On 2 December 2025 the Charity Commission for England and Wales gave City of London Police figures for November 2024 to October 2025: 561 charity fraud reports and £2,160,169 lost (Charity Commission). A year earlier there were 484 reports to Action Fraud, then the reporting center for England, Wales and Northern Ireland, and £1,177,773 lost (2024 release).
The fraud types table in what fraud is lists charity or donation fraud as fake charities or disaster appeals that collect donations, with donors as the victims; this entry also covers theft inside real charities and charities used to move illicit funds.
How does a fake disaster appeal collect and move the money?
Picture "Riverside Flood Relief", an illustrative appeal opened two days after a flood and paid into a new account at an illustrative bank.
Table 1. One fake disaster appeal, stage by stage (illustrative).
| Stage | Fraudster | Donor sees | Bank can see | Who acts |
|---|---|---|---|---|
| Set up | Opens a personal or company account the day after the flood | Nothing yet | A new account, no charity number, purpose given as donations | Onboarding team |
| Appeal | Posts pages and emails with flood photos and a name close to a real charity | An urgent appeal with no registration number | Nothing yet | Donors, the platform |
| Collection | Takes cards, transfers and gift cards; a pushed transfer is APP fraud | A payee name that differs from the appeal | Credits that reference the flood, into an account no charity holds | Fraud team |
| Cash out | Moves the money on within days, perhaps through a money mule | Nothing | Transfers out and cash withdrawals soon after the credits | Fraud team, then police |
| Report | Closes the page | No charity of that name on the register | A recall request or a police inquiry | Report Fraud, Police Scotland, IC3 |
In San Diego, two men have admitted posing as a defunct youth softball charity to collect stadium concession payments (US Attorney, 11 March 2026).
From Ufuk Gürdaş, reviewer of this entry: "The Petco Park pleas show where a bank can see a sham charity: the concession payments went into accounts controlled by one of the two men, not the youth softball charity whose name they used, so the first check on a charity payee is whether the account holder and the charity are the same entity."
Which acts count as charity fraud, and which only look like it?
The FBI says charity fraud schemes "seek donations for organizations that do little or no work", and the money "goes to the fake charity's creator" (FBI). The Charity Commission adds that fraud "is commonly where someone deceives a charity to get money, information or data" (Charity Commission).
The FTC's telemarketing rule bars a telemarketer from misstating "the percentage or amount" of a gift that will go to the charity (16 CFR 310.3(d)), but sets no cap on fundraising costs. Raising money for a friend is personal cause fundraising, which "is not regulated". Pass it off as charitable, and "you could be committing fraud", says the Commission's guidance.
In the year to October 2024 the Commission opened 603 cases relating to fraud (Charity Commission).
Which schemes do fake charities and dishonest insiders run?
Table 2. Seven charity fraud schemes, who runs each, and an example.
| Scheme | Who runs it | Example and source |
|---|---|---|
| Fake charity | An outsider with an invented cause | Organizations that "do little or no work" (FBI) |
| Disaster or crowdfunding appeal | An outsider, soon after an event | New groups claiming to help victims of a recent disaster (FBI) |
| Copycat of a real or defunct charity | An outsider borrowing a known name | Email appeals "that falsely use the name of genuine charities" (Charity Commission), a kind of phishing and of impersonation fraud; the Petco Park pleas, about $3.5 million from one stadium |
| Lying about where the money goes | The charity's own operators | Cancer patients "got only about 1% of the $18.25 million donated" to Cancer Recovery Foundation (FTC, 11 March 2024) |
| Insider theft | Staff, trustees or administrators | The cases under the next heading |
| Private benefit abuse | People who run or set up a charity | Cases raised with the Commission rose from 291 in 2024 to 2025 to 374 in 2025 to 2026, England and Wales (Charity Commission, 18 August 2026) |
| Terrorist front | A terrorist group posing as a charity | Abuse by terrorist organizations "posing as legitimate entities" (FATF Recommendation 8, June 2026, p. 13) |
Outsiders run the first three schemes against donors, people inside a charity run the next three, and a terrorist front turns the charity into a channel.
How do insiders misuse a real charity's funds?
The administrator of Virginia's state employee giving program took more than $1.5 million of over $5.3 million donated, and got four years in May 2026 (US Attorney). That is embezzlement.
Modest Needs' founder pleaded guilty to wire fraud in 2025; court papers say he took over $2.5 million and listed a fake board (US Attorney). In England, Wales and Northern Ireland such conduct can be fraud by abuse of a position "expected to safeguard" another person's financial interests (section 4 of the Fraud Act 2006).
A woman who stole Sikh Youth UK donations got 2 years 8 months, and she and her brother were convicted of misleading the Commission under section 60 of the Charities Act 2011 (Charity Commission, 9 January 2025).
When does a charity become a channel for laundering or terrorist money?
A US jury convicted the Holy Land Foundation, once the largest US Muslim charity, and five leaders of material support to Hamas in 2008; sentences in 2009 reached 65 years (Justice Department).
FATF Recommendation 8 names three routes for this abuse: terrorist groups posing as legitimate entities, real charities used as conduits, and funds secretly diverted from legitimate purposes. It asks for measures "without unduly disrupting or discouraging legitimate NPO activities". Directive (EU) 2017/541 leaves humanitarian activities by impartial humanitarian organizations out of its scope (recital 38).
In July 2026 US prosecutors charged the global director of a purported charity registered in the UK with conspiring to provide material support to Hamas (Justice Department); the charges are allegations only.
Terrorist financing lists abuse of nonprofits among the ways terrorists raise funds, and money laundering risks for charities covers laundering through charities.
What should make a donor or a receiving bank doubt an appeal?
Treat each sign as a reason to ask questions. For donors:
- A copycat name. Close to a well known charity (FBI).
- A new group after a disaster. The FBI tells donors to be wary of one.
- No registration number. Most charities in England and Wales with £5,000 a year or more must join the register of charities.
- Cash, gift cards, crypto or wire. "It's probably a scam" (FBI); the FTC agrees.
For the receiving bank:
- Holder and charity differ. The payee is not the charity named.
- Opened after the event. The account is younger than the disaster.
- Vouchers and money service businesses. Possibly organized misuse, though both can be legitimate (Commission, 2026).
- A sanctioned name. Before paying a charity abroad, screen a charity name against sanctions lists.
Where is charity fraud illegal, and what punishment can follow?
Table 3. Which law reaches charity fraud where, the mental element each needs, and the maximum.
| Where | Law | Mental element required | Maximum |
|---|---|---|---|
| United States | Wire fraud, 18 U.S.C. 1343; mail fraud, 18 U.S.C. 1341 | A "scheme or artifice to defraud" | Up to 20 years, a fine, or both; where the violation involves a benefit paid "in connection with, a presidentially declared major disaster or emergency" or "affects a financial institution", the limits rise to 30 years and $1,000,000 |
| United States | Telemarketing Sales Rule, 16 CFR 310.3(d) | None stated; covers any telemarketer who misrepresents the cause, tax status, use or share of a gift | No maximum in the section |
| United States | Material support, 18 U.S.C. 2339B | "Knowingly", knowing the group is a designated terrorist organization or engages in terrorism | Up to 20 years, a fine, or both; any term of years or life if a death results |
| England, Wales and Northern Ireland | Fraud Act 2006: abuse of position (section 4) or false representation (section 2) | "Dishonestly", intending a gain or a loss | 10 years at most on indictment, or a fine, or both (section 1) |
| England and Wales | Charities Act 2011, section 60 (false or misleading information to the Commission) | "Knowingly or recklessly" | 2 years at most on indictment, or a fine, or both; a conviction for dishonesty or deception disqualifies a trustee (section 178, Case A) |
| Scotland | Fraud at common law (Scottish Government) | Not given in the Scottish Government source | Not given there; a conviction involving dishonesty disqualifies a trustee (2005 Act, section 69) |
| Northern Ireland | Fraud Act 2006 as above; inquiries by the Charity Commission for Northern Ireland (Charities Act (Northern Ireland) 2008, section 22) | An inquiry power, no intent element | No penalty in section 22 |
| United Kingdom | Terrorism Act 2000, section 15 (fund raising) | Intends or knows, or has "reasonable cause to suspect", that the money is for terrorism | 14 years at most on indictment, or a fine, or both (section 22) |
| European Union | Directive (EU) 2017/541, Article 11 (terrorist financing) | "When committed intentionally" | "Effective, proportionate and dissuasive" penalties (Article 15(1)), no set maximum; Ireland (recital 41) and Denmark (recital 42) not bound |
At the 20 year maximum, wire and mail fraud are class C felonies under 18 U.S.C. 3559(a). The Terrorism Act reaches the whole UK (section 130).
Fraud Act sections 1 to 9 cover England and Wales and Northern Ireland, not Scotland (section 15(2)); the Charities Act 2011 covers England and Wales only (section 356(1)).
Which regulators and police forces deal with charity fraud?
The UK has three charity regulators and two police routes:
- England and Wales. The Charity Commission for England and Wales; Report Fraud (NCSC).
- Scotland. OSCR, which may inquire into a body that "appears to OSCR to represent itself as a charity" (section 28) and takes up "Misuse of charitable funds or assets" (OSCR); Police Scotland on 101.
- Northern Ireland. The Charity Commission for Northern Ireland; Report Fraud.
- United States. The FBI's IC3 and the FTC take reports; NASCO is the association of state charity offices, and the IRS search shows if gifts are tax deductible.
complead, formerly Sanction Scanner, offers fraud detection for bank transactions: each transfer is scored before it completes, and the payee account is checked for mule links and reuse. A high score alerts your fraud team, who can hold the transfer, block it or release it. Transfer signals and AML checks feed one customer risk score, because a single engine handles a charity customer's onboarding, screening, monitoring, fraud cases and investigations.
When flood appeal credits land in a week old private account, the receiving bank decides whether to pay them out or hold them and ask which registered charity they are for.
Related terms
- Fraud vs money laundering. Taking money versus hiding its origin.
- Impersonation fraud. Posing as someone trusted to get money.
- APP fraud. A payment the victim is tricked into sending.
- Money mule. Someone who moves crime proceeds for others.
- Phishing. Fake messages that steal details.
- Embezzlement. Theft of money one was trusted with.
