Hi SoReTwin, and welcome to the forums!
PayPal is required to comply with regulations regarding the movement of funds for nonprofits.
If you're collecting on behalf of an established charity that does itself have the 501(c)3 status, you can contact that charity to obtain documentation that states that they acknowledge your ability to collect on their behalf. Once you have that, submit it for review.
If you're intending to collect now for a charity that has not yet been approved for the status, it would be a good idea to put that on hold until the designation can be obtained.
I hope this helps!
Olivia
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