Are there any eligibility criteria for accepting paypal donations?
I'm an individual from Singapore currently offering free access to a web application and I'd like to accept donations to support it.
Are there any eligibility criteria to accept PayPal donations?
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Why not just go to paypal.com and look this up? They have a large amount of documentation that will do well to answer your question. – Bwasson 12 years ago
2 Answers
This is actually more complicated than you may think, and I find the PayPal documentation difficult to follow.
PayPal has suspended accounts of open-source software projects for accepting donations. Here is an example: http://tortoisesvn.net/howpaypalscrewsopensourceprojects.html Last time I looked, both Google and Amazon payment systems would not let you accept donations unless you were a registered non-profit. PayPal doesn't have this explicit restriction, but read the article above.
I would suggest that you just do it (many others already do it), but to transfer your money out of your Paypal account very quickly so that if your account gets suspended, you are not losing much.
UPDATE : Just spoke with two PayPal representatives over the phone (+18882211161). You should really be a non-profit to display a "Donate" button, but as a for-profit, you can accept payments if you use a "Pay Now" button. To create the Pay now button, go to creating "Buy now" buttons, and click "Customize text or appearance", then Select button text -> Pay Now. Leave the "Price" field blank if you want contributors to enter their amount.
Personal accounts can display the button, but ideally, you should setup a Business PayPal account for accepting payments.
As Kekito said, while PayPal's Business -> Donations page clearly targets non-profits, at no point does it state that for-profit entities can't accept donations.
An email sent by PayPal in the famous regretsy.com incident confirms that the Donation button can be used by anyone for any reason.
This blog entry claims that you should not use the word "Donate", but instead should use "Buy be a beer". However, a ton of sites use the "Donate" button.
This forum post (at the bottom of the page) is anecdotal advice from a CPA that as a for-profit, you can accept contributions but you have to report them as income, and it's best not to use the word "Donate", because that may mislead contributors.
It's rather lame of PayPal to be so confusing on this topic, so I sent them an email via the Business Donations page. I'll report back with updates.
