Corruption in charitable organizations
Abuse of non-taxable status
Embezzlement of donations
Illegal activities of philanthropic groups
Intimidation by officials of charitable bodies
Defrauding of charities
Among the most serious abuses associated with charities is that of tax evasion, especially where charities are linked to companies to reduce liabilities. Excessive amounts may be expended by charities in fund-raising thus damaging public confidence in charities. Mismanagement of charity funds and inadequate control and reporting procedures all serve to conceal abuse.
Advantage may be taken of the favourable image and tax status of philanthropic bodies to perpetrate financial frauds, whether through a single organization or by seemingly innocent transfers of funds within a network of such bodies. The disinterest and benevolent character of such bodies may also be used as a front for the dissemination of misleading information or for more or less disguised forms of brainwashing (as in the case of certain cults). Such bodies may also be used as a vehicle for egotistical individuals and personality cults.