You've probably seen many sites on which webmasters try to increase their incomes by adding PayPal Donation buttons to their sidebar.
This is particularly true of programmers who give their software away for free – and ask only that you donate so that they may continue to improve their programs or create new ones.
There's no problem with asking for money.
Where there IS a problem however, is in using the word “Donate”.
Sometime back, I was talking to a fellow affiliate marketer who first had his PayPal account frozen, and then ultimately lost all the revenue therein, simply due to the fact that he had a PayPal Donation button on his site.
Because “donations” are reserved for recognized charities.
My friend's business wasn't a charity and Paypal took serious issue with the fact that he was respresenting himself as such by using the word ‘Donate'.
That's not to say that you can't accept PayPal payments from your blog readers.
What you can use is a text link or button graphic that reads ‘Buy me a beer‘, ‘Buy me a coffee‘, “Support our Blog” or anything else that comes to your mind — just don't use the word ‘donate'.
So, tell me, are you going to be scrambling to get rid of your Donate buttons now?
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Well, it clearly says that the button is for raising funds for a particular cause. I dont think personal website no matter how nobble the intention is, are supposed to use the button, at least not from paypal point of view
And incase anyone missed it, you can only access the funds if you have premier or business account.
David Baxter says
You need to address that question to PayPal, Realrider. As I understand it, this move was initiated by Indian banks rather than by PayPal.
Im using paypal account for exchanging money form USD to my BANK ACCOUNT. In this month money which i transfered to bank account get reversed..
when i searched in net regarding paypal reversed, i get paypal has restricted all indian paypal account holders from tranferring money to their indian banks accounts. i want to know whether its a short term process or it will be permanent. plz help me…
Google SEO Tools says
What is the official paypal position?, where is it posted online?,
Well this is certainly a nice piece of info to know.
Assuming the value of Beer > value of Cofee > value of a Chocolate ( which happen to like the most )
would we get a better chance of getting a chocolate for making some ones day by helping them on useful information .
loving a lot of chocolate would it be realistic to expect a decent amount of them.
Have anyone asked paypal what their policy is? I would say that David Baxter probably is right.
And paypal makes money on all the transactions, so they have an interest in big volume. What do you say to this thread, PayPal?
Paypal froze my account because of this. I run a small personal wheelchair thrill seekers website and slapped a paypal donate button on it. The problem arose when updating my account info I clicked non-profit as it was the closest matching category. Paypal demanded I provide 1. non-profit charity registration 2. tax exemption and 3. business operation documents.
In Australia to achieve 1. alone I need 3+ board members, a secretary, hold at least 1 AGM keeping minutes of all meetings etc. I changed my category to
“Health and personal care” removed the button and explained to Paypal I’m just one bloke with a broken neck trying to give hope and information to quadriplegics, not collecting on behalf of a charity, not a registered business or organisation of any kind. I got the same canned response, please provide documents bla bla. I replied asking for someone who can read english to review my case. Paypal froze my account for 180 days effectively helping themselves to 6 months of intrest on my money, after which they will close my account. No reason given, no appeal avenue, no reversal possible. They wished me the best with my “business.” Idiots!
The ATO, my tax agent, IT lawyer and the media are interested in persuing the matter. I have run very sucessful businesses in the past including my own electrical contracting company. Never in all my life have I had to deal with such gross incompetence as that of Paypal.
Thanks for your information. I intend to use “Donate” for my site but now I have to choose a more suitable word “Support”, I think.
Ooops..I can see a lot of sites that are using the word Donate when in fact they are garnering money for personal use..better be cautious with that word..
Daniel S says
Everyone should beware of Paypal! I sold merchandise on there, after the person got it they reversed the $1,000 charge. Even after I supplied them with legal documentation reguarding the transaction being secured they refunded the money! Now I’m without the money and the merchandise. Sellers beware it is way too easy to reverse charges on Paypal and they don’t care that you loose in every way.
Agni Group says
Thanks for your suggestion. By the way we think we have done right… That means the Paypal Donate button is added proper place in our site..
Please visit our site once.. We are waiting for you..
Josh H says
I have seen people adding the “buy me a beer” to the donate button. Not sure why they had included that. I don’t use the donate button on my blog, but some good information to pass along.
Whew! Just added the buy me a beer plugin and removed the paypal donation button. Glad I caught this post.
I had one of those things on my site but I got rid of it, not because of any problem with Paypal or anyone else. I got tired of the fact that it looked bad that I only had 3 people, and it didn’t look like anyone else was ever going to sign up for it, and frankly, it just didn’t seem as viable as it had when I first hooked it up. So, I gave it up, lost whatever money I was due, and I’m not looking back.
Once again, you nailed it on the head about something niggling my mental to do list! I had lost a ‘donation’ button while changing themes. I used the word donate because it was the word PayPal used to describe the button; clients just wanted a way to pay more if they liked something I did. I wasn’t crazy about the word donate anyway, but if I knew PayPal would take issue I would have thought of another way. So now I’ll create a new button with the word ‘support’.
Vic of BusinessAccent says
That would be a “NO” for me. Good thing I was not able to pursue putting the Paypal for donation on my blog. Thank you for the very useful tip.
As many people want to jump on earning bigger income, many of them went to failure. Great thing there are people like you who guide other people to the right path.
