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

Scammers lurk around generosity all year, but the holiday season—with its surge in giving and heightened emotions—is when they're most aggressive.

Consider a few years back, when a massive telefunding scam was uncovered by authorities. The fraudsters made an astonishing 1.3 billion fraudulent donation calls, pocketing more than $110 million from trusting donors. (Federal Trade Commission)

Meanwhile, Cornell University researchers discovered that over 800 social media accounts ran donation scams, directing victims to fake fundraisers on platforms like Facebook, X, and Instagram.

For small businesses, a single error in charitable donations can do more than result in financial loss—it can link your brand to fraudulent activity, damage your reputation, and erode trust with clients, partners, and your community.

Here's a comprehensive guide to vet fundraisers, identify warning signs, and safeguard your business and goodwill this holiday season.

Effective Ways to Verify a Fundraiser Before Donating

Any legitimate fundraiser should be able to clearly answer:

• Who is behind this fundraiser, and what is their relationship to the cause?
• How exactly will the donations be allocated, and within what timeframe?
• Who controls the disbursement of funds? Is there a transparent process ensuring funds reach the intended recipients?
• Are close associates of the beneficiary (family, friends) publicly endorsing the campaign?

If any answers seem unclear or incomplete, request further explanation. Lack of transparency or evasive responses are major red flags.

Warning Signs That Indicate Donation Scams

Halt and investigate if you notice any of the following:

• False or misleading content on the fundraiser's page.
• Funds not used as promised within a reasonable period.
• Impersonation of individuals or replication of someone else's story.
• Stories that feel too perfect or overly manipulative emotionally.

If you spot multiple warning signs, report the fundraiser and refrain from donating.

How to Vet Charities Beyond Crowdfunding Campaigns

Even well-known charities can sometimes have questionable practices. Here's what to scrutinize:

• Detailed program descriptions, full financial reports, and annual summaries.
• Clear breakdowns of how much of your donation supports programs versus administrative costs.
• Perform search checks for the charity's name alongside terms like "fraud," "scam," or "complaints."

Insufficient information or negative feedback are strong reasons to proceed with caution.

Common Tricks Used by Charity Scammers

Be vigilant about:

• Requests for payment via gift cards, wire transfers, or cryptocurrency—legitimate charities generally accept credit cards or checks.
• Websites lacking "https" in their URL, which indicates insecure data transmission.
• Urgent pressure to donate immediately — a tactic designed to stop you from thinking carefully.
• Claims that you've already pledged or donated without your recall—always verify before giving.

Fraudsters are sophisticated; even sleek websites and convincing stories can mask malicious intent.

Why This Matters For Your Business

Your company's charitable acts—whether public or private—form a critical part of your brand identity. A gift channeled into a scam, or an employee donating under your business name, can inadvertently entangle your brand in fraudulent schemes.

Moreover, the deceptive techniques used in charity scams—urgency, impersonation, fake websites—are also common in widespread business fraud such as phishing, invoice fraud, and wire transfer scams. Training your team to identify fraudulent fundraisers equips them to recognize and prevent broader scams.

Steps to Safeguard Your Business and Reputation

Follow these best practices to ensure your donations are secure and impactful:

1. Create a Donation Policy: Outline where and how your company donates, and establish approval processes.
2. Educate Your Team: Inform employees about fake fundraisers and encourage them to verify before donating under your company's name.
3. Donate Only Through Trusted Sources: Use official charity websites, not unknown email or social media links.
4. Maintain Transparency: If your business announces charitable contributions, confirm the legitimacy of the recipient charities.
5. Monitor Donations: After giving, verify that funds are utilized as promised, often through published impact reports.

Celebrate Safety and Generosity This Holiday Season

The holidays offer an incredible opportunity to give back—not a time for costly mistakes. Smart checks and company policies protect both your finances and your reputation.

Want to ensure your team is equipped to recognize scams—whether fake fundraisers, phishing emails, or fraudulent payment requests?

Call us at 323-410-7785 or click here to schedule your free 10-Minute Discovery Call today.

Remember, the most valuable gift to your business and community is unshakable trust.