If Your Group Is Enrolled In PayPal’s Charitable Giving Fund, You Need To Know About This Class Action Lawsuit

The 3/1/2017 edition of Nonprofit Quarterly published an article by Michael Wyland that examines a class action lawsuit “alleging that PayPal’s Charitable Giving Fund misrepresented its operations and its relationships with most U.S. nonprofit organizations and took donors’ gifts intended for specific charities and directed them without consent to charities of PayPal’s choice.”

Adaptistration People 157According to the suit, PayPal solicits potential donors to contribute but haven’t been telling them that donations would only reach an intended recipient if that organization maintained a PayPal business account and registered with PayPal Charitable Giving Fund.

Using the search function at PayPal’s giving platform page, I did a quick search for “symphony” in the “Arts and Humanities” and turned up hundreds of results.

Consequently, do yourself a favor today and search for your organization to confirm if it is included in the list of potential recipients and if so, you may want to confirm whether or not you qualify to receive donations or wish to be removed from their list.

Likewise, ask your organization’s legal counsel to review the complete complaint (h/t Nonprofit Quarterly) and recommend any specific course of action.

If you’re an individual donor, the article points out that you could end up in a bind if you report your gift as a charitable deduction but that organization doesn’t meet PayPal Charitable Giving Fund’s requirements.

Among other reasons, this lack of transparency is a problem for donors because the donation process leads to a screen displaying a printable receipt showing the gift amount and the intended recipient charity. The accompanying text advises donors to use the receipt for tax purposes. However, if the intended charity isn’t among the 29,000 with which PayPal and PayPal Giving Fund have a relationship, the funds won’t go to the intended charity and the donor’s tax receipt will be inaccurate.

Search for an organization at PayPal’s giving platform page

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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