Over a third of charities reported incidents of fraud last year 

Fraud is now a routine, not a rare, risk for charities – and the BDO Charity Fraud Report 2025 shows that smaller organisations are feeling the sharpest edges of that reality. 

What the BDO report is telling us 

The headline is stark: a significant proportion of charities have experienced fraud or attempted fraud in the last year, with cyber-enabled scams, mandate fraud and insider abuse all featuring prominently. Many incidents never make it to the regulator or the police, especially in small charities that fear reputational damage or simply lack the time and confidence to report. The report highlights familiar weak spots: thin finance teams, overstretched trustees, gaps in basic controls, and a culture that still struggles to talk openly about fraud risk. 

For smaller organisations, the combination of high trust, low capacity and rapid growth in digital payments is particularly toxic. The message is not that charities are uniquely vulnerable because they are badly run; it is that normal charity ways of working – informal, relationship driven, mission first – are exactly what many fraudsters bank on. 

Five practical steps to prevent fraud 

BDO’s analysis boils down to five big themes: know your risks, tighten your systems, train your people, strengthen oversight, and respond well when things go wrong. That means: 

• Doing a simple fraud risk assessment, linked to your reserves, banking arrangements and fundraising methods. 
• Putting in basic financial controls (segregation of duties, dual authorisation on payments, regular bank reconciliations) and not waiving them “just this once”. 
• Training trustees, staff and volunteers to spot red flags – from phishing emails to unusual supplier changes – and making it safe to raise concerns. 
• Making sure your board actively scrutinises finances, questions anomalies and understands its role in fraud prevention. 
• Having clear, written procedures for reporting, investigating and learning from incidents, so you are not improvising under pressure. 

None of this requires a forensic accounting department. It does require intention, time and – for many smaller charities – some outside help. 

How DSC can help plug the gaps 

If the BDO report diagnoses the problem, much of what DSC already delivers provides realistic treatment – especially for small organisations trying to do the right thing on a shoestring. 

• Governance and trustee basics: The Governance App gives boards a structured way to review how they’re working against the Charity Governance Code, including risk, finance and compliance – a very natural place to surface and prioritise fraud issues. Publications like The Charity Trustee’s Handbook and The Charity Treasurer’s Handbook walk trustees through their core legal duties around safeguarding assets and overseeing finances, in plain English. 

• Finance, controls and oversight: Our ever-popular Finance for Non-Finance Managers course covers topics such as understanding charity accounts, budgeting, and internal financial controls – all areas flagged by BDO as weak points when fraud occurs. For a part time bookkeeper or a lone treasurer, a day on one of these courses can be the difference between “we trust our processes” and “we hope for the best”.  

• Policies, procedures and whistleblowing: The best-selling Charity Policies and Procedures Templates bundle gives you 55 core policies, including whistleblowing, scheme of delegation, personal data breach and trustee expenses – all crucial foundations for managing fraud risk and demonstrating that you take it seriously. The templates are deliberately simple to adapt, which is gold dust for small organisations without HR or governance specialists.  

• Board culture and information: Getting your Board paperwork right addresses a quieter but vital part of prevention: getting the right information to the right people, at the right time. Clear, timely finance reports and focused board packs make it much harder for fraud to hide in the noise. Our Board Paperwork speed read is a quick and easy way to make sure you’re getting the basics right – and our forthcoming Board Paperwork Templates will help to fill in the gaps – sign up to our newsletter here to make sure you don’t miss it!  

If you’ve not reviewed your financial and fraud prevention processes recently the BDO report is a warning sign – even if the worst does happen, being able to say “We assumed it could happen, so we invested in training and put things in place that make it both harder to pull off and easier to spot” will go a long way to managing and repairing any damage that ensues.