Guidance

Protect your charity from fraud

Updated 27 November 2024

Applies to England and Wales

• Publication for Northern Ireland
• Publication for Scotland

1. What is fraud 

Fraud can affect any charity and is one of the most common types of abuse within the sector. As trustees you have a duty to manage your charity’s resources responsibly so it’s important to: 

• identify the risks of fraud at your charity 
• take actions to protect your charity 
• check that your actions are working 

In charities, fraud is commonly where someone deceives a charity to get money, information or data. It can take many forms, such as fraud connected with: 

• fundraising 
• banking 
• cyber crime 
• tax and Gift Aid 
• property and investments 
• charities’ identities 

Fraud can come from internal and external sources. For example, from employees and volunteers, or from fake requests for funding.

2. If you discover fraud or attempted fraud

If you discover or suspect fraud:

• do not panic. Act quickly – this will help you reduce the harm to your charity
• report it to Action Fraud
• make sure everyone understands what they need to do and follow your charity’s procedures
• preserve evidence and keep a record of what happened and when
• you may need to report it to the Charity Commission. Read our guidance about How to report a serious incident in your charity
• seek legal advice if you need it

It’s important to report fraud and attempted fraud to Action Fraud. They will make sure you get the advice you need.  

Reporting fraud and attempted fraud helps you get essential advice to get your charity back on track. It also helps build a clearer picture of the scale of fraud affecting the wider sector. 

It is also important you review how the fraud happened and your charity’s financial controls. This will help you identify possible changes you may need to make to help avoid similar fraud happening again.  

3. Protect your charity 

As charity trustees you must manage your charity’s resources responsibly. Make sure you: 

• know your responsibilities 
• have strong financial management and governance at your charity 
• understand the risks your charity faces and how it can manage them 
• understand your charity’s financial systems and what ‘normal’ looks like 
• promote a culture of fraud awareness at your charity 
• take the right actions if you discover fraud

Use our guidance Internal financial controls for charities (CC8) to make sure your charity has suitable controls in place and be satisfied that everyone uses them.

Your charity should have suitable financial controls in place to guard against fraud. The types of controls you need will depend on factors like your charity’s size, how it operates and the types of funds it has.  For example, you will need appropriate controls if you use online banking.  

Regularly review your charity’s internal financial controls to check that they continue to be the right measures for your charity. Update them if needed.  

Here are some actions you can take to help you:  

• adopt an anti-fraud policy and promote it, so that everyone at the charity knows the policy 
• review your charity’s fraud risks once a year, or after a fraud or attempted fraud 
• run checks to satisfy yourselves that your financial controls are being followed  
• know if your volunteers, employees or trustees do not understand your fraud prevention measures and act on this. For example, do they need training? 
• understand the risks of cyber fraud and cyber crime 
• complete pre-employment checks on staff 
• have a fraud response plan so that everyone knows what to do if they discover fraud 
• discuss risks of fraud with organisations that your charity works with or funds 
• report risks and how they are managed in your trustees’ Annual Report. Some charities must do this 

Your charity should promote an anti-fraud culture where: 

• you promote fraud awareness messages  
• you encourage people to improve their knowledge about fraud. For example, cyber fraud 
• you encourage people to voice concerns 
• everyone knows how to raise concerns

You can find further information about:

• having suitable internal financial controls at your charity
• being cyber secure

There are resources available to help you: the Preventing Charity Fraud website has help on preventing, detecting and responding to fraud.