Business Resource Center

Manage your business

Nonprofits and Limitations

I’m a nonprofit, religious, or political organization. What information do I need to provide to accept donations?

To confirm your nonprofit status, you need to provide the following:

  • Evidence of nonprofit registration with any applicable regulatory body such as Articles of Incorporation, IRS 501(c) (3) determination letter, or documentation of candidacy.
  • A pre-printed bank statement or voided check from your account. Starter checks are not acceptable. The organization needs to own each bank account linked to this PayPal account. You can't use a personal bank account.
  • Information about how you intend to use the money (such as donations or membership fees).
  • Mission statement (if applicable).
  • Subordination or fundraising letter (if applicable).

Why do nonprofit, religious, or political organizations need to send you all these documents?

We use these documents to verify that the charity is registered and to ensure that we are meeting our regulatory requirements for the government. Donors also need to know that their money is going to a registered charity organization. We also need to verify that the charity is registered because PayPal offers discounted rates to 501 (c) (3) organizations.

I used the Donate button to collect a payment. Why was my account limited?

The Donate button was created for charity organizations that receive discounted rates. Your account may have been limited because we were waiting for documents confirming that you are a registered charity organization. If you are not a registered charity and need to collect money, we recommend you to use the Pay Now button instead. Learn more about our nonprofits products.

I’m a nonprofit. Do I need to verify my account before I can accept or withdrawal donations from my account?

We make it easy to set up your site to take payments but to withdraw more than $500 a month you will need to verify your account. You can do this by linking and confirming a bank account and adding your EIN (Employer Identification Number).

How are these documents used?

We need to make sure our members are donating to registered charities and we are meeting our regulatory requirements for the government.

What is needed?

How information is used

Registration with any applicable regulatory body governing your jurisdiction:

  • IRS 501(c) (3) determination letter or
  • Documentation from any applicable jurisdiction

Verify that your nonprofit is registered.

Documentation of candidacy:

  • Paperwork showing that you are running for political office

Verify that you are registered as a candidate for office.

PAC (Political Action Committee):

  • Form 8871 – Political Organization Notice of §527 Status or
  • Form 8872 – Political Organization Report of Contributions and Expenditures or
  • Form 990 – Return of Organization Exempt From Income Tax or
  • Form 990-EZ – Short Form Return of Organization Exempt From Income Tax (or other designated annual information return) or
  • Form 1120-POL – U.S. Income Tax Return for Certain Political Organizations (annual income tax return)

Verify that your political organization is registered.

Bank Account Information:

  • Pre-printed voided check or
  • Pre-printed bank statement or
  • Pre-printed deposit slip or
  • Letter from bank (new account) or
  • Signature card or
  • Other pre-printed bank documents that include the following information: bank name, organization name, and at least 4 digits of the bank account number

Verify that the money will be distributed to the charity. The bank account name should be the same as the nonprofit name.

Formal mission statement if you are a IRS 501(c) (3)

Understand the purpose of your charity and how the PayPal account will be used.

Subordination or fundraising letter

Verify that you have received the nonprofit’s authorization to collect money on their behalf.

How money will be used

Verify that the money will be used for charitable purposes.

What is a subordination letter?

A letter signed by a nonprofit organization confirming that you’re authorized to raise money on their behalf. The letter should be on the organization’s letterhead and signed by an officer/director/trustee of the organization. Please include the following information in the letter:

  • Your name.
  • EIN/TIN number of parent organization (if necessary, group exemption number).
  • Officer/director/trustee’s contact information including: name, signature, email address street address, and phone number.

What is a fundraising letter?

A letter signed by the organization that you are raising money for which confirms that you are authorized to raise funds on their behalf. The letter should be pre-printed on the organization’s letterhead and signed by an officer/director/trustee. Please include the following information in the letter:

  • Your name.
  • Nonprofit’s tax number, taxation status, and purpose.
  • Officer/director/trustee’s contact information including: name, signature, email address, street address, and phone number.

What is the difference between a fundraising letter and a subordination letter?

The documents have a similar purpose but they include different information.

  • A subordination letter includes the EIN/TIN number of the parent organization.
  • The fundraising letter includes the nonprofit’s tax number, taxation status.

How can charities protect themselves from fraud?

  • Know your donors and where your money comes from. Call to thank new and unknown donors that make large contributions. Monitor irregular donations and contact the donor if you don’t feel the money is legitimate.
  • Host a website with information about your charity and tell your community how you are using their donations.
  • Monitor the internet for fake websites that are using your charity’s name. You don’t want your contributors to accidentally donate to a fraudulent web site.
  • Keep an up-to-date list of the people who are authorized to accept money on your behalf and limit access to the list.

Provide employees with limited access to financial information. Only give employees access to the information they need to do their job. Use PayPal’s manage users functionality to set-up employee privileges. You can decide how much access to give each of your employees.

  • Report any fraudulent donations using PayPal to compliance@paypal.com so PayPal can take appropriate action.

Money Service Provider

What documents do financial services or money service providers need to provide to remove a limitation?

Log in to the Resolution Center or email us at compliance@paypal.com and provide the following information:

  • List of your products and services.
  • Detailed explanation of your business model.
  • List of the URLs or websites where you receive payments.
  • Description of how you intend to use PayPal including the payment methods (donations, membership fees, etc.) you will be accepting.

After we receive the information, we’ll review it and email you in 3-5 business days with an update on your account.

Trust Fund or Trust Account

Can I set up an account in a trust fund or trust account?

We review trust funds on a case-by-case basis. Once we are ready to review your account, we will send you an email requesting information about the trust such as:

  • The purpose of the trust.
  • The beneficial owner(s) of the trust.
  • List of authorized parties on the trust.
  • The sources of the money going into the trust.

Your account will be limited until we complete the review.