RALEIGH – PayPal has agreed to make reforms to disclosures on its online fundraising platform after an investigation by charity regulators disclosed some inadequacies in the company’s activities.
NC Secretary of State Elaine Marshall was among those from 21 other states and the District of Columbia in announcing an agreement with PayPal Charitable Giving Fund, PayPal’s charitable arm, which puts into practice some safeguards to make sure donors don’t get misled.
Among them, PPGF adopted reforms to its disclosures to ensure that donors know:
- that they are making a contribution to PPGF;
- how long it may take for the charity they select to receive funds from PPGF;
- the implication of a charity not having an account with PPGF.
“This agreement is a win for the giving public and for charities,” Secretary Marshall said Tuesday. “It is absolutely vital that we be able to make informed choices with our charitable dollars and have confidence that our generosity isn’t being redirected without our knowledge.”
Donors can make contributions through PPGF’s website and select specific charities that will ultimately benefit from their contributions. Donors’ contributions are aggregated and distributed to their chosen charities. While PPGF doesn’t collect fees from donors or charities for this service, charities receive contributions more quickly if they maintain accounts with PPGF — a fact that was not adequately disclosed to donors,” Secretary Marshall’s office said in the release.
“In some instances, PPGF redirected contributions from selected charities to similar charities without informing donors.”
PPGF also agreed to notify donors if it redirects their contribution to a different charity. PPGF will provide regulators with future campaign data to ensure the organization is complying with its obligations under the agreement.
PPGF also has agreed to make a payment of $200,000 to the National Association of Attorneys General to go to the NAAG Charities Enforcement and Training Fund to defray costs associated with the investigation and litigation of cases brought by state charities regulators, and provide training and education to those regulators.