Behind-the-Scenes Risks: How DAF Giving is Being Exploited

Scammers are finding new ways to target nonprofits through Donor-Advised Fund (DAF) giving. Learn the threats—and how to protect your organization.

Donor-Advised Funds (DAFs) are a growing source of charitable giving, facilitating billions in donations to nonprofits every year. But while this support is meant to fuel your mission, they’re also becoming an unexpected target for fraud.

The troubling truth? Many nonprofits aren’t even aware they’re at risk—until it’s too late.

Fraudsters are getting more sophisticated, and they’ve found ways to exploit the nonprofit ecosystem. These schemes are subtle, silent, and highly effective. They don’t require a breach of your internal systems. Instead, they rely on manipulation and exploitation of weak points in third party systems that you rely on for funding. Here are three of the most common tactics being used today:

1. Impersonation: Faking Affiliation to Reroute Funds

This scheme starts with a simple but dangerous move: a fraudster contacts a DAF provider pretending to be someone from your organization. With just enough public information—like an EIN and a mailing address—they can convincingly request a change of address or contact details.

Once the bad actor reroutes the communication or address, they can redirect grant payments to a location or account under their control. This kind of impersonation is more effective at more places than you’d like to believe, and it’s hard for a nonprofit to detect until you start wondering where your expected funding went.

2. Falsification: Fake Accounts, Real Damage

In another growing scam, con artists enroll your organization in digital payment systems without your knowledge. They then submit forged or doctored bank statements to "verify" an account they control as being affiliated with your nonprofit.

This means future DAF grants intended for you can be digitally diverted into their personal bank account, bypassing your finance team completely. These falsified documents can be surprisingly convincing—especially when verification processes aren’t rigorous and AI keeps getting more powerful.

3. Interception: Old-School Tactics with Modern Stakes

Despite the shift toward digital systems, many nonprofits still receive checks by mail or use physical banking processes. That’s exactly what criminals are counting on.

Fraudsters steal mail—often from unsecured mailboxes—and engage in “check washing,” a method of altering legitimate checks to redirect funds. Others use exposed account and routing numbers found in outdated or unprotected systems to attempt unauthorized withdrawals.

These tactics don’t require technical expertise, just access and opportunity. And they can result in real losses before anyone notices something’s wrong.

Why This Matters

DAF funding isn’t just another income stream—it’s an increasingly critical lifeline for many nonprofits. Grants from DAFs can come from long-standing donors or unexpected sources and can be the difference between meeting budget or cutting back on programs.

When fraudsters infiltrate that lifeline, they aren’t just stealing money. They’re jeopardizing trust, creating accounting headaches, and ultimately impacting the mission you're working so hard to fulfill.

What You Can Do About It

It’s time for nonprofits to take back control. That’s why Chariot is introducing a new solution designed to protect DAFs and nonprofits from these behind-the-scenes threats.

Join us on April 30th at 11am ET for an exclusive live product release to learn exactly how things work and how this will be a game changer for DAF giving.

Register now