PayPal Settlement about its online platform Charitable Giving Fund with New York state AG and 22 other law enforcement plaintiffs

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Attorney General Letitia James, together with 22 state law enforcement partners, has reached an agreement with PayPal Charitable Giving Fund, Inc. to ensure donors receive adequate information and disclosures when making charitable contributions through the company’s online fundraising platform.

“Every individual who chooses to donate funds deserves transparency and honesty throughout the process,” said Attorney General James, co-chair of the charities committee for National Association of Attorneys General. “My office is committed to ensuring that hard-earned dollars go where intended, and that no entity takes advantage of the generosity of New Yorkers.”

PayPal Charitable Giving Fund, Inc. (PPGF) is the charitable arm of PayPal, Inc. PPGF is a 501(c)(3) nonprofit corporation that allows donors to contribute funds electronically to PPGF and to select a charity to receive their contribution. PPFG then aggregates all the contributions and distributes them accordingly to the various charities. PPGF does not collect fees from donors or charities for this service; however, a charity receives contributions more quickly if the charity maintains a PayPal account, a fact that had not been adequately disclosed to donors. And in some instances, PPGF redirected donors’ contributions from the charity selected by the donor to other organizations with similar purposes without informing donors.

Charities regulators nationwide joined the effort to investigate PPGF’s fundraising activities, including its disclosures, vetting practices, and treatment of charitable contributions. To address the states’ concerns, PPGF agreed to adopt reforms to its disclosures to ensure that donors know:

  • that they are contributing to PPGF;
  • the timeframe in which a selected charity may receive funds from PPGF; and
  • the implication of being an enrolled rather than an unenrolled charity on the PPGF platform.

PPGF also agreed to notify donors when it redirects a donor’s charitable contribution to an organization other than the one selected by the donor. PPGF will provide regulators with future fundraising campaign data to ensure the organization is complying with its obligations under the agreement.

Finally, PPGF agreed to make a payment of $200,000 to the National Association of Attorneys General for deposit into the NAAG Charities Enforcement and Training Fund. This Fund has been established to defray costs associated with the investigation and litigation of cases brought by state charities regulators and to provide training and education to those regulators.

Today’s settlement helps ensure that online donors receive the information they need to make informed decisions about their charitable contributions.

Today’s settlement is led by the attorneys general of Connecticut and Nebraska, and, along with New York, includes the attorneys general of Arkansas, Colorado, District of Columbia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Nevada, New Hampshire, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, and Wisconsin, as well as the Secretary of State for North Carolina.