Report finds charities are lax with internal security and governance
A third of charity fraud cases involve staff, volunteers or trustees, a Charity Commission report has found.
Figures from April 2015 to March 2016 show that trust was being abused mostly by insiders but also because charities were not secure enough in their governance to prevent insider fraud.
The statistics are only for charities in England and Wales.
Director of investigations at the commission, Michelle Russell, said charities were trusting as they were "committed to making a difference in society".
But she added: "Unfortunately, for a range of reasons, that mutual trust can be abused. The reality is insider fraud does happen in charities.
"Ultimately, whether it happens in a small charity with no employees or a multi-million pound household name, fraud diverts money away from those the charity is helping and who need it."
The warning to charitable organisations comes as the boss of a defunct Welsh charity was jailed for five years for embezzling £1.3m to fund his lavish lifestyle.
The commission has urged donors to be vigilant and watch out for sudden lifestyle changes in its volunteers and staff.
It added that strange behaviour or unexplained cash withdrawals could be a sign of insider fraud.
Russell added: "Our aim is to help charities increase their own resilience to this kind of abuse and protect donors' valued funds as well as protect public trust and confidence in charities."
