Avoiding Common Scams for Nonprofit Entities

March 25, 2019 | Article

In our society, as long as money is changing hands, unfortunately someone will be there to try and illegally take it without you knowing. This happens through various means of white collar crime. This is as true in the world of online donations as it is nearly everywhere else. The goal of every nonprofit is to make sure that funds intended for the nonprofit actually go to the nonprofit, but this is easier said than done when it comes to technology today.

To gain charitable donations from new donors, we must give them peace of mind. The donor must feel confident that their personal information is being protected from different types of fraud.

Credit card fraud and social security fraud are just a few of the frauds committed against donors looking to help public charities. It’s important to remember that most people are not just looking for a tax deduction, but they are looking for a way to truly help different types of service organizations.

The best way to represent ourselves and put our donors at ease is by being transparent and vigilant in how we represent ourselves. Today, we have more information available to us than ever before. We can access it through our phones, computers, tablets, televisions and even our refrigerators (for those staying on the cutting edge of technology).

In order to confront the idea that your nonprofit is coming across as anything but legitimate, you have to see what others are first saying about you. If a bad review is posted in a forum for example, were they really talking about your charity, or was the negative reviewer exposed to something made to look like your charity?

CharityNavigator.com offers those who wish to donate a database and lists of charities that they find to be credible. It’s best to provide links on your website to organizations like Charity Navigator so that those wishing to donate see that you want them to do research before making a donation.

It's also important to make sure that your website shows on nearly every page that you are a registered 501(c)(3) organization. In addition, you should always provide access to your EIN number to those who ask. Your EIN can then be checked against charity navigator to authenticate your site and your organization.

Is your website being duplicated?
To avoid charity fraud, you need to make sure that your website has not been duplicated. This common type of scam has been around for years, but it is often overlooked. It takes very little skill to copy all of the code from a webpage.

All you need to do is right-click on the page itself and select, “view page source”. This brings up all of the backend code to the webpage you are looking at. Copying and pasting all of the code into a new webpage creates a duplicate page.

A person with bad intentions can use this copied data to recreate any webpage on the internet by inserting it into a new webpage URL. From this point, it only takes a few slight variations to change the homepage address from, for example, fbi.gov to fbi1.gov or some other deviation of the original. Most people would never notice this or the slight changes to the site.

The person could then set up a credit card payment process on the site and operate it with little threat of being detected. On top of credit card donations, they could take Venmo or even forms of cryptocurrency donations. (Cryptocurrency is a great way to take donations, but it should be done properly. An example of how to properly accept cryptocurrency can be found here.)

Your goal is to make sure that your legitimate charity does not fall victim to this scam. This can be a difficult thing to do, especially when you are a national charity. This fraud constitutes a type of identity theft as well as opens the door to stolen credit card data.

Stolen cards constitute a data breach, which causes a headache and heartache for your organization as well as legal costs, data breach costs and a potential public relations nightmare. To ensure awareness, Google your entity on a regular basis and look for variations in the web URLs that come up. If you find one that does not match yours, report it and have it taken down.

A simple way to make sure that your donations are going to you and to provide clarity to your donors is to lean on Charity Navigator, as mentioned before. The organization offers a link that can be installed on your donation page that will take the person donating to www.charitynavigator.com. They operate a “Giving Basket” that authenticates your entity with them, ensures that the money being donated is legitimate, adds credibility to your organization and helps you avoid fraudulent donations.

Online scams will never go away, so we must always stay on top of our own websites and make sure that the funds being generously donated are going to us and not a bad actor. This tactic has been around for a very long time, but it can often be overlooked. Donated funds are precious in the eyes of all charities; even the smallest donations can do great things and provide to the mission of the charity, so be sure to keep an eye out for these common scams.

Nonprofit organizations operate for the public benefit. Because of this, they are given tax exempt status. It is the duty, obligation and responsibility of every nonprofit to protect itself by protecting its donors.

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