Donors, beware these digital giving scams

Philanthropic fraud flourishes online. Take these steps to safely make digital donations part of your overall giving plan.

IT HAPPENS ALL THE TIME: A friend shares a link to their favorite charity’s social media page, a relative asks you to contribute to an online crowdsourcing campaign or you’re inspired to respond to a text-to-give request after a natural disaster.

As with so many other aspects of life, charitable giving has gone digital, with online appeals that tug at your heart and make donating easier. Though online giving still comprises less than 20% of all charitable donations, from 2019 to 2021 alone there was a 42% jump in giving online, and more than a quarter of those donations were made using a mobile device.¹

This shift makes sense. Donating digitally to a cause you care about is convenient and gives you the satisfaction of acting quickly. Yet the proliferation of digital giving options raises important issues, says Alexandra Scuro, philanthropic strategist at Bank of America. “The questions become: How do you engage with a cause you care about online in a way that feels aligned with your larger giving strategy? And how do you do so in a way that’s secure?”

Staying secure is especially important as digital giving has ushered in a rise in cyber fraud and online scams. Here’s what you can do to protect yourself — and support good causes — no matter how you give.

A red flag and text that reads “5 red flags to watch for.”

When you get a request to make an online donation, any of these could be a sign to walk away

A clock with red tape across the face and text that reads “An urgent deadline.”

Scammers are quick to apply pressure to get your money. Don’t feel pressured by a date. A reputable charity will take your donation any time.

A gift card with text that reads “A donation via gift card, wire transfer or crypto.”

Cyber criminals often solicit donations in the form of cash alternatives. They’re looking for transactions that will be hard to trace.

A speech bubble with the words “thank you!” and text that reads “An unexpected ‘thank you’.”

Another trick is an emailed or texted thank-you note for a donation you never made, with a link for making an additional gift.

A name tag with a misspelled URL and text that reads “A vaguely familiar name.”

Scammers often use names that are similar to or misspellings of well-known groups to fool you and create a false sense of security.

A raffle ticket with the words “enter to win” and text that reads “The odd detail.”

If someone offers to pick up your donation in person or enter you in a sweepstakes, trust your instincts and back off.

Giving scams one of the IRS’s “Dirty Dozen”

In listing charitable giving scams as one of its “Dirty Dozen” fraud schemes, the IRS notes the risk is especially high for requests that come over the phone, email and texts.² The sophisticated nature of these cyber crimes makes them difficult to detect. Even the most experienced donors may be vulnerable to urgent and seemingly heartfelt requests for aid arriving via email, texts or social media.

Even the most experienced donors may be vulnerable to urgent and seemingly heartfelt requests for aid arriving via email, texts or social media.

The rise of fake charities poses the biggest risk to donors, with scammers impersonating legitimate organizations often emerging on the heels of a global crisis or natural disaster. They’ll use keywords or phrases to convince donors they’re supporting an actual cause (think “war in Ukraine” or “fire in Maui”). Many may sound like legitimate charities, but they’re not.

Scammers may also intercept donations when you’ve provided a reputable charity with your financial information. You may get a message like: “We’ve changed our account. Please send your donations here.” And directing money to a fake charity isn’t the only risk you face. If you’re donating by credit card, your gift could be a way for an illegitimate organization to capture your credit card information and sell your personal data.

How to vet online appeals

Given this risk of fraud, it’s essential to do your due diligence before you respond to an online request for a donation. One simple rule is to pause before you respond to an unfamiliar organization. If you get a link to give via text or social media, don’t click on it. Go to the website of the actual organization, if there is one, and vet that carefully.

One simple rule: If you get a link to give via text or social media, don’t click on it. Go to the website of the actual organization, if there is one, and vet that carefully.

Another easy bit of vetting is to do an online search of the charity’s name to see if there have been negative news reports, Scuro notes. You can check with charity watchdogs like Charity Navigator and the Better Business Bureau or even go so far as to look up a charity’s Form 990 tax return online.

Using a donor-advised fund (DAF) can also help you feel confident your gift is going to a legitimate charity. That’s because DAFs can make grants only to IRS-recognized charitable organizations. “They will go through the process of confirming that the recommended organization is in good standing,” Scuro says.

While a DAF may not offer the same speed as a text-to-give platform, the turnaround times are relatively quick, Scuro notes. A DAF may also suit donors who wish to give anonymously or make a one-time gift without establishing an ongoing relationship with the organization.

Transactional vs. transformational giving

“Consider allocating 80% of your donations to your main mission and leave 20% for unexpected needs.”
— Alexandra Scuro, philanthropic strategist at Bank of America

Because online giving emphasizes speed, Scuro says, “it’s important to weigh how transactional you want to be with your giving versus how transformational.” Digital donations are increasingly frictionless — just a click or two and you’re done — which can lead to a more transactional approach and perhaps leave donors without a clear idea of how their gifts are making a difference. By contrast, “a transformational giving plan allows the donor to spend more time thinking about the organizations they want to support and doing the necessary due diligence through a variety of means,” Scuro says.

“One way to balance the speed of online donations with your more thoughtful long-term philanthropic goals is to adopt a strategy that allows for unplanned support for natural disasters or other emergencies,” Scuro adds. “Consider allocating 80% of your donations to your main mission and leave 20% for unexpected needs. That way you can enjoy the satisfaction of responding to urgent requests without derailing your larger giving goals. Just be sure to carefully vet the organizations appealing to your generosity online.” They might not be all that they seem to be.

¹Blackbaud Institute, “Charitable Giving Report,” February 2022.
²IRS, “Dirty Dozen: IRS warns of scammers using fake charities to exploit taxpayers,” March 24, 2023.

IMPORTANT DISCLOSURES

Neither Bank of America nor its affiliates provide information security or information technology (IT) consulting services. This material is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this material, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, quality and fitness for a particular purpose. This material should be regarded as general information on information security and IT considerations and is not intended to provide specific information security or IT advice nor is it any substitute for your own independent investigations. If you have questions regarding your particular IT system or information security concerns, please contact your IT or information security advisor.

Donor-advised fund and private foundation management are provided by Bank of America Private Bank, a division of Bank of America N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation.

Donor-advised fund management is provided by Bank of America Private Bank, a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”). Trust, fiduciary, and investment management services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A. and its agents.