Couple of things to consider, in order to avoid fees:
Each member would have to have a PayPal Account.
Each account would also have to be verified.
They would need to use the Send Money feature and use funds from either their PayPal Account Balance or their Bank Account. If they use credit cards, either you or the sender will be subject to fees.
Everyone must reside in the same country, else there are cross-border fees.
As for doing what you have in mind is permissible.
What you intend on doing may or may not be considered a violation, depends on how discrete you are and if the activity is looked at by the system as suspicious. If you read thru this policy:
https://www.paypal.com/uk/webapps/mpp/ua/acceptableuse-full
PayPal is quite clear concerning prohibited activities, note section 6 in particular.
Should PayPal determine what you are doing is a policy violation, they will freeze the account which in turn could tie your funds for quite some time.
