Questions About Starting a charity?

The Coffee Shop
1

So some of you who read CyclingNews have probably seen this blog http://www.cyclingnews.com/blogs/cycling-in-benin/the-underdogs-of-tour-du-faso, tracking the development of the Benin national cycling team.

In the entry I linked above, the writer talks about how the team was wanting to get new kits, and they were soliciting help from the outside world via the blog to raise the money to do this.

I have been in contact with the writer of the blog and Peace Corps volunteer, Christoph Herby, about helping facilitate this through my cycling team, and he asked me if I could help by setting up a donation web page of some sort so that people could donate money towards the cost of these new cycling kits.

So, here is where I start running into trouble! I would like to use PayPal to manage the donations. Do I need to get some sort of official charitable status BEFORE I set up a little donation page, or can I go ahead and make a page and open it up for donations? PayPal is unclear about this. Without the aforementioned charity status for this project, am I just looking at PayPal taking extra money per donation transaction, or would I also setting myself up to suffer dire financial consequences come the end of the tax year for having facilitated the receipt and expenditure of any donated money?

Christoph says he has already been contacted by several people who were looking to contribute, so the sooner I can get this up and running, the better, IMHO, so long as I’m not doing anything that would jeopardize the success of raising money for these new cycling kits.

Any insight into this process and/or your experiences doing similar things would be greatly appreciated!

2

Go to the IRS website and download the info about starting up a 501 (c) (3) organization. There is a lot of paperwork involved.

3

Paypal will require documentation if you say its for charity or non profit. If you are doing it for a group that has official status as such I think a copy of it plus something from the organization saying you are collecting for them might suffice.

I would give them a call.

4

I got off the phone with the PayPal people, and they suggested that I just make an email address for people submit the money to through PayPal. I think this is as good as it’s going to get for this week, and at least it is a start.

5

I got off the phone with the PayPal people, and they suggested that I just make an email address for people submit the money to through PayPal. I think this is as good as it’s going to get for this week, and at least it is a start.

Yes that would be the way to go. Just be careful if asking for donations for “charity” or “non profit” and using Paypals logo. That usually catches their interest.

Make it a personal account and not a business one also because if you put it down as one of the things above it will get flagged.

Good luck with the project.