Advertising feature:
Charitable organisations have become an attractive target to fraudsters. John Cleghorn, account executive at commercial insurance broker and risk management specialist Gallagher, explains the threats and steps to take to help protect your charity.
Last year, the Annual Fraud Indicator published a report which highlighted that charitable organisations are estimated to have lost £2.3 billion due to fraud.
There are a number of causes that make charities an attractive target to fraudsters. Charities often rely on the goodwill and support of employees, and the notion that ‘no one would abuse a charity’. Secondly, charities can often have small finance teams which can result in a lack of scrutiny and division of duties.
This is on top of the high levels of cash income that naturally fluctuates, making it easier to cover for fraudsters.
Fraud can take place in the form of an external attack and from within the charity itself. Here are some examples of both internal and external fraud:
Internal:
- Fraudulent cheques
- Intercepted cheques or cash donations before they are paid into the charity’s bank
- Misuse of credit cards by staff or falsely claiming expenses
External:
- Fraudulent cheques or false invoices
- Identity fraud by hijacking bank accounts or phishing emails
- Card-washing schemes
- Database hacking or theft
There are a number of things you can implement within your charity to help prevent an attack. For example, instilling a culture of ethical behaviour, raising awareness of social engineering fraud, developing an anti-fraud policy and implementing robust financial controls.
Sometimes however, despite your best efforts, you can still fall victim to dishonest activities. This is where insurance can come into play. There are two types of insurance available: Fidelity Guarantee or Employee Crime for internal fraud only, and Crime Insurance for both internal and external fraud. Given the increase in fraud and the variety of ways that fraud can hit a charity it may now be time to consider insurance to help protect your organisation.
For more information, contact Gallagher on 0800 6123758, email [email protected] or visitwww.ajginternational.com
