How to Prevent Credit Card Fraud at Your Nonprofit

As a nonprofit, every dollar matters. You work hard to earn the trust of your donors, and the last thing you want is for that trust to be shaken by credit card fraud.

Unfortunately, while payment technology has made in-person transactions much safer, online fraud still poses a serious threat.

Fraudulent activity can cause a lot of problems for your nonprofit, costing you time, money, and potentially putting donor bank accounts at risk.

Since the switch to chip-enabled credit cards, counterfeit fraud in the U.S. dropped by 70%, according to Visa. That’s a huge step forward—but this added protection only applies to payments made in person.

For online donations and digital transactions, the heart of many fundraising efforts today, fraudsters can still find ways to take advantage.

Here’s what this guide breaks down:

• The common types of nonprofit credit card fraud
• Why nonprofits are often at greater risk of credit card fraud
• How to prevent credit card fraud at your nonprofit
• Smarter digital payment processing options to help curb issues
• How to stress less about fraud prevention (while raising more!) with the right fundraising platform and payment processing

By understanding the risks and putting safeguards in place, you not only protect your organization’s finances but also strengthen the trust and confidence your donors place in you.

After all, protecting their generosity is just as important as inspiring it.

But here’s another important layer: fraud prevention doesn’t happen in a vacuum.

The payment methods you offer donors (like credit cards, ACH, mobile wallets, or apps), can either add vulnerabilities or minimize them. By thinking strategically about both security and donor choice, you create a giving experience that is both safe and donor-friendly.

🥸 Did you know? The 4aGoodCause platform makes giving effortless for your donors (and you). Your stories inspire the giving, but we make fundraising easy with the right tech. See it for yourself.

“We are a small nonprofit with minimal staff so a platform like 4aGoodCause has provided us with a professional, streamlined system for online donations.” — Melanie R Carroll, Executive Director at Angel Flight SC

3 types of common nonprofit credit card fraud

With an increased number of consumers making financial transactions online (combined with numerous security breaches in recent years), online fraud is a serious issue your nonprofit should keep tabs on.

For example, a credit card hacker could use stolen credit card information to contribute a gift on your donation or e-commerce page for various malicious reasons, like card testing.

Here are 3 common types of nonprofit credit card fraud that you should stay alert and aware of:

• Card testing
• Embezzlement
• Refund fraud

Card testing

Card testing is where a bot (or a team of humans) spams your donation page (often via an automated process) with donations every few seconds, looking for a credit card hit.

Sometimes, these numbers aren’t from stolen cards; they’re just random number combinations and sequences.

For this type of scam, attackers are looking for information pending the acceptance of the card payment.

If the credit card payment is accepted, the attacker knows the card number is valid and they then can sell it to other individuals or groups or use it in other fraud schemes.

Embezzlement

Another internal threat nonprofits sometimes face is embezzlement, when employees or volunteers divert funds away from the mission.

Strong internal controls, such as regular audits, staff training, and separation of duties, can reduce these risks and protect donor funds.

Regular financial reporting to leadership and board members not only improves transparency but also helps spot irregularities before they become larger fraud issues.

Refund fraud

Another common fraud scenario that can plague nonprofits is refund fraud, when an attacker makes a large online donation using a stolen card, then calls the nonprofit claiming that the donation was made in error.

(For example, a fraudster might say, “I accidentally donated $2,000 when I meant to give $200”), then demands a refund paid to a different account or card.

Fraud doesn’t just mean losing donations; it can also lead to costly chargeback fees from your processor, which further eats into your fundraising revenue.

Accidental or fraudulent reimbursement claims from staff or volunteers can also drain resources when internal oversight is lacking.

Why are nonprofits at greater risk than other organizations for this type of fraud?

Here’s why nonprofits are often victims of this sort of fraudulent activity: Many nonprofits are unaware of these types of issues and may not be monitoring their credit card processing closely enough (if at all).

This is especially true for nonprofits with smaller, more limited staff and funding. Plus, cardholders rarely question a donation on their bank statement—so oftentimes it’s reported long after the charge, if ever.

Additionally, many nonprofit directors don’t feel the need for fraud safeguards because they usually aren’t selling physical goods.

Fraudulent activity can cause a lot of problems for your nonprofit—costing you both time and money you don’t have. Your team has enough to do without adding payment security monitoring to their plates.

But there are ways you can prevent it, protecting your donors and all your hard work.

How to prevent credit card fraud at your nonprofit

Here are three anti-fraud guidelines that you need to implement to help protect your nonprofits from credit card fraud:

1. Configure rules in your payment gateway to detect and prevent fraud
2. Vigilantly monitor your account
3. Deploy reCaptcha

Credit card fraud prevention can feel technical and overwhelming, but 4aGoodCause is here to help support you every step through our easy-to-use fundraising platform and best-in-class customer service.

1. Configure rules in your payment gateway to detect and prevent fraud

• Be sure to use payment systems that allow you to monitor and decline suspicious transactions. For example, 4aGoodCause clients can (and do) use the Advanced Fraud Detection Suite from Authorize.net for this exact purpose.
• Ask for the card’s security code (aka the CVV), which is the three or four-digit number on the front or back of major credit cards. This helps to show that the cardholder is actually physically possessing the card at that moment.
• Use an address verification system (aka AVS), which will verify that the person who is using the card knows the address on file for the card. One important thing to note: while this is a good safeguard, it is not sufficient by itself. In other words, legitimate donors can make mistakes, and AVS doesn’t work well for addresses outside of the United States. Make sure that your donation page has error messaging specific to AVS issues to help mitigate this issue.
• Limit the number of transactions that can come from any one computer in a certain time period (say, an hour). This “rate throttling” can help prevent card testing, as bots will submit multiple donations from the same computer quickly in succession.
• Set a minimum donation amount. Many automated bots try to submit just $1 donations. Even setting the minimum at $2 per donation can help offset this.
• Hold transactions for review. If you limit the number of transactions per hour from the same computer, make a rule to hold any transactions that exceed that number.
• Look for red flags such as repeated small donations from the same IP address, mismatched billing addresses, or excessive refund requests.
• Display an on-screen message to the user/thief that the transaction will be “held for review.” This prevents the card testers from knowing if the card they are trying to use is accepted or declined, valid or invalid. This will normally encourage them to give up.
• Use multi-factor authentication where possible, to ensure only legitimate staff can access sensitive financial systems.

2. Vigilantly monitor your account

If you are able , monitor transactions through your payment processor as closely as possible. (If you aren’t able to do so, prioritize this in future planning).

One way you can do this is to set up email alerts to alert your organization of all suspicious transactions taking place. Appoint yourself or a specific member of your staff to take responsibility for these.

A word of caution: Make sure to respect the balance between vigilance and paranoia, as you don’t want to frustrate or confuse legitimate donors.

💡Pro tip: Having a trusted fundraising platform with multiple secure ways to pay, like 4aGoodCause payment processing, can help.

3. Deploy reCaptcha

You know those funny little puzzles you get sometimes when visiting a website or attempting to make an online transaction?

Well, if your nonprofit has been targeted by heavy automated card testing that doesn’t stop after a handful of attempts, deploy reCaptcha as another safety measure.

This forces users to prove their legitimacy and humanity, thereby stopping automated, robotic submissions. 4aGoodCause clients have the opportunity to turn this tool on and off as they see fit for their donation pages.

Credit card fraud is serious, confusing and can be detrimental to organizations and nonprofits everywhere.

Thankfully, the good guys learn more and more every day about this kind of activity, and that’s where 4aGoodCause comes in.

Currently, 4aGoodCause supports both Authorize.net and Stripe as secure payment processors. You can choose to acquire a pyment processor directly through us, your fundraising platform itself, if you don’t already have a payment provider.

Overall, payment processing for nonprofits can be really confusing.

But 4aGC makes it simple, and we also offer free payment processing audits to help you understand what options might be the best for your organization (and save you the most fees!).

You can book a demo meeting here and let us know you’re interested in the payment processing audit.

Need more info? Check out our guides below on the fraud protection options offered for each payment gateway:

• Authorize.net: Advanced Fraud Detection Suite (AFDS)
• Stripe: Radar

Get in touch with us if your nonprofit is experiencing issues with fraudulent activity; we’re here to help.

Bonus: Encourage your donors to stay alert

Fraud prevention isn’t just about what your team does behind the scenes. Donors themselves can help by staying alert.

Encourage them to:

• Always give through your official website with direct links to your online donation forms, not through links in unsolicited emails or texts.
• Be cautious of high-pressure donation requests, especially during crises.
• Watch for inconsistencies or lack of transparency from organizations claiming to be nonprofits.

Educating your supporters builds a partnership in fraud prevention and helps preserve trust on both sides.

Beyond fraud prevention: Smarter payment options

Protecting your nonprofit organization from fraud is essential, but just as important is offering donors payment options that naturally increase security and reduce costs.

The right mix can improve donor retention, lower processing fees, and add layers of fraud protection.

Donor information and donation processing should always be made to be safe, secure, and effective.

Here are a few strategies to consider:

1. Encourage ACH/eCheck donations
2. Offer mobile wallets (Apple Pay, Google Pay)
3. Provide peer-to-peer options (PayPal, Venmo, Cash App)
4. Build and protect monthly giving programs

1. Encourage ACH/eCheck donations

These electronic bank transfers typically carry much lower processing fees than cards, and they’re harder for fraudsters to exploit. They’re especially valuable for recurring donations.

2. Offer mobile wallets (Apple Pay, Google Pay)

Digital wallets use built-in tokenization and biometric verification, which adds another layer of donor protection against fraud.

💡 Learn more: How to Add Google Pay and Apple Pay to your Donation Page (includes video)

3. Provide peer-to-peer options (PayPal, Venmo, Cash App)

These can be familiar and convenient for donors, but keep an eye on refund fraud risks. Pairing them with your fraud rules (like transaction limits) can help.

4. Build and protect monthly giving programs

Recurring donations stabilize your revenue, but they also create opportunities for fraudsters if payment information changes.

Monthly giving program tools like account updaters and fraud monitoring help keep donor gifts secure without interruption.

⭐️ What if there’s an easier way to maximize donations? There is. It’s called recurring monthly giving, and it generates 2.4X more revenue on average than one-time gifts. And our Monthly Giving Toolkit simplifies the whole program.

Stress less about nonprofit credit card fraud with 4aGoodCause

Credit card fraud prevention may feel overwhelming, but it doesn’t have to be a source of anxiety for you and your team.

What if you could spend less time on fundraising logistics and more time on the mission… all while knowing your nonprofit is safe from scammers? With 4aGoodCause fundraising software, you’ll get that peace of mind.

By combining proactive fraud detection tools, vigilant monitoring, and donor education, you create a safer environment that protects both your mission and the generosity of your supporters.

We make sure every part of your donor’s online giving experience is built with both donor trust in mind.

That way, you can focus on inspiring generosity—while our secure online fundraising platform protects it.