The holidays are a season of generosity. Customers are shopping, spirits are high, and charitable giving reaches its peak. It’s also a time when small business owners can make a real difference by supporting causes that matter.
Unfortunately, this season is also when scammers try to take advantage of that goodwill. Fraudsters know that businesses want to help their communities, and they count on the holiday rush making it easier to miss warning signs.
By learning how to spot potential scams, you can ensure your donations go exactly where you want them to go to make the most significant impact possible.
How Charity Scams Target Businesses
Charity scams often prey on your sense of urgency and empathy. Fraudsters might call, email, or even stop by in person, presenting a compelling story about a cause. Some use fake names of well-known charities. Others create completely fabricated nonprofits with slick websites and social media profiles.
Small businesses are especially appealing targets because scammers assume you don’t have the same verification procedures as a large corporation (and they’re often right). The pressure of the holiday season only increases the odds of acting before checking the facts.
Be Aware of these Red Flags
Most people asking for donations this time of year are doing outstanding work, but a few bad actors try to take advantage of the season of giving. The good news is, they’re not as tricky to spot as they think. Check out a few ways to spot a legitimate charity:
- If someone calls with an over-the-top sense of urgency, pushing you to “donate right now,” that’s your cue to take a breath. Real charities are happy to give you time to decide. If their explanation of what they do feels fuzzy, or they can’t clearly share who benefits from your gift, that’s another reason to pause.
- Payment requests can be revealing, too. A legitimate charity will accept safe, traceable donations—not gift cards, wire transfers, or cryptocurrency. And if you come across a charity you’ve never heard of, a quick online search can often tell you if they’re the real deal.
- Some scammers skip the sales pitch entirely and send a “thank you” or invoice for a donation you never made, hoping you’re too busy to notice. Don’t fall for it. Do your due diligence just as you would with any other donation. And if you didn’t donate? Throw the invoice away!
The best approach? Keep your giving spirit alive, but pair it with a healthy dose of curiosity. A few extra minutes of checking can make sure your generosity lands exactly where you want it to.
Verify Before You Give
The best way to protect your business from charity scams is to approach every request with a little healthy skepticism. Start by visiting the charity’s official website and looking for a physical address, a working phone number, and clear details about the work they do. You can also check trusted resources like Charity Navigator, GuideStar, or the IRS Tax Exempt Organization Search to make sure the nonprofit is legitimate.
When you are ready to verify a request, use contact information from the charity’s website rather than what you see in an email or flyer. And take a look at their financial transparency as well. Reputable organizations are proud to share their annual reports and IRS Form 990. A few minutes of research can make sure your generosity reaches the right hands.
Create a Giving Policy for Your Business
One of the easiest ways to avoid scams is to set clear guidelines for charitable giving. A written policy helps you and your employees know exactly how requests should be handled. Some critical elements of your policy might include:
- A vetted list of organizations your business will support.
- The process for checking the legitimacy of new requests, and who is responsible for making the final decision.
- Provide a set amount allocated for donations so you don’t make impulsive decisions.
- Share how donations should be handled at your organization, whether to an official online portal or mailed checks to a verified address.
When your employees know to forward all donation requests to one decision-maker, it’s much harder for a scam to slip through.
Safely Involve Your Customers in Charitable Giving
Inviting your customers to join in your holiday giving is a fantastic way to share the spirit of the season and bring your community closer together. Choose a trusted charity you have personally vetted and let everyone know exactly who you are partnering with. Share the story behind the cause and how their support will help so customers feel connected to the impact they are making.
Keep the process simple and secure. Use sealed donation containers instead of open cash jars and deliver contributions to the charity promptly. When your campaign is transparent, well-organized, and backed by a reputable partner, customers can give with confidence, and you can feel good knowing your holiday goodwill is going exactly where it should.
What to Do If You Suspect a Scam
If you think a request might be fraudulent, do the following four things:
- Stop all communication. Don’t send money, respond to emails, or answer calls from the suspected scammer.
- Report it immediately. Contact the Federal Trade Commission (FTC), your state’s attorney general, and, if relevant, the IRS, about the fake organization.
- Alert your employees. Make sure no one else in your company responds to the scammer.
- Document everything. Keep records of emails, invoices, and any other communication for possible investigation.
Keep the Spirit of Giving All Year Long
Holiday scams may grab the spotlight, but the truth is that charity fraud can pop up in any season. By integrating simple verification steps into your daily operations and regularly updating your giving policy, you can stay ahead of the curve, regardless of the time of year.
Your generosity is a big part of what makes your business shine in the community. With just a little extra care, you can be sure your support is making a real impact for the causes that matter most to you.
So go ahead and give with confidence. Your contributions will spark joy, create change, and stay far out of reach of anyone with bad intentions.
