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My question is this: Do any of you accept donations via Paypal on your site? If so, what are the ramifications of doing this legally? I couldn't find any specific info on this subject and would be interested in hearing from someone thats actually using this model on their site.
Thanks in advance!
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.
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...
Should I make the donations out to me personally or do I have to open a business dba with paypal?
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.
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!