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Using Class Creator's payment clearing system as a non-profit
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Thursday, August 23, 2012 at 9:46 AM
Our Alumni Association is incorporated in Virginia and we are currently in the early stages of applying for a 501c3 from the IRS, as we hope to eventually accept tax-exempt charitable contributions for student awards and scholarships, and possibly for other charitable deeds in our community. I've been reading forums here by other administrators describing many difficulties and hurdles in dealing with PayPal on this topic. My question is, can we meet all our needs for fundraising through Class Creator's payment system? I did see where I can manipulate the "reunion store" items for accepting donations--which is perfect! But are we required to provide any "proof of non-profit" status to Class Creator? What requirements, if any, does the IRS place on Class Creator for reporting/managing non-profits? Is there anything else I should know, or ask about? Thank you! In a separate note, does Class Creator have any partnerships with any shipping services that can integrate with the reunion store? Thanks again, Terry
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Thursday, August 23, 2012 at 10:10 AM - Response #1
The donation features on our system are available without restriction. We do not in any way guarantee to your site visitors that your collection of donations is legitimate (or otherwise). Any issues with the IRS are strictly between you and them. We are merely a service provider, and are in no way liable for the tax implications or any reporting of your use of the services we provide. As I understand it (and this should be taken with a grain of salt as I am not a lawyer -- any serious questions on the matter should be taken up with a tax attorney), ad hoc organizations such as class reunion committees may collect and spend monies without incurring any tax burden so long as no one in the organization profits from the process and all labor is undertaken on a voluntary basis. We do not have a relationship with any shippers, as we do not ship anything but electrons, and electrons require no packaging or postage.
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Thursday, August 23, 2012 at 10:42 AM - Response #2
I went the PalPal Route as a non profit. It took a couple of days to verify, and we were set up. The account is a business account as opposed to a personal account. Reports are downloadable daily, weekly or monthly. (The % saved in service fees was, to our class, worth the extra accounting, and manual entry). Barbara "Ritter" Paris
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Thursday, August 23, 2012 at 10:44 AM - Response #3
Thank you for your quick reply, Eric. You confirmed what I suspected, but I just wanted to be sure. (I wonder why PayPal takes a position for requiring proof if they are not liable?) Re: shipping, "...we do not ship anything but electrons..." LOL! I was referring to our class sites' shipping needs for store items sold online (tee shirts, mugs, etc). Probably we will choose to outsource merchandise handling (sales and shipping) through direct vendors, like Cafe Press. I'd prefer to handle all our financial transactions in one place, but we don't want the task of filling and shipping orders. Maybe Class Creator will one day consider partnering with a third party vendor for handling shipping services. Thanks again for your help.
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Thursday, August 23, 2012 at 10:55 AM - Response #4
Thank you, Barbara. What information did you have to provide to PayPal? And what advantage do you see in using PayPal over Class Creator's payment system? I consistently read elsewhere in these forums that PayPal required proof of non-profit status, prompting at least one admin to note they had to seek a "Determination Letter, through filing an IRS Form 8718 AND a fee of $300." It seemed as if all admins agreed that their PayPal accounts (the non-profit business types) were frozen until this "proof" was provided--or until they changed the account type from non-profit to "service". From Eric's post above, I understand Class Creator makes no distinction between account types. Barbara Paris wrote: I went the PalPal Route as a non profit. It took a couple of days to verify, and we were set up. The account is a business account as opposed to a personal account. Reports are downloadable daily, weekly or monthly. (The % saved in service fees was, to our class, worth the extra accounting, and manual entry).
Barbara "Ritter" Paris
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Thursday, August 23, 2012 at 12:21 PM - Response #5
Barb, Our Alumni Association is incorporated in Virginia and we are currently in the early stages of applying for a 501c3 from the IRS, as we hope to eventually accept tax-exempt charitable contributions for student awards and scholarships, and possibly for other charitable deeds in our community.
I've been reading forums here by other administrators describing many difficulties and hurdles in dealing with PayPal on this topic. My question is, can we meet all our needs for fundraising through Class Creator's payment system? I did see where I can manipulate the "reunion store" items for accepting donations--which is perfect! But are we required to provide any "proof of non-profit" status to Class Creator? What requirements, if any, does the IRS place on Class Creator for reporting/managing non-profits? Is there anything else I should know, or ask about? Thank you! In a separate note, does Class Creator have any partnerships with any shipping services that can integrate with the reunion store? Thanks again, Terry
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Thursday, August 23, 2012 at 1:20 PM - Response #6
Hi Terry,
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Thursday, August 23, 2012 at 2:19 PM - Response #7
Thank you, everyone. Barbara, I don't quite follow the advantage in the downloading/uploading payments between CC and PP accounts, or the benefit of a PP debit card. We have a business bank account for receiving direct deposits and a debit card on that account for our expenses. The IRS non-profit 501c3 status is desirable if it means we can solicit tax deductible contributions from our members, but we are currently weighing that option against the costs to set it up. As far as I can tell, our best option may still be with Class Creator's payment system--for the simplicity, reporting, and in-house support provided. It looks like we may break even or possible save on fees as well.
