PayPal Lawsuit Shows a ‘Wild West’ Reality in 3rd-Party Online Fundraising

PayPal Lawsuit Shows a ‘Wild West’ Reality in 3rd-Party Online Fundraising

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"I think these portals are both a boon and a potential problem," said Jennifer Chandler, vice president of the National Council of Nonprofits. "Lack of transparency over all is a concern."

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Because so many charities don’t have online giving through their own websites, it’s not practical to advise them to steer clear of third-party giving platforms, Ms. Chandler says.

And giving platforms have benefits, including added exposure for charities, Mr. Taylor says. Some platforms offer matching donations; Ms. Kass was attracted to using the PayPal Giving Fund in part because the company offered a 1 percent match during the holiday campaign.

But both Ms. Chandler and Mr. Taylor advise charities to use caution when dealing with third-party platforms, especially those that may use nonprofits to burnish their image without providing a fair service.

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If charity leaders discover a platform is raising money in their organizations’ name without their permission, they should immediately contact the platform to learn more, Ms. Chandler says. It could be an opportunity to forge a partnership with a well-meaning organization.

However, if it seems like a case of fraudulent fundraising, she recommends charities file a complaint to state charity officials.

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The Chronicle of Philanthropy
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