY
When it comes to cybersecurity, charities are just as vulnerable as businesses and need to take measures to reduce risks. One option is to follow the BBB 5-Step Approach which recommends that organizations (1) identify its data assets, (2) protect them, (3) detect incidents, (4) respond with a plan, and (5) recover normal operations. A recent cybersecurity example is a scam known as email compromise fraud which seeks to fool employees into believing they received a message from their boss asking them to make a wire transfer of funds, share tax information on employees or provide some other item of value.

4. INTERNAL (INSIDER) FRAUD
Some of the 20 BBB Standards for Charity Accountability address aspects of potential insider fraud at charities. BBB Charity Standard 1 calls for a charity’s governing board to provide adequate oversight of the charity’s operations and staff. Also, BBB Charity Standard 5 calls for no transaction(s) in which board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. In addition, charity audited financial statements (as featured in BBB Charity Standard 11) provide a helpful third-party verification of the charity’s finances.

5. KEEPING DATA SAFE
In view of increasing public concern about protecting sensitive or personal data, donors should review a charity’s website (or the BBB Charity Report) to ensure that it has a prominent and easily accessible privacy policy that incorporates the items called for in BBB Charity Standard 18:

Notice: What information is being collected by the charity and how will it be uses?
Access: How do you contact the charity to review personal information and, if needed, make corrections?
Choice: How do you inform the charity if you do not wish personal information to be shared outside the organization?
Security: What security measures does the charity have to protect personal information that is received by them?

For more information about the BBB Charity Standards and to access BBB evaluative reports on charities, visit Give.org. Also, remember that 40 of the 50 states in the U.S. require charities to annually register (usually with an office of the attorney general or the secretary of state.) In Canada, check with the Canada Revenue Agency.

Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video interview featuring Amy Palmer, President & CEO, Soldier’s Angels (a BBB Accredited Charity) which provides aid and comfort to the men and women of the United States Army, Marines, Navy, Air Force, Coast Guard, their families, and the growing veteran population. For example, at approximately 30 Department of Veterans Affairs (VA) medical facilities, SA conducts patient visits and provides luncheons/dinners, hygiene kits, box lunches, food distributions, stand down support and computers and other technology devices.

Recent Reports

Americans United for Separation of Church and State
Armed Services YMCA of the USA
Children’s Leukemia Research Association

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.

H. Art Taylor, President and CEO
BBB Wise Giving Alliance