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Thursday, August 23, 2012 at 3:17 PM - Response #8
OOPs..I called you Barb...sorry Terry.... I hope this helps. Thank you, everyone. Barbara, I don't quite follow the advantage in the downloading/uploading payments between CC and PP accounts, or the benefit of a PP debit card. We have a business bank account for receiving direct deposits and a debit card on that account for our expenses.
The IRS non-profit 501c3 status is desirable if it means we can solicit tax deductible contributions from our members, but we are currently weighing that option against the costs to set it up. As far as I can tell, our best option may still be with Class Creator's payment system--for the simplicity, reporting, and in-house support provided. It looks like we may break even or possible save on fees as well.
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Thursday, August 23, 2012 at 3:49 PM - Response #9
It is so good to have you back, Darlene! This note is for you... I accepted donations and registrations through PayPal until I found Class Creator. I changed the reunion registrations to Class Creator and left the donations going to PayPal. I've had the same account with PayPal well over ten years. What I did not like was having the funds in my personal account at PayPal. Now that Class Creator has Reunion Planner set for us to accept donations, I highly recommend that to everyone. If I ask for donations on my alumni site, I will be using Class Creator. However, I would definitely suggest you add an *(asterick) with the small print regarding the fee. Find the right words to add that they may consider an extra couple dollars to cover the fee. Or make it $6 increments vs. $5 to help pass the fee onto the classmate vs. the funds. I've had several interruptions writing this, so I will say this.... I prefer the donation button on the home page but am not interested in using PayPal to receive the funds. I'd love to have an option for that button to direct funds to Class Creator. Until then, an announcement on the home page with a link and directions to the reunion planner. Set it up as a separate reunion to be sure other events are not showing.
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Thursday, August 23, 2012 at 4:48 PM - Response #10
I've been here...lurking in the shadows...reading all the posts...most of the time the ?s have been answered before I get a chance to read them. It is so good to have you back, Darlene! This note is for you...
I accepted donations and registrations through PayPal until I found Class Creator. I changed the reunion registrations to Class Creator and left the donations going to PayPal. I've had the same account with PayPal well over ten years. What I did not like was having the funds in my personal account at PayPal. Now that Class Creator has Reunion Planner set for us to accept donations, I highly recommend that to everyone. If I ask for donations on my alumni site, I will be using Class Creator. However, I would definitely suggest you add an *(asterick) with the small print regarding the fee. Find the right words to add that they may consider an extra couple dollars to cover the fee. Or make it $6 increments vs. $5 to help pass the fee onto the classmate vs. the funds. I've had several interruptions writing this, so I will say this.... I prefer the donation button on the home page but am not interested in using PayPal to receive the funds. I'd love to have an option for that button to direct funds to Class Creator. Until then, an announcement on the home page with a link and directions to the reunion planner. Set it up as a separate reunion to be sure other events are not showing.
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Thursday, August 23, 2012 at 8:42 PM - Response #11
Terry,
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Friday, August 24, 2012 at 9:58 AM - Response #12
Barb,
Another Barbara We are a Non Profit, and have been for years.
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Friday, August 24, 2012 at 10:07 AM - Response #13
CC's rate will most likely go down, once they get enough of people using the credit card option. Paypal is cheap..cause it has so many users.
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Saturday, August 25, 2012 at 8:21 AM - Response #14
Barbara,
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Wednesday, August 29, 2012 at 4:47 PM - Response #15
Hi, Barbara... From your longer post above, I read you accept funds and hold them in CC (there is a fee) and then you transfer than (somehow) to a PayPal debit card. I'm thinking there is has to be a fee in there somewhere for PayPal.. in accepting the payment, maybe. I just seems to me that you may be in fee-overkill. You are going to have that without a bank account, unless someone knows of another way. Then again, maybe you found a way around PayPal.
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Wednesday, August 29, 2012 at 5:31 PM - Response #16
Hi Gwen,
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Thursday, February 21, 2013 at 12:50 PM - Response #17
We are up and running with donations, and CC's payment system is working out really well! Thank you, everyone, for your great advise. Question for the CC Team: is there some way you can remove the text, "Please select the quantity desired from the dropdown to the right of each item." from the payment form when ordering reunion store DONATION products, please? It makes no sense at all to the process (non-unit items have no "quantity" option available). Thank you!
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Thursday, February 21, 2013 at 12:55 PM - Response #18
Terry, This has been suggested before. Not sure if it will happen with the current reunion planner or if it will have to wait for the "new and improved reunion planner" that Brad hinted about during the "New Features Reveal" webinar in January.
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Thursday, February 21, 2013 at 1:44 PM - Response #19
Thanks, Kyle. I recognize that removing that text may not be an "easy fix"; probably requiring a number of IF/THEN parameters... It is quite awkward, but not insurmountable. Thank you.
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