July 24, 2024

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In 2023, individual Americans made contributions exceeding $326 billion, reports Giving USA’s Philanthropy Annual Report. Unfortunately, fraudsters have found a way to manipulate this source of income. They have been targeting Nebraska-based nonprofits with deceptive donation reimbursements and attempts to steal donor base private data.

The fraudsters, disguised as wealthy, first-time contributors, send large counterfeit checks, typically amounting to five digits or beyond. Then they ask for a partial reimbursement from the organization mistakenly. The original check from the donation bounces after the nonprofit issues the refund, leaving the charitable entity with a considerable financial deficit.

This fraudulent scheme can also be conducted through credit cards. The fraudster asks for a partial or full refund of the original credit card donation to a different card, citing mistakes or special circumstances. The nonprofit issue the transactions and endures a chargeback for the original operation.

To safeguard your firm and yourself, consider the following steps:

1. Commucate: Brief your employees and board of directors about the intricacies of these fraudulent schemes, how to identify them and protect the organization from such scams.
2. Know your Donor: Investigate donations that come from rare sources or unusual contributors before granting a refund. This could be as simple as an online search with the donor details or discussing the donation’s intent. If they aren’t well-versed with your basic services, be extra vigilant.
3. Cross-check Refund Requests: Contact the donor personally prior to launching refunds.
4. Limit Refund Methods: Avoid writing checks or disbursing cash for any transaction completed via credit card. Always refund to the original card only.

For more information to protect your organization from frauds like these, visit [ProtectTheGoodLife.Nebraska.gov](ProtectTheGoodLife.Nebraska.gov) or contact the Consumer Affairs Response Team of Nebraska Attorney General’s Office at 402-471-2682.

Frequently Asked Questions

How can nonprofits protect themselves from donation scams?

Nonprofits can raise awareness among their employees and boards about donation scams. They should research uncommon donors or sources before issuing refunds. Verifying refund requests and limiting the refund form to the original transaction method are also essential steps.

What is the common scam method targeting nonprofits?

Commonly, fraudsters impersonate wealthy donors, send large fake checks, and then ask for a partial refund, claiming a mistake. They might also use stolen credit cards and request a different card’s refund.

Who to contact in Nebraska about fraudulent attempts?

For more information about fraudulent attempts, organizations can visit ProtectTheGoodLife.Nebraska.gov or reach out to the Consumer Affairs Response Team of the Nebraska Attorney General’s Office at 402-471-2682.