posted on July 3, 2010 03:32:45 AM new
Maybe someone on here could explain to me the rules for nonprofit accounts on Paypal. I am on the board of a local nonprofit animal rescue and we attempted to set up a paypal account for donations. We are working on getting our 501 but it is still in the works. Paypal wants our bank statements...2 year plan...501C number plus other info on our board members. I can't figure out why they need all this. Paypal charges the same fees for a nonprofit as a for profit business..there is no discount so why would they need all this info?
I assumed it was possibly because they don't want someone stating they are nonprofit and asking for donations if they are bogus and just want to collect $$ under false pretenses. Nope...that's not it as far as Paypal rep says. I called Paypal and spoke to a rep and I was told they want it because that's the way things are. No reason..just do it. So, that certainly didn't help.
We are happy to share our bank statements..our business plan..and our 501C when it comes in. However, Paypal wants lists of our adopters..what they paid for each dog..and names and personal info on board members. If anyone can figure out why they need this info I would be grateful, cause I'm clueless.
posted on July 3, 2010 07:16:46 AM new
You can't give lists of adopters to PayPal. I think you realize that. It violates your clients' confidentiality and shatters the faith they had in your organization.
PayPal is shameless -- you can't trust them not to relentlessly market to your clients. I'm ditching PayPal on my website because so many people hate them and resent being subjected to PayPal's marketing messages during checkout. Hope to have the new merchant processing in place next week (fingers crossed).
You've probably already thought of this but your website will have to have a privacy policy if it doesn't already. That policy should say you won't pass along personal information to third parties unless it is under very specific circumstances -- then you have to spell out those circumstances. Even if you're only doing live adoption events, people these days use the Web to find animals. I showed my mother-in-law how to use Petfinder and now she's filling her house with rescued Persians.
I'm guessing there's a reason you didn't go with Groundspring? Most of the rescue orgs I know of use them.
posted on July 3, 2010 08:08:44 AM new
capo/fluffy- i use United Bank Card for my in store processing. they have fantastic rates (1.69% for standard cards, though likely higher for online sales). I haven't used them for online, but we are making some important changes to our business this year and will be talking to them about online and a wireless handheld processing machine for when we do shows.
I would check with them. if you mention Shag Midcentury Modern and sign up, they give me a $50 referral. Not that this is important, but it is always nice to get $50.
I spent 6 months wading through endless offers. In the end, ubc has been the best. My processing fees were cut by 60%, which is pretty significant and I have never once had a problem with a transaction, chargeback, etc in the 3+ years I have used them. They don't bother me with upgrades, etc. either.
posted on July 3, 2010 08:42:31 AM new
I don't want to derail capolady's thread, but I'll just mention that in finding a new payment processor the most important aspects were 1) a well-tested and proven integration with Yahoo Stores and 2) highly competitive rates. We polled our fellow Y! Store merchants and came up with 2 recommendations that were very similar.
When I do the Farmer's Market it's cash only anyway, people expect that.
posted on July 3, 2010 09:13:23 AM new
capo- have you asked for a supervisor at paypal?
i find it quite disturbing that they want private information from people not even associated with your organization (adopters) and have a feeling you were getting erroneous information from a CSR.
I would call Paypal back and ask for a supervisor or a specialist that specifically handles non-profits and knows everything about it. The regular CSRs tend to have their head in another world... if you know what I mean.
posted on July 3, 2010 09:28:38 AM new
PayPal wants to verify that the organization is actually an 501C. While all the required proof may seem burdensome, how else could they verify 501c status?
All required information would indicate that the organization exists, is an legal entity in your state, and has actually perfomed the services that are claimed to be performed.
While they may be overreaching with a request for an list of adopters, I believe that some compromise as to privacy concerns could be arranged, once other documents are provided.
posted on July 3, 2010 11:24:22 AM new
Actually, they're not necessarily "overreaching" by asking for the names of adopters and what the "donation" was.
There are a number of different types of 501(c) organizations. The most common types--notably 501(c)(3)-- require that the majority of income for the organization come directly from "members"--organizations that are paying attention (and most are NOT) either don't incorporate under those sections OR make anyone who gives them a donation a short-term member.
It's also not at all uncommon (especially if subject to California, New York or Illinois laws) for banking/financial institutions to ask for information on all of the directors and "members" before granting the organization whatever it is it's seeking from that institution.
A 501(c)(3) is the default non-profit. You need to be dealing with an attorney who is really, truly familiar with ALL the non-profit designations, because it's hell trying to correct a wrongly incorporated entity. Been there, done that--it takes a WHOLE lot of money and several years (potentially, depending on how much money you can throw at it) to fix it.
posted on July 5, 2010 06:34:16 AM new
If you have already filed for non profit status with the state and feds then filing with PP may not be neccessary. I assume you have a bank / checking / CC for your shelter. I would think all you need to do is setup a routine PP account. It would be as if you wanted to shop for and pay for supplies online and the shelter could also receive donations. However, for bookkeeping porposes and it would be easier to keep a record of the donors. I think I would like to get the donations by chk, MO, CC, Cash.
posted on July 5, 2010 09:42:06 AM new
"It's also not at all uncommon for banking/financial institutions to ask for information on all of the directors and "members" before granting the organization whatever it is it's seeking from that institution."
My impression of Paypal from past articles is that they are not a financial institution or bank, and are not subject to regulations of those industries. Maybe that has changed.
