Over half of charities expect fraud threat to rise this year, BDO finds

Over half (52%) of charities expect the threat of fraud to increase in 2026, according to a new report from BDO and the Fraud Advisory Panel. 

The Charity Fraud Report, which surveyed over 160 leaders from UK charities, found that 34% have reported incidents of fraud or attempted fraud in the last 12 months, down from 42% last year. Some 38% of the perpetrators were individuals from within the charity.  

The survey found that reputational damage concerns have doubled in the last year, while 73% of charities suffered financial losses. Only 32% of those affected recovered their funds.

Amongst charity leaders, cyber-attacks remain the primary concern for the next 12 months. High-profile cases at brands including M&S, Harrods and the Co-op have highlighted operational risks.

While 42% of charities have taken cyber-related actions, only 34% have increased financial investment in prevention. Almost half of leaders cited an over-reliance on trust as a barrier to safety.

The Economic Crime and Corporate Transparency Act (ECCTA) introduced a failure to prevent fraud offences in September 2025. This affects organisations with over 250 employees, £36m turnover or £18m in assets.

Almost half (48%) of charities understood that their organisation was caught by ECCTA, up from 45% last year.

Fiona Condron, national head of Charities at BDO, said: “The Charity Commission’s Sector Risk Assessment 2025 highlights fraud as a key sector risk and the Commission’s casework indicates that external frauds target those charities with high incomes and are opportunistic in nature. The Charity Fraud Report aligns with this view and emphasises the need for continued vigilance.” 

Tracey Kenworthy, forensic accounting director at BDO, added: “Fraudsters are always adapting and finding new ways to target charities, but the sector’s awareness of the risks has improved considerably. While factors like changes in charity operations or new processes can influence fraud trends, it is essential for charities to remain alert and adjust to the evolving risk landscape.  

“Charities must keep pace with emerging fraud trends to stay ahead of the increased threat to their assets and resources by effectively mitigating risks. The fact that nearly half (45%) of leaders see an over-reliance of trust as a barrier to fraud prevention tells us that there is more to be done in protecting the future of the sector.” 

Sir David Green, chair of the Fraud Advisor Panel, concluded: “The fifth Charity Fraud Report shows that the number of reported frauds has fallen and so too has the number committed by those working for the charities themselves. This demonstrates what can be achieved when sectors work together to raise awareness of the fraud threat. With the highest number of responses to the survey showing just how far the conversation has progressed, charities must ensure they maintain this momentum by working together to recognise and tackle fraud.”