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

Scammers are always lurking, especially targeting generosity. This risk intensifies during the holiday season when giving spikes and emotions run high.

Consider a major telefunding scam uncovered a few years ago, where criminals made 1.3 billion fraudulent donation calls and defrauded donors of over $110 million (Federal Trade Commission).

In the same vein, research from Cornell University uncovered over 800 social media accounts executing donation scams via Facebook, X, Instagram, and more, directing victims to fraudulent fundraisers.

For small businesses, even one mistake in charitable giving can lead not only to financial loss but also damage your business reputation, erode customer trust, and harm relationships with partners and your local community.

Learn how to thoroughly vet fundraisers, recognize warning signs, and safeguard both your business and your goodwill this holiday season.

Steps to Verify a Fundraiser Before Contributing

Any reputable fundraiser should provide clear answers to these key questions:

• Who is behind the fundraiser, and what is their connection to those benefiting?
• How will the collected funds be allocated, and in what timeframe?
• Who manages the withdrawal process, and is there a verified path for funds to reach the intended recipients?
• Are close contacts of the beneficiaries (family or friends) publicly endorsing the campaign?

If any details are unclear or omitted, inquire further. Avoid donating if you encounter silence or evasive responses—these are red flags.

Warning Signs That May Indicate a Scam

Be cautious and investigate if you notice any of the following:

• Fundraiser page contains misleading, exaggerated, or false information.
• Funds are not being used promptly or as described.
• Impersonation of individuals or plagiarized stories.
• Appeals that appear too perfect or overly emotional to manipulate donors.

When multiple red flags arise, report the fundraiser and withhold your donation.

How to Vet Charities Beyond Crowdfunding

Even well-known charities can engage in questionable practices. Watch for the following:

• Transparency regarding programs, detailed financial reports, and annual disclosures.
• Clear breakdown of how donations are split between programs and overhead.
• Search results linking the charity's name with terms like "fraud," "scam," or "complaints".

Insufficient details or negative feedback should raise serious concerns.

Common Tricks Used by Charity Scammers

Remain alert for these scammer tactics:

• Requests for donations via gift cards, wire transfers, or cryptocurrency—legitimate charities typically accept credit cards or checks.
• Fundraising websites lacking HTTPS (secure site indicator, the "s" in the URL).
• A sense of pressure to donate immediately, designed to prevent thoughtful decision-making.
• Claims that you have already pledged or donated without your recall—always verify before sending funds.

Beware: even professional-looking websites and sophisticated messaging can mask malicious intent.

Why Charitable Giving Matters for Your Business

Your company's charitable contributions, whether publicized or private, impact your brand image. Unwitting donations to scams, or employee donations under your company's name without proper checks, can link your brand to fraudulent activity.

Moreover, scammers use the same playbook—urgency, impersonation, fake websites—to target businesses directly with phishing attempts, invoice fraud, and wire transfer scams. Training your team on spotting fake fundraisers is an essential defense against these broader threats.

Protecting Your Business and Reputation While Giving

Follow these best practices to ensure your corporate giving is responsible and secure:

1. Create a Clear Donation Policy: Establish guidelines on when, where, and how your company donates, including approval limits.
2. Raise Employee Awareness: Train your team to recognize fraudulent fundraisers and verify authenticity before making donations on behalf of the company.
3. Use Trusted Donation Channels: Always give directly through verified charity websites—avoid random email or social media links.
4. Maintain Transparency: If your business promotes its charitable support, ensure the legitimacy of the organizations you endorse.
5. Monitor Impact Post-Donation: Follow up to confirm that donations are being used as intended. Many charities release detailed outcomes and impact reports.

Enjoy a Generous, Safe Holiday Season

The holidays are a perfect opportunity to give back without the stress of regret. Implementing smart policies and vigilant checks safeguards your contributions and hard-earned reputation.

Need your team trained on identifying scams—whether fake fundraisers, phishing attempts, or fraudulent payment requests?

Contact us at (949) 396-1100 or click here to book your free 15-Minute Discovery Call today.

Because the greatest gift you can give your business and community is enduring trust.