Charities and the non-for-profit sector play an important role in New Zealand’s economy. However, several charity scandals in the last two decades have affected potential donors and their trust in New Zealand’s charities. Consequently, charities need to adapt their ability to afford structural and strict internal control environment by improving internal controls. This research aims to evaluate internal controls in charities in New Zealand and explore the challenges in implementing them. This research also recommends internal control strategies and solutions that can be adapted to the particular needs and requirements of charities. This research uses qualitative methods, in which data collected from previous BDO fraud surveys and in-depth interviews from five charity staff members is used to analyse results. This research found that small charities in New Zealand lack internal controls, which may cause fraud losses to their organisations. It also found four challenges that charities face in implementing internal controls in New Zealand: financial difficulties, technological difficulties, lack of staff, and specific accounting knowledge. To solve these challenges, this research recommends some strategies and solutions that are practical and efficient for charities to prevent fraud, such as control review, code of conduct, risk assessment, and monitoring processes. The researcher recommends charities should choose the control practice that is the best match to develop their organisation’s objectives.