AG James announces settlement with charitable arm of PayPal

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NEW YORK — Attorney General Letitia James, along 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.

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.

As part of the settlement agreement, 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. PPGF also 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.

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