Just over half (52%) of charities expect fraud risk to increase in 2026, according to the latest BDO and Fraud Advisory Panel’s Charity Fraud Report. 

Economic challenges were cited as the biggest factor increasing fraud risk next year, with only 7% believing it would have no impact on fraud risk.  

The interim report, published as part of Charity Fraud Awareness Month, shows 34% of respondents reporting fraud or attempted fraud, down from 42% in 2024. The survey includes responses from 164 representatives from UK-based charities.

However, respondents were concerned about the coming year. In particular, cyber-related fraud caused the most concern, including phishing, ransomware and AI-related attacks. The Fraud Advisory Panel has issued a helpsheet for charities on how to use AI safely, and the fraud risks associated with it. A number of respondents (42%) said they had taken action in response to high profile cyber attacks this year, though 40% said they had taken no action at all. 

Common frauds

The most common type of fraud experienced by charities was the misappropriation of cash or assets (34%), followed by authorised push payment or payment diversion fraud (27%) and expenses and subsistence fraud (25%). 

The vast majority of these attacks were perpetrated by individuals within the organisation (38%), while 23% were committed by people with no connection to the charity. Including suppliers and beneficiaries, the split between insider and outsider threat is roughly 50/50. 

Most of these frauds (57%) were detected by internal controls, though 18% were reported by either internal or external whistleblowers.

Total losses

Of those charities affected by fraud in 2025, 73% experienced financial losses. In total, charities lost between £614,000 and £6.2m due to fraud, with average losses between £11,000 and £110,000. Just 32% were able to recover lost funds. 

Alongside financial losses, charities also lost staff, volunteers and trustees; saw morale fall; lost reputation; and had issues with suppliers and contractors. 

How charities responded

Around 45% of frauds were reported to the police, and 29% of affected charities took disciplinary action, while 13% took no action at all. 

They also took various actions to reduce the likelihood of fraud occurring again, including control changes (57%), policy changes (23%), IT upgrades (11%), reviewed training programmes and/or implemented enhanced awareness programmes (32% in both instances), and conducted fraud risk assessments (45%). Financial investments in fraud prevention increased or stayed the same for 77% of respondents, but 20% put no investment at all into fraud prevention. A lack of resources was cited as the biggest hurdle to overcome in order to prevent fraud (48%).

“The 10th year of Charity Fraud Awareness Week marks a significant milestone in the cross-sector  efforts to tackle fraud against charities,” Matt Field, Head of Fraud Advisory Panel, said. “By working together, private, public and third sector organisations have shown what can be achieved when best practice and information is shared and the profile of fraud, including how to identify, respond and counter is raised through discussion. The growth of this campaign is an example to all and we are committed to building on the fantastic achievements so far by continuing to support charities and the not-for-profit sector across the field of fraud prevention.” 

“The Fraud Advisory Panel continues to run this campaign year on year, as fraud is still having a far-reaching impact across the sector and the risks of fraud are constantly evolving, as fraudsters take advantage of crises as they arise, as well as exploiting developments in technology,” Laura Hough, ICAEW’s Director, Trust and Ethics, added. “In recent times we have seen fraudsters exploit the Covid-19 pandemic, which was swiftly followed by the cost-of-living crisis, seemingly never-ending, and now we are all wondering about the new risks AI will bring. 

“We also believe this campaign remains important, as we are all at different stages on the learning curve of improving our defences to protect our charities from fraud. There are always new aspects to consider as the fraud landscape never stands still.”