Charity Fraud Awareness Week provides an opportunity to focus on a risk that continues to evolve in both scale and complexity. Fraud can arise internally or externally and take many forms, including banking, fundraising and Gift Aid fraud, cybercrime, identity fraud and fraud involving property or investments.
For trustees, senior leaders and in-house legal and governance teams, the question is increasingly how the changing fraud landscape should be reflected in an organisation’s wider risk, control and assurance framework.
What does the evidence tell us?
The charity fraud report: A five-year review (2021 to 2025), produced by BDO and the Fraud Advisory Panel and published in February 2026, draws on responses from 164 UK charities.
Its findings include:
34% of respondents reported fraud or attempted fraud in the preceding year.
38% of perpetrators were insiders within the charity.
73% of respondents affected by fraud suffered a financial loss, while only 32% recovered losses.
45% identified an over-reliance on trust as a barrier to fraud prevention, while 57% of fraud incidents were detected through internal controls.
52% expected the threat of fraud to increase in 2026, with cyber-attacks identified as the biggest concern for the following 12 months.
The Charity Commission’s charity sector risk assessment 2026 adds a further dimension. The Commission, working with the Serious Fraud Office and other regulators, is dealing with increasingly complex cases, which often involve fraud. It notes that fraud and cyber-crime now account for almost half of all crimes committed in the UK.
The regulator recorded a sustained increase in cases involving concerns that charitable status was being abused for private benefit: from 211 cases in 2023/24 to 291 in 2024/25, an increase of 38%, followed by a further 29% increase to 374 cases in 2025/26.
Taken together, these findings illustrate a threat extending beyond straightforward financial fraud; technology is changing the risk environment, insider fraud remains material and internal controls continue to play an important role in detection.
The failure to prevent fraud offence
The legal landscape has also changed. The corporate failure to prevent fraud offence, introduced by the Economic Crime and Corporate Transparency Act 2023, has been in force since 1 September 2025. It applies to large, incorporated charities, that meet at least two of the following criteria: more than 250 employees, more than £36 million turnover and more than £18 million in total assets.
An organisation may be criminally liable where an employee, agent, subsidiary or other “associated person” commits a fraud intending to benefit the organisation, or in certain circumstances, one of its clients, and the organisation did not have reasonable fraud prevention procedures in place. Crucially, it is not necessary to show that directors or senior managers knew about or authorised the fraud.
An organisation is not liable under this particular offence where it is itself the victim or intended victim of the fraud.
For charities within scope, this adds a specific corporate criminal law dimension to the wider governance case for effective fraud prevention. It is therefore very important that charities have in place reasonable fraud prevention procedures in place – and what is reasonable is a complicated question to answer. Although the offence applies only to large organisations, government guidance says that its principles represent good practice and may also be helpful for smaller organisations.
For more detail, see our blog on the failure to prevent fraud offence.
From legal compliance to wider fraud resilience
For charities within scope of the offence, reasonable fraud prevention procedures are now a specific legal concern. But fraud prevention also sits within trustees’ wider responsibilities for their charity’s resources, governance and internal financial controls.
The Charity Commission’s guidance on protecting a charity from fraud recommends, amongst other things:
Adopting and promoting an anti-fraud policy.
Reviewing fraud risks annually and following fraud or attempted fraud.
Testing whether financial controls are being followed in practice.
Identifying where trustees, staff or volunteers require further training.
Understanding cyber-fraud and cybercrime risks.
Maintaining a fraud response plan setting out what should happen when fraud is discovered. Mills and Reeve offers a full fraud investigation and resolution service, details of which can below.
This is not simply about having policies on file. The guidance emphasises understanding what “normal” looks like within a charity’s financial systems, checking that controls operate in practice and promoting a culture in which fraud awareness and the raising of concerns are encouraged.
Where can charities find practical support?
The Prevent charity fraud resource hub brings together practical material on preventing, detecting and responding to charity fraud. Resources include:
A fraud risk assessment template.
Example anti-fraud policies.
Practical help sheets and case studies.
On-demand webinars.
Charity fraud research.
Free cyber-security e-learning, including resources from the National Cyber Security Centre.
These resources may be particularly useful when benchmarking or reviewing existing fraud risk assessments, policies, controls and training.
Explore our forum dedicated to fraud, Deception Diaries where you can get the latest developments and updates.
Contribute to the 2026 charity fraud survey
Charities can also help strengthen the sector’s evidence base. The 2026 charity fraud survey, delivered by the Fraud Advisory Panel in partnership with BDO, is now open. Now in its sixth year, the survey is seeking contributions from charities of all sizes, with the findings contributing directly to the next Charity Fraud Report and to wider campaigns designed to help protect charities from fraud.
Looking ahead
Charity Fraud Awareness Week provides a useful opportunity to consider how an organisation’s fraud risk profile is changing, whether its existing controls remain proportionate to that changing risk and where emerging threats should feature within its wider governance, risk and assurance frameworks.
You can find out more information about our comprehensive fraud and investigatory services.
If you have any questions, please contact Neil Burton, Sarah Williams, or Sarah Jacobs.
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