16 Jan Jon Cartu Convey: Attorney General Announces Settlement With PayPal Charity
CARSON CITY, NV – Nevada has reached an agreement with PayPal’s Charitable Giving Fund (PPGF) over issues related to their donation process and the allocation of contributions.
The agreement, announced by a coalition of 23 state law enforcement partners, was created to ensure donors receive clear information and disclosures when making charitable contributions via PayPal’s online fundraising platform.
“Charitable contributions are the financial backbone of many worthy causes,” said AG Ford. “Consumers should always have the information they need to make informed decisions about their donations. Today’s settlement with PayPal’s Charitable Giving Fund ensures every donor’s wishes are honored.”
PayPal’s fund, PPGF, is a nonprofit corporation that allows donors to contribute funds electronically to a charity of their choice. Donors’ contributions are combined and eventually distributed to the charities.
Although PPGF doesn’t collect fees from either donors or charities for this service, charities receive their donations more quickly if they maintain a PayPal account, a fact which was not adequately disclosed to donors.
In addition, PPGF occasionally redirected donors’ contributions from their chosen charity to similar organizations but without informing donors of that change, or gaining their consent.
Nationwide, charities regulators joined the effort to investigate PPGF’s fundraising activities, including its disclosures, vetting practices and handling of contributions. To address those concerns, PPGF has 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 versus an unenrolled charity on the PPGF platform.
In addition, PPGF will now notify donors when it reroutes charitable contributions to an organization other than the one donor selected.
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.
In future, PPGF will also provide regulators with timely updates to ensure the organization is complying with the new agreement.
Founded in 1998, PayPal is a worldwide online money transfer and payment service. The company reported more than $15 billion in revenue in 2018. PayPal is headquartered in San Jose, California.
Nevada was joined by attorneys general from the following states and territories in agreeing the settlement: Arkansas, Colorado, Connecticut, District of Columbia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Nebraska, New Hampshire, New York, North Carolina Secretary of State, Ohio, Oklahoma, Oregon, Pennsylvania Texas and Wisconsin.
The Bureau of Consumer Protection represented the Attorney General’s office in the case.