BDO has launched their annual Charity Fraud Report in partnership with the Fraud Advisory Panel for the fourth year running. The report highlights that, despite operating in an increasingly challenging fraud environment, there is a genuine sense of progress and improvement among charities in managing fraud risk.
This year’s report had the highest response rate to date, with 139 respondents, marking a 15% increase from last year. This demonstrates an ongoing commitment from charities to share their fraud-related experience so that we can get a clearer view of the charity fraud landscape.
The survey reveals a sense of development and growth in how charities manage fraud risk, from a positive stance when dealing with instances of fraud, to an optimistic outlook from respondents when developing prevention strategies.
The report further highlights a number of evolving trends that must be addressed by charities, including a sustained risk of fraud from those within charities, the ever-evolving threat of cybercrime, and the strain that the ongoing cost-of-living crisis has placed on both households and charitable organisations.
The three most common types of fraud overall included:
- Misappropriation of cash or assets (40%).
- Authorised push payment (APP)/payment diversion fraud (33%).
- Expenses and subsistence fraud (29%).
Additionally, although the level of fraud experienced by respondents remained broadly the same as last year (42% compared to 43%), only 84% suffered financial loss compared to 92% in 2023, with further insights showing that:
- 78% of charities experienced some non-financial impact after a fraud compared to 56% in 2023.
- 50% of fraud was committed by people within the charity (equal to 2023).
- 29% of fraud was committed by external fraudsters (up from 23% in 2023).
Moving forward, the survey found that:
- 50% of charities expect fraud risk to increase in 2025.
- 60% of respondents agree that the ongoing cost-of-living crisis has heightened fraud risk.
- 45% of respondents believe the Economic Crime and Corporate Transparency Act will apply to them, of which, 88% have already taken or are committed to taking action in response.
Learn More:
Read the full report here to learn how to protect your organisation.
About BDO:
BDO's global network of public accounting, tax and advisory firms operates in 166 countries, offering innovative and flexible solutions to help businesses in all sectors navigate the challenges they face. They provide support with a proactive approach that emphasises responsibility, integrity, and collaboration.