Non-profit payment service

May 26, 2010 7:57 PM

I am working with a non-profit co-op that would like to take payments from its members online. However, the co-op is not a 501(c)(3) organization, but has a very small budget and can't afford to shell out for a merchant account and all the associated widgets. They already tried PayPal and their account got "restricted" there because PayPal wants a 501(c)(3) letter. Are there any other choices?

The co-op is a 501(c)(12) organization, and is a Texas non-profit co-op corporation. Payments or donations made by members aren't tax deductible to the giver, but the corporation itself is tax exempt. Would Google Checkout or some other service work? It seems that all of the online payment systems out there for non-profits are geared for the tax deductible kind.

There's no physical products involved, just services that the co-op provides to its members.

posted by fireoyster to work & money (5 answers total)

If you want to try again with PayPal, let me know. My account rep is really good.
posted by meta_eli at 8:16 PM on May 26, 2010

I don't believe you can use Google Checkout for a 501(c)(12). This is from their official blog, dated May 21:

"We’re excited to announce that IRS-approved 501(c)(6) organizations may now process transactions through Google Checkout. Previously, Google Checkout only processed online donations for 501(c)(3) religious, educational and charitable organizations in the United States."

(I wouldn't recommend Google checkout anyway, but that's me.)
posted by Lucinda at 8:36 PM on May 26, 2010

I went through this just this very month with Paypal. Texas non-profit, not a 501(3)(c). Like you, my account was restricted. I submitted our scanned articles of incorporation, a description of our organization that I kind of made up, and a voided check, and the restriction was lifted within a day. All went well, but just so you know, Paypal also restricts withdrawals from the account to $500 per month unless you associate either the account owner's social security number or credit card with the account.
posted by bwanabetty at 8:56 PM on May 26, 2010

Auctionpay is a PayPal competitor. We used it at a non-profit I used to work at and I would recommend them. Very easy interface to use and a lot better, in my opinion, than PayPal--better service, faster response and no PayPal logo on your checkout pages.
posted by FergieBelