Collecting Donations Thru Paypal When Organization is NOT a 501 (c)(3)

[dreamhome609]

Would appreciate clarification on this issue.  Our organization (Keller Williams Atlantic Shore Cares) does not have non profit status.  However, each year we raise funds for charitable giving in our community.  This year, our annual fundraiser will benefit one of our agents with brain cancer.

Can we collect donations for this cause via Paypal without non profit status?

[skier]

Yes, however, you are subject to the standard transaction processing fees.   In other words, you pay the same fees as any other online merchant.    Registered organizations pay a reduced transaction processing fee.

Regards,

skier

[eri329]

Can you clarify how you set up this type of account? I'd like to set one up for my nephew, who has leukemia, and don't mind paying the standard merchant fees, but I'm confused about signing up so as not to misrepresent myself as a non-profit.

[skier]

It's quite easy.  You open a either a PayPal Premier or PayPal Business Account, ensure that you verify your Account, make sure you sign up for PayPal's Website Payments Standard and use the info here to help get your item button code.

Regards,

skier

[dontdodonations]

I would not suggest using Paypal to collect your donations.

We are a small town baseball league. At the end of February, we held a fundraising event and collected donations.

Those payments were put into hold status for 2 weeks, after which they were all refunded to the people who donated in the first place.

Paypay has yet to offer any explanation of why, except to say that the transactions were on fraud alert status for our (the baseball league's) protection. None of the people were notified, none of their banks were notified. There was no fraud except that perpetrated by Paypal itself.

Now that they have refunded all of the donations (over $2800) and limited our account so we can neither take donations nor withdraw the money in the account, Paypal emails daily asking us to provide, among other things, proof of our 501(c)(3) status. We did not register as a non-profit organization because we aren't a 501(c)(3). At this point, it is irrelevant anyway as they have refunded all of the donations back to the donators.

I spend 3 days making mortified phone calls to donators to re-donate in cash. It was a mess and very embarrassing. We made a complaint to our state Attorney General, who has had dealings with Paypal before (PP was ordered to pay restitution to customers in many states back in 2006). We'll see what happens, if anything.

But I don't suggest that any organization use Paypal to accept donations of any type after our experience.