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Peace of Mind: Security and Risk Reduction for Charities
July 2024
Safe and Secure: Can Contactless Donations Protect Your Charity?
The UK ranked 3rd in the world for the amount of money donated to charity in 2022 with 71% of the population being donors*.
Charities can often be subject to theft and fraud with Action Fraud reporting that the total amount lost between November 2022 and October 2023 to be £2,732,170 with over 500 cases.
Charities are reliant on altruism, trust and honesty. There is the risk of theft and fraud that can be either internal or external.
Internal Charity Fraud
Charity Fraud Report 2023: This report by BDO and the Fraud Advisory Panel highlights that internal fraud (by staff or volunteers) is the most common type of charity fraud**.
While we know that staff and volunteers are crucial to running a charity, there are steps that can be taken to minimise this risk.
If you are a charity concerned about internal theft or fraud please see this resource from the Preventing Charity Fraud organisation. It is an excellent guide to speaking to your volunteers about charity fraud – Speaking to volunteers about charity fraud
External Charity Fraud
The highest recorded examples of external charity fraud in 2022*** were the misappropriation of cash or assets – this was double the number for 2021.
Cash can be stolen from events, charity boxes or on the way to be deposited. In addition to the loss to the charity, this can be extremely upsetting for staff and volunteers.
Scammers might impersonate your charity and try to collect funds illegally. Having strict donation policies and appointing a representative to monitor charity collections under the charity banner is just one option.
Why is it important to protect donors and donations
Reliance on fundraising is crucial to the charity’s survival but are cash collections the best way to collect?
We can access this from both sides – The donor and the Charity.
The donor seeks convenience, security and to feel good about their donation. The thought of their donation being stolen or not going to the heart of the charity would be devastating and could mean they are less likely to donate in the future.
The Charity would like to raise as much money as possible to be able to fulfil their aims and to operate within their constitution. A simple, efficient process with minimal risk and clear reporting is ideal, such as an online management portal.
Cash vs Contactless charity donations, which is best?
You might be weighing up – Cash vs Contactless payments – which is more secure? This is a question that we are often asked, particularly in the post-COVID era. Let’s look at more detail about the handling of cash donations.
Advantages
- Less likelihood of theft or fraud
- Easy to track
- Online instant reporting
- Quick and easy for the donor ‘tap and go’
- More hygienic
- Easy to track number and amount of donations
- Ease of additional income from Gift aiding
Disadvantages
- Small card processing fee for the charity
- Less likely to be used for small amounts
Advantages
- Loose change can be easily donated
- Saves on card processing fees
- Some donors might not have a contactless card
Disadvantages
- Not everyone carries cash
- External theft/fraud – Could be stolen
- Less hygienic
- Internal theft/fraud – Staff could be tempted to steal
- Hard to track the number and amount of each donation
- Fill out a form for Gift Aid
- No purchase protection
Are contactless donations the solution?
The UK is moving towards a cashless society. Contactless payments utilise a series of security measures like encryption and tokenisation to protect personal or sensitive information.
Taking card payments generally reduces the risk of physical fraud as stolen cash is almost impossible to recover.
The benefits of contactless donations are clear when we look at the risk to our volunteers, the theft risk and the reporting of donation behaviour.
With more data about our donors, charities are able to make strides to increase the donation amount per transaction, build campaigns in a more informed way, focus on the easy of donating and save on costly staff and admin fees.
If you would like to explore using contactless donations for your charity please contact us –
By phone – 0203 488 8095
Or by filling out our enquiry form.
*Charities Aid Foundation – https://www.cafonline.org/about-us/research/caf-world-giving-index
**BDO Charity Fraud Report – https://www.bdo.co.uk/en-gb/insights/advisory/forensic-services/charity-fraud
***Charity Fraud examples – https://www.qlicnfp.com/charity-fraud-examples-you-should-watch-out-for/