By Nicole Siino

 

PayPal Giving Fund is an online non-profit organization that encourages PayPal users to donate to charities of their choice. People can donate to PayPal Giving Fund by using PayPal, eBay, and other web based organization. The philanthropic website is a major donor in the online fund-raising world. Last year, PayPal processed around $86.6 million a year and since its start it has raised $7.3 billion in donations throughout the world.

The Giving Fund allows donors to choose from millions of national and global charities like Save the Children, United States Fund for UNICEF, and Southern Poverty Law Center. If donors are unsure on where to donate, the Giving Fund website provides categories of charitable organizations like Arts and Humanities, Environmental and Protection of Animals, and Civic and Public Benefit. PayPal also sends the donors their receipts for tax purposes. PayPal Giving Fund claims that they deliver the donations to the enrolled charities, however, if the donor choses a charity chosen that is not registered with the Giving Fund website, PayPal, allegedly contacts the charity and informs them that they need to set an account to receive the money. Additionally, PayPal lists charities on the Giving Fund website that are not enrolled with program. This is usually the case with small organizations. The charities can then view their supporters and the amount donated, however, some donors are finding that their donations are not going where they are supposed to.

In December 2016, Terry Kass, a retired lawyer, donated to 13 organizations through the Giving Fund website. Each of the 13 charitable organization had a profile page that included information about the charity and its mission statement. Kass decided to contribute because she received an email from the Giving Fund stating that the organization would waive the usual transaction fee and donate that fee to donors charity of choice. Kass is a board member on the Highland Park-Highwood Legal Aid Clinic and chose to donate $2,500 to the organization. She also donated $200 to the DC Central Kitchen in Washington and verified that the Giving Fund organization listed was the same one she wished to donate to. In total, she donated $3,700 through the PayPal Giving Fund.

At the Highland Park-Highwood Legal Aid Clinic board meeting in January 2017, the executive director reviewed and listed all the donations received in 2016. Kass noticed that her donation was not mentioned and inquired whether her donation was received. Highland Park never received her $2,500 donation. The owner and board member told Kass that Highland Park never registered with the Giving Fund even though it was listed on their website. Furthermore, Kass discovered that the DC Central Kitchen in Washington was also not registered with the Giving Fund. In total, 10 out of the 13 groups that Kass donated to were not registered with the Giving Fund and were unaware that their charities were even listed on the website.

Kass filed a federal class action lawsuit in the Federal District Court of Northern Illinois on February 28, 2017. The lawsuit stated that Kass and thousands of others were mislead to believe that their funds donated through the Giving Fund were actually received by the charities of their choice. If the charity is not registered with the Giving Fund, the website redirects the donation to another charity registered with the website. PayPal denied these allegations and stated that donations are not redirected to other charities. Additionally, they stated they were fully prepared to defend the lawsuit.

Kass believes that the money she donated belongs to the charities and she does not feel comfortable filing her federal taxes until the charities received their donations. The class action lawsuit could cause a huge drop in donations given through the Giving Fund. The website needs to fix this issue and fix it fast. Charities, especially the small ones, rely on donations given, no matter how big or small, and to rob them the money they deserve is extremely unjust.

 

Student Bio: Nicole Siino is a staff member on the Journal of High Technology Law. She is second-year law student at Suffolk University Law School in Boston, Massachusetts. She holds a B.A. in History from Roger Williams University.

Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.

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