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Dishonesty. Theft. Deceit. These are not words that you want to think about let alone acknowledge happen at your church. Unfortunately, now, more than ever, giving fraud is prevalent at churches and nonprofits around the world. In fact, according to Brotherhood Mutual, researchers expect worldwide church financial fraud to reach the $80 billion mark by 2025, which would be over a six percent increase annually.
Fraud is defined as “wrongful deception with the intent to gain personally or financially.” In the church, this often looks like a deceitful person (or company) who works to trick churches into helping or giving to them. So, what can be done?
The good news is that awareness, diligence, and a secure giving platform can help prevent giving fraud. Below we will look at a series of scenarios designed to help promote awareness and give tips to prevent giving fraud from happening at your church.
Giving Fraud Scenario One
Your church Mother’s Day Out Director has been a member for years. She is trusted and respected in your church circle. After her husband was laid off from his job, money became tight and she became desperate. She began to tell parents that the Mother’s Day Out church account was in her name so checks could be made out to her. She is the one who kept a record of the headcounts in classrooms, so in her reports, she just reported fewer children so nobody would realize that money was missing.
- One person is in charge of both attendance lists and a bank account.
- Parents were told to make out checks to a person, not the church.
- Desperation can be devastating. As the church, make sure to check on those you know who are struggling.
Tips for Fraud Prevention
- When dealing with any area of the church, make sure that no one person has all of the responsibility. Divvy up tasks, especially ones related to money, accounts, and tuition payments.
- Provide payment information to all parents who enroll their children in your programs. Then, they will know that writing checks to a person is not a payment option.
- Don’t count anyone out. Satan is a deceiver and we are all prone to sin (Romans 3:23). Keep people in your church accountable.
Giving Fraud Scenario Two
Last summer, your church’s mission pastor led a small team on a trip to Africa. Many people received the Gospel, and your church is eager to continue the partnership. Not long after the team returned, your church received a call from a ministry in the same place in Africa that you served, asking for support to build an orphanage in that city. Your church loves that idea, opens an account on their behalf, and then wires the thousands of dollars given to that ministry. However, when your team returns to Africa, they find no trace of an orphanage, no sign of that ministry, and can no longer contact the supposed orphanage director. You quickly realize that your church was scammed.
- Not once did this ministry provide any credentials or proof that they were who they said they were.
- They asked you to directly wire the money into their account.
- The decision to give to this ministry was made hastily, without consideration, advice, or input.
Tips for Fraud Prevention
- Make sure to dig into the credibility of international requests. Scammers are smart and know that this can be harder to track down. They often prey on your ignorance.
- Do a quick Google Search for that ministry or contact name. If anything turns up that looks mildly suspicious, dig deeper.
- Scammers are now able to hack phone numbers and even email addresses. Don’t just assume because the caller ID or email address looks legitimate that it is.
- Always get a second opinion. It’s important that you aren’t the sole decision maker when it comes to managing money that is given.
- Never directly wire money over unless you are absolutely sure that it is a secure and legitimate account. Once the money is deposited in another account, you lose complete control over what happens next.
Giving Fraud Scenario Three
John and Jane Doe used to be faithful members of your church, but you haven’t seen them for some time. However, one Sunday John attends church and during the offering time, he pulls out his phone and gives a $7,000 donation online. The next day, John calls saying that there’s been a mistake. He meant to give $700 but must have added an extra decimal when he was in a hurry to put his phone away in church. You understand that mistakes happen and issue John a refund right away. However, a few days later you learn that John and Jane are in the middle of a divorce, John had cleaned out Jane’s bank account, and that the account that the original gift was given from was actually empty so the gift was declined. John had pocketed the $6,300 refund, and nothing was actually given to your church.
- John asked for an immediate refund. Urgency should always be a warning.
- Be wary of online giving systems that make mistakes easy. Mistakes do happen, but steps should be in place to help prevent them.
- John and Jane’s sudden disappearance and then his reappearance should be noticed in your community. The church supports each other in the hard times.
Tips for Fraud Prevention
- Your church should never issue a refund before they have reached your bank account.
- Have set financial procedures in place that donors know about and can access. This will help you avoid any potentially awkward situations when people ask for refunds.
Giving Fraud Prevention Best Practices
Here are a few more best practices when it comes to preventing giving fraud at your church.
- Make sure that your church’s financial policy is finalized and available to all church donors.
- When it comes to people who have access to your church’s accounts and funds, be sure to run annual background checks and credit reports.
- Require external audits yearly.
- Provide giving envelopes at your church and encourage people to put their personal information on it so you know who to contact if there are any questions.
- Have multiple people collect the offering at your church, and make sure that you have multiple counters on any given Sunday too.
- Make sure that you deposit all offerings immediately into your church’s secure bank account.
- Know what to look for when spotting fake websites (i.e. poor spelling, lack of a contact page, suspicious name, lack of an SSL certificate, etc.)
- Become familiar with the security measures your online giving platform puts in place.
- Always find out more information about partnerships, charities, and outside ministry organizations, to whom you hope to give.
- Report scams to the Federal Trade Commission.
Giving fraud is an unfortunate and ugly reality of our world today, but that shouldn’t stop or scare your church away from being generous. The faithful giving of church members has the power to take the Gospel and the mission of your church further than you ever thought possible. For more giving advice, check out the Church Relevance Course Shop.
Samantha Decker has worked as a content marketer and the church communications director for a local church. Samantha brings both experience and a passion to equip the church by providing resources to help them live out their mission for the sake of the Gospel of Jesus. She’s always up for some (good) coffee, travel, and intentional conversation. Samantha enjoys living in Oklahoma City with her husband, Dustin, and their two sons Eli and Caden.