This post is based on conversation I had with PayPal reps in Israel and the United States. As such, my information might be slightly out of date.

Essentially, Paypal just wants to see that a charity is registered as such. They weren’t that sophisticated to understand Nihul Takin or Se’if 46. Of course, this was a while ago and things might have changed. My recommendation is to call them up. PayPal also hired a new nonprofit rep about a half a year ago. Email me if you want her contact details.

Thanks for dropping me a line.

Best,

Shuey

I enjoyed your informative post. Can you explain what kind of non-profit qualifies for the 1% discount in PayPal fees? I am having trouble finding this information elsewhere.

Thanks!
Yehoshua

You just love giving me more work, eh?

First, thanks for the warm words.

Second, I have not actually written about how to choose the best online donation processor. But it is interesting that you ask.

Charlie Kalech and I are hosting a mini-seminar for Israeli nonprofits on just this subject on July 5th. We’ve invited some of the big players to “pitch” to the audience so we can learn the exact differences between the options.

You might be getting a post or two after the event. See, some wishes do come true…

Warm Regards,

Shuey

Thanks for the very practical question.

First, this most certainly can work. Though for the record, I am personally against nonprofits using money changers. But yes, for organizations that have international arms or “Friends of” charities that help fundraise, there is nothing preventing these foreign organizations from setting up PayPal accounts in their respective countries. Then, they can either deposit checks directly into their Israeli bank account or wire the money over. This, I believe, is actually an ideal way to do things. (For more on this topic, please see my earlier post “3 Dangers that Money Changers Pose to Charities.”)

Second, not every organization has an office/charity overseas. In this particular case, this school did but their American accountant, I was told, advised them against it. I am wary to discuss this aspect of the story as I am not an accountant or lawyer. It is possible other charities might face similar challenges from their supporting organizations registered abroad, as well.

Third, some organizations have no choice but to do it this way. For example, an Israeli charity that also maintains a store that promotes and sells items on behalf of the charity — like a Museum or synagogue, for example. They cannot forward this aspect of their “business” to their “Friends of” charity.

But, again, for those that do, your idea is certainly a cost-saving option that I have seen work.

Thanks for checking in,

Shuey

I opened my paypal mapped to a USA bank account (RBC Bank).

Money that are sent to me are sent in dollars, sit in my paypal account in dollars, and when i feel like transfering them for free to my US bank account, they are in dollars. When I want to use them in Israel, I write a dollar check and bring it to my local money changer, all receipted, photocopied, and above board.