© GreaterGood SA 2013
Non profits beware: there are a number of scams doing the rounds preying on a vulnerable and increasingly desperate sector. From unscrupulous fundraisers to fake call for proposal emails, you need to keep your wits about you and a sceptical attitude to prevent falling for these smooth operators.
It’s hard to believe that someone could be wicked enough to scam a non profit organisation. But, sadly, there are many scams doing the rounds at the moment specifically preying on a vulnerable sector.
Bill & Melinda Gates Foundation email
There have been reports of emails recently that look like they come from the Bill & Melinda Gates Foundation, inviting the recipient to submit a proposal or concept paper for a fee. No matter how legitimate these appear, they are scams. The Bill & Melinda Gates Foundation confirms:
“The foundation does not solicit donations or request any type of administrative or handling charges for its grant applications. If you get a request that appears to be from the foundation for any type of payment, or if you receive an email or communication seemingly from the foundation that you feel is suspicious, please disregard that communication.
To be clear, Bill & Melinda Gates Foundation, Bill Gates, or any foundation employees:
No legitimate funder would ever ask a non profit to pay to submit a proposal.
Some causes have been approached by a fundraiser who says they will raise funds on a commission-only basis. While this is not illegal or fraudulent, it should be treated with extreme caution. It is widely considered unethical to raise funds for charity on commission. Some of the big corporates specifically state that they will not consider approaches from fundraisers like this.
The SA Institute for Fundraising argues: “Commissioned fundraisers will be prepared to say anything about your organisation and your work just to gain favour with donors. What are they saying about you? What is this doing to your hard-earned image? Will this ensure a long-term partnership with the donor – the essence of sustainable and reliable funding.”
This person will be fundraising on behalf of your organisation and will be chasing the money, rather than the relationships that will sustain you. You will be left managing the relationships and living with the conditions set by the funder while the fundraiser walks off with their commission.
The refund scam
A donor contacts you saying they made a donation to your organisation – they will provide false proof of payment – and that they made it in error, can you please refund part or all of it into their bank account. There are a number of variations on this theme, including a fake SARS refund email. Some of them are pure theft scams and some of them are phishing attempts – the scammers are trying to get your banking or other details so they can steal from you.
Nedbank warns: “There is a high incidence of deposit and refund scams taking place; the basis of both is the same.” And according to SARS, “There is a steady increase in email scams and phishing attacks in which the SARS brand is being abused. Members of the public are randomly emailed with false spoofed emails made to look as if these emails were sent from SARS, but are in fact fraudulent emails aimed at enticing unsuspecting tax payers to part with personal information such as bank account details.”
How to stay safe
To avoid falling victim, follow this simple rule: if it sounds too good to be true, it probably is. Be sceptical about any request for money or your banking or personal details. Here are some more tips for staying safe:
No matter how desperate you are for funding, remember that your organisation’s good reputation is priceless.
Have you been scammed? Share your story with us
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GreaterGood SA Financial Report (2009/2010)
GreaterCapital Financial Report (2009/2010)
Annual Report (2008/2009)
Annual Report (2007/2008)
Annual Report (2006/2007)
Annual Report (2005/2006)
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GreaterCapital Project Prospectus, June 2011
A Guide to Finance for Social Enterprises
SASIX Sector Research