David Baxter says
I think you’re the victim of an urban myth or misinformation. I don’t see anything on the PayPal site that says you cannot ask for donations if you’re not a charity.
The only requirement is that you cannot accept donations claiming to be a charity or non-profit unless you file the appropriate documents with Paypal to support that claim:
“How does PayPal approve charities and nonprofit organizations?
If you are collecting donations as a charity or nonprofit organization, you are required to authenticate the status of your account.”
Matt George says
Actually, I did have my organization listed as a non-profit on Paypal, but I did not have that status registered yet. I was planning on doing it soon, however. So I was I using the donate button on my website. Paypal limited the functionality of my account and I changed it back to an individual person status. They specifically told me not to use the donate button unless I was able to show proper documentation that I was indeed tax exempt. I’m not sure it is was because I listed myself as non-profit or that I was using the donate button. But I wouldn’t use the donate button unless you have your registration finished as a non-profit and can prove it.
JR Riel says
Nope, no urban myth. Unfortunately this has happened to me. I recently received notification that my PayPal account would be restricted if I could not show proof that I am a registered NPO. I was just using the button as way for my family and friends to send me money while living abroad. Anyhow, I don’t have any organization registered as non-profit, so I guess I’m stuck with a frozen PayPal. So yeah, NOT AN URBAN LEGEND.
Following is the text from the PayPal website when selecting which button to add to your site:
Note: This button is intended for fundraising. If you are not raising money for a cause, please choose another option. Nonprofits must verify their status to withdraw donations they receive. Users that are not verified nonprofits must demonstrate how their donations will be used, once they raise more than $10,000.
Not an urban myth.. I have a frozen paypal account as well. I tried to remove my card from it, that didn’t work too. I used the donate button to raise money for some homeless kid I saw posted online. Thought i was gonna do a good thing by helping them but end up being restricted by Paypal. Ya, remove that bloody button…
i never used donate button before i always thought it looks im asking for money when i dont need it, thank alot Rosalind
Keith Elphick says
I guess I’m similar to many starting out on the internet business road. I have the site, registered the domain, got a blog site, chose a niche market, canvassed (and enrolled) in a number of affiliate programs thru Comission Junction and Clickbank,got my Paypal account BUT….
I still haven’t started yet. The reason is that I’ve spent a lot of time trying to figure out how to control my site and contribute to it without relying on a webmaster “friend” of mine. Of course I realize that this has been a very unproductive and unprofitable activity, as I should have just followed the cut and paste approach, as suggested. However, now I’m focused I start from Monday and I will follow your book to the letter. Wish me luck.
Hey… I am developing a blog called “The Meta Blogs” which deals with your situation. There’s no reason you should need a webmaster. Using WordPress is almost as easy as using Microsoft Word. I just started working on this, but it will be a free online “book”. It is a complete guide for novices, with screenshots and everything. It takes you through all the details, from brainstorming a concept, forming an LLC, obtaining a hosting account, obtaining an AdSense account, etc.
So far, there’s only a few pages up. I have a rough draft.
So my question to this community: I am looking to increase the profitability of my site. I am incorporated as an LLC. Obviously, the “donate” button is not good both in terms of being in good standing with PayPal, and also being a for-profit corporation. So if I just put a link to add money to PayPal, with something like “Buy me a beer”, that should be legit as an LLC?
I was surprised to see online that so many people are still looking for a solution in putting a donate button to their web-site even though their web-site is not a charity.
As I remember from years back, Joel Comm used a similar way to your example by saying ”get me a piece of cake” or ”get me the whole cake”. I may not recall it exactly but I found it to be quite an interesting way or requesting gratitude for a service that he was providing.
Thank you for bringing this subject up Ros; just because we see these PayPal donate buttons on the web we should not regard them as the norm.
After all if everyone uses these buttons this could drop the meaning and value for true charitable organisations.
I also decided to put it in my blog, but I don’t know if I can really made an earnings with it. So I didn’t continue my plan. But if that’s the way it is, I’m willing to support the charities using the paypal donation. =D Thanks for the information.
Stephen@Affiliate Review Site Software says
that’s a very useful piece of information. i would not have thought that a Paypal donation button would have that kind of restriction on it. thanks for pointing it out. despite that, i would tend to think you would get a better response rate anyway if you used a phrase like “Buy Me A Beer” rather than “Donate”.
Rosalind, You should use the Twittley button for your blog posts. It is a WordPress plugin and can generate more traffic to you blog as well as post to other Twittley.com users.
Habit Guide says
After reading this, I would remove the ‘donate’ button now if we had one! I always think ‘donate’ is a bad word to use in any case, unless you’re a charity.
The idea of buying someone a coffee to say ‘thanks for the info’ (or the software or whatever) is much nicer and more appropriate. As a user, it feels nicer to buy someone a coffee than to ‘donate’ to their website. ~ James
Liz Gazer says
Wow, I don’t have any ‘donate’ buttons on my blogs but had no idea how fussy PayPal could be. Thanks for the preventative tip Rosalind! I’m sure many people will find this info useful.
If you have a Blogger blog and you have Google Wallet working properly, you SHOULD be able to use the donate button.
Rosalind Gardner says
I think you still risk losing your Paypal account if you fail to follow their rules.