Nov 12, 2014
Fraud is a huge concern for nonprofit organizations. While companies may be subjected to massive data breaches, nonprofits can often be the target of hackers trying to determine the validity of stolen credit card information. Charities need to take proactive steps to reduce instances of fraud, and the right donation processing partner can help them mitigate the risks.
Unfortunately, some organizations don't take enough precautions because it can be costly, according to Kern and Company, an accounting firm. However, loopholes in online security can put nonprofits at an even greater risk. Internal protocols and staff training can help employees identify warning signs before serious breaches occur. Data leaks and fraud can harm your organization's public profile. Annual donors may not want to continue giving to a risky organization.
Mitigating online threats
The Internet is a powerful tool for nonprofits. Nearly every organization has an online donation form or at least some sort of Web presence. However, the Internet can expose nonprofits to greater risks if they do not take the proper steps to guard against hackers.
Why are nonprofits at a particularly higher risk than other types of organizations on the Internet? As charitable foundations prioritize streamlining donor experience, many have ended up with simple donation forms, nonprofit blog Classy reported. While this approach can win over contributors, it also puts you at risk for hacks. Some websites do not ask for a card security code, which can result in a higher number of fraudulent transactions. Although too many fields in a form can scare potential donors away, a multi-step process may deter thieves.
The simple processes in donation forms can open the door for credit card theft rings to run thousands of stolen account numbers through the page every day. Nonprofits are usually liable for these fraudulent transactions and have to return the funds.
Focusing on safety and donor experience
While it may seem like you have to choose between online security and a high-quality donation experience, this isn't the case. One of the other ways nonprofits put themselves at risks is by having no minimum donation amount. This simple addition can dissuade credit card thieves without having a serious impact on the experience for actual donors.
In addition to decreasing the risks of credit card fraud, a minimum or suggested donation amount can have the positive effect of increasing your average gift size. However, you should conduct A/B testing before implementing this.
Nonprofits need to do what they can to minimize the threat of online fraud or they may face financial and reputational damages. IP blocking is another feature that can decrease the number of fraudulent transactions because many stolen credit card numbers originate from other countries. If your organization only caters to a donor audience in a few specific countries, blocking IP addresses from others can reduce the threat of fraudulent transactions. A great nonprofit payment processing partner can help you guard against online fraud.