Don’t Let Donor Dollars Disappear: Spotting and Preventing Donor Fraud in Your Organization

You’ve poured your heart into your mission. You finally got that major donor to commit—or maybe your crowdfunding campaign just hit its goal. What a relief, right?

But then… something doesn’t add up. The donor info looks off. The donation gets reversed. Or worse, your organization’s name is used in a fake campaign you didn’t even approve.

Donor fraud is real—and it’s costing small nonprofits and businesses more than just money. It erodes trust.

If you’re a woman-led nonprofit, solo founder, or mission-driven small biz, you likely don’t have a fraud department. But you do have the power to protect what you’ve built.

Let’s talk about how.

What Is Donor Fraud?

Donor fraud happens when someone misuses a donor’s identity or money, fakes a donation, or impersonates your organization for personal gain.

It shows up in ways like:

• Fake donor pledges that bounce or are later disputed

• Chargeback fraud (donor claims they didn’t authorize a donation)

• Donation scams using your name on fake platforms or social media

• Insider redirection, where a staff member or volunteer misroutes donor funds

Real Talk: When a Donation Looks Too Good to Be True

Let’s pause for a second and talk about something that actually happened—not to scare you, but to remind you why due diligence matters, even when the numbers are big.

In 2023, Benedict College, a well-respected HBCU, was offered what sounded like a dream donation—$95 million. The donor? A man named Gregory Gerami, who’d also made similar pledges to other institutions. The school shared the news publicly, hopeful and excited, just like any organization would be.

But the money never came. Questions started piling up. Concerns about Gerami’s background, his ability to give, and inconsistencies in his story led to the deal quietly falling apart. And Benedict wasn’t the only organization that had been approached.

with big responsibility. Before we celebrate, we need to verify.

💡Let this be a reminder: Whether it’s $500 or $50 million, take time to confirm the source, intent, and legitimacy of any large donation—privately and professionally.

🔗 You can read the story here.

Common Gaps That Make You Vulnerable

• No dual-approval process for donation withdrawals

• Lack of donor data verification (especially with online gifts)

• No staff training on spotting suspicious donations or impersonation attempts

• Unsecured donation forms or links

• Accepting large gifts from unfamiliar donors without verification

Steps to Reduce Risk

1. Verify Large or Unusual Donations

   • Reach out to confirm the donor’s intent before using the funds.

   
   

2. Secure Your Donation Platforms

   • Use trusted tools with fraud monitoring (e.g., GiveButter, Donorbox, Stripe).
     

3. Monitor Social Media for Impersonation

   • Set alerts for your org name and logos; report scams quickly.
     

4. Add Approval Layers

   • Require two people to review outgoing funds or donor correspondence.
     

5. Train Staff and Volunteers

   • Teach them how donor fraud works and what red flags to look for.
     

6. Track and Reconcile Donations Weekly

   • Ensure donations match what’s in your donor CRM and bank account.

Actionable Takeaways (What to Do Now)

• Double-check your donation links—Are they secure and branded?

• Create a donor fraud SOP—Add simple steps for verifying, recording, and reporting fraud.

• Assign two people to oversee major gifts and platform activity.

• Add a "What if this was fake?" checkpoint to your donation acceptance process.

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Key Vocabulary

• Donor Fraud: Any act where donation funds or donor information are used fraudulently.

• Chargeback Fraud: When a donor disputes a real donation as unauthorized to reverse the payment.

• Internal Control: A safeguard process that helps ensure proper handling of funds and prevents fraud or errors.

📥 Need This in Your Hands?

Download the FREE “How to Report Donor Fraud” Cheat Sheet

Get all 5 steps in one quick-reference PDF—perfect for your nonprofit team or board binder.

• Fillable + printable

• Easy to follow

• Designed to protect your mission

Donor Fraud Quick Response Sheet.pdf

Download PDF • 2.80MB

Your Fraud Fighting Ally,

-De'Airra