Charity Fraud Awareness Week, observed November 2–6, 2026, is an annual international campaign that raises awareness about fraud affecting charities, donors, and the people charitable organizations serve. The campaign encourages charities, regulators, and the public to recognize warning signs, prevent fraud, and protect charitable resources. But avoiding outright scams is only part of protecting your donation.

CharityWatch reminds donors that a charity can operate legally while spending nearly all of your donation on fundraising and other overhead expenses, leaving little to support its charitable mission. This Charity Fraud Awareness Week, we’re encouraging donors to look beyond whether a charity is legitimate and ask a more important question: Is it using your donations responsibly?

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A Scammer, or Just a Bad Charity?

When donors think about charity fraud, they often picture outright scammers: fake charities, stolen donations, and criminals exploiting people’s generosity.

But there’s another problem that deserves just as much attention. Some charities operate legally, maintain their tax-exempt status, and solicit donations from the public while spending almost none of the money they raise on the charitable programs donors intended to support.

The difference between donating to an outright scam and donating to a legitimate but highly inefficient charity may be as little as this: 0% of your donation goes toward charitable programs in the first case, versus 1% in the second.

Both outcomes are terrible for donors and the causes they care about. Yet only one necessarily involves illegal activity.

This Charity Fraud Awareness Week, CharityWatch is reminding donors that confirming a charity is legitimate is an important first step. It should never be the last.

Update: F-Rated Charities Receive Top Ratings & Seals

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Legal Doesn’t Mean Responsible

Many donors assume that charities are subject to government rules requiring them to spend a reasonable percentage of donations on their programs.

They aren’t.

In the 1980s, the U.S. Supreme Court struck down several state and local attempts to regulate charity fundraising expenses based on First Amendment protections. These decisions included Schaumburg v. Citizens for a Better Environment (1980), Secretary of State of Maryland v. Joseph H. Munson Co. (1984), and Riley v. National Federation of the Blind of North Carolina (1988).

The result? A charity can spend 99% of its budget on fundraising and other overhead expenses, leaving just 1% for charitable programs, without necessarily violating any laws.

Free Speech Concerns Limit Charity Regulation

The government can pursue charities that commit fraud, misuse charitable assets, or violate other laws. But regulators generally cannot shut down a charity simply because its fundraising costs are outrageous or its programs receive only a tiny fraction of its resources.

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An IRS Registration Is Not a Seal of Approval

A charity’s 501(c)(3) status does not mean the IRS has determined that it is financially efficient, well governed, or deserving of your support.

Likewise, registration with a state charity regulator generally means an organization has complied with applicable registration requirements. It does not mean the state has endorsed the charity’s spending priorities or independently verified its claims of effectiveness.

Even a clean independent audit doesn’t establish that a charity is using donations responsibly. An audit is intended to provide reasonable assurance about whether financial statements are fairly presented under applicable accounting standards, not whether a charity’s spending decisions are wise or its programs are accomplishing their intended goals.

A charity can check all of these boxes and still be a terrible place to send your money.

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Protect Your Donation, Not Just Your Credit Card

Avoiding outright fraud is essential. But donors should also ask whether a legitimate charity deserves their financial support.

Before giving, verify the organization’s identity and tax-exempt status. Then take the next step: investigate how much it spends on its programs, how much it spends raising money, and whether its financial reporting and governance practices inspire confidence.

Visit CharityWatch to research charities and consult our Top-Rated Charities list for organizations that meet our financial efficiency and accountability standards.

Charity fraud may be illegal, but wasting donors’ money isn’t necessarily against the law.

Don’t settle for knowing that a charity is legitimate. Find out whether it’s worthy of your donation.

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Will You Help CharityWatch Continue Our Important Work?

As the only independent charity watchdog organization in the United States, CharityWatch relies on your support to fund our in-depth research and analysis in order to bring you the unbiased charity ratings and other information you rely on to help you make more informed giving decisions. We are not directly or indirectly funded by nonprofit industry interests.

We hope you will consider making a donation today so that we can continue to speak openly and critically and call out wrongdoing when we see it without concern for special interests cutting our funding. CharityWatch is a small organization and your donations are noticed, needed, and greatly appreciated. Thank you for giving wisely!