Sep 13, 2013
The mission of charities is provide a public service that helps a large community of people in need. From a limited starting point, many organizations have found the Internet to be an ideal vehicle for outreach projects. Unfortunately, as the world becomes more connected and international commerce expands its reach, people grow more susceptible to fraudulent behavior and identity theft. Consumers, businesses and charitable foundations are all affected by scams and malicious software that damages relationships between different institutions, but there are ways that philanthropic groups can protect themselves from fraud.
Many of the measures undertaken by e-commerce retailers can easily translate to online donation sites, as most of the payment processing methods involved in the transaction are fairly similar. Steve Chou, co-founder of an online business, recently told Small Business Trends that organizations have a variety of resources on hand to battle fraudulent credit card payments. There has been a developing trend of credit card thieves using nonprofit organizations as a way to test whether stolen credit card information is legitimate by making a limited donation. In fact, Entrepreneur cited a report conducted by research firm Symantec indicating 31 percent of cyber attacks are levied at businesses with 250 employees or fewer. As a result, the majority of charitable foundations are at risk.
- Use the Internet to your advantage. IP addresses are telltale signals of where a donor is entering their information. Depending on the size and scope of the fundraising campaign, a charity can make use of IP tracking service providers. In doing so, a philanthropic organization can see whether an individual that has no way of knowing about the enterprise has attempted to make a donation of $1 or $2.
- Team up with a payment processing service provider. Chou told Small Business Trends organizations should make sure they're working with a third party that is Payment Card Industry-compliant. That means the provider meets all standards for payment processing through online platforms. Different credit card companies have various lists of service providers that comply with their regulations, but it's always a smart idea for charities to do a little research to ensure the business they've collaborated with is meeting those standards.
Most charitable foundations have recognized the benefits of using the Web for donations and fundraising campaigns. However, no system is perfect and philanthropic organizations need to protect themselves to ensure they keep their donors' trust.