A survey of charities suggests a decline in those affected by fraud but highlights an enduring “significant concern” about internal risk.
The Charity Fraud Report’s five-year review states that 34% of the 164 UK charities surveyed had reported incidents of fraud or attempted fraud in the last year, down from 42% a year earlier.
Of those charities that experienced fraud last year, 73% suffered financial losses as a result, a decline from 84% in 2024.
The survey found that 38% of fraudsters operated within the victim charity – as staff members, volunteers or trustees – while 23% were outsiders.
“This highlights that internal risk remains a significant concern,” the report says.
Some 45% of frauds were reported to the police, down from 52% in 2024, while internal disciplinary action fell from 45% to 29%.
Most types of fraud, including misappropriation of cash or assets, payment diversion and staff expenses fraud, fell from the year prior.
Financial misreporting, however, more than doubled to 11% from 5% the year before.
Failure to prevent fraud offences were introduced in September 2025 and apply to large organisations.
Four-fifths of respondents in scope of the legislation took action before it came into effect, the report found.
Increased fraud threat feared
Audit firm BDO and the Fraud Advisory Panel analysed data from 164 charities, most of which had an annual income of more than £10m.
Based on its sample, the report estimates that the charity sector overall experienced up to 18,000 frauds in the last 12 months.
More than half of charities surveyed said they expected the threat of fraud to increase this year.
Matthew Field, Fraud Advisory Panel head, said the report showed good progress but encouraged charities to take a proactive stance on fraud.
“Charities are becoming increasingly aware of the fraud threat and how to respond to it,” he said.
Fiona Condron, BDO’s national head of charities, said: “The Charity Commission’s casework indicates that external frauds target those charities with high incomes.
“The Charity Fraud Report aligns with this view and emphasises the need for continued vigilance.”
