Hi Anthony, welcome to Webmasterworld. If you look at the top right of most pages here, you will see a "subscribe..." link. Webmasterworld is taking money through Paypal. I don't know about any serious drawbacks, but maybe Brett Tabke will step in.
The only negative is not enough people use it!
You may want to look at some affiliate programs that complement your target audience and also put a few ads on the pages.
Brett, you there? Can you give any insight on this one?
I've worked with thousands of companies on the web. Of all of those, PayPal and only PayPal has been 100% flawless perfect. Not only that, but the service and tools are second to none. I know they don't like to use the B word in relation to paypal (bank), but they work better than any online banking system I've used.
There are 25million people that use PP daily. There is a whole demographic there you will find with no other online service. On some sites we've tested side-by-side and pp routinely beats other payment processors by 10% to 20% or more.
There is no other company that I'd recommend so highly. There is a level of trust will PP that I find with no other online service. They've been the same for me since the day I started with them. The kicker is that they are getting even better and adding more features.
Slightly offtopic, but look for a nice review and run down of the PP developers conference I was recently at in a few days here on WebmasterWorld.
I do think that Anthony was also asking about legal counsel regarding that topic.
My experiences with the donations system was also quite positive. You'll definitely not get rich from these donations but on the site we ask for them they pay for the hosting and a bit above that but this site is hightraffic, nearly adfree and very userfriendly.
For the legal point on it I'm not too sure. If you are operating the project out of your own pocket I wouldn't really care about any taxes if the donations do not exceed the real costs of running the website by far. The cost of business operation is free from income-taxes in every country and if you don't offer them any tax-deductable receipt you can't do anything wrong.
I can agree with Brett on his experience with paypal, except that working with them as a european is pretty much a pain but it's getting better slowly...
thats exactly what I was asking. I heard or read somewhere that if you except donations you must register as a non profit in every state. I think the non profit and donation things are two different beasts. I simply want to make a little money to maintain my site and pocket a little if possible.
Should I make the donations out to me personally or do I have to open a business dba with paypal?
I THINK you can accept donations without being a non-profit. I think the kicker is that if you are operating as a charity and say you're a charity and say that the money is going to cause XYZ, THEN you have some legal requirements to fulfill. But if you're just operating a website and saying, "Help me cover my costs," then you're OK (somebody correct if I'm wrong on this).
Surely if the law on this were different, Paypal itself would have restrictions on who may use their "donation" setup (e.g., "You must be a registered non-profit or charity"), as Paypal would want to avoid the legal entanglments involved in its users using their system "illegally".
I was blown away by Paypal a few months ago. I was looking for a setup that would let me collect recurring subscriptions. Went to Paypal and there was exactly what I was looking for. Hard to believe it's that easy.
That's not completely the point.
Most charities allow you to give _tax_ _deductible_ donations but this is simply something that only a registered charity can offer.
fliks has it-
DONATIONS are fine. The only time you need to worry about legal issues is 1) for political campaigns and 2) if they want to write it off. For write-offs, the receiving party MUST be a registered non-profit.
We use PayPal donations on our dance site to accept in-direct donations for MDA. They still charge the regular fee and it still goes in just like anything else!
Do you have to pay taxes from these donations?
you shouldn't but it may vary from state to state. In NC 'service' is not taxed, but a physical product or shipping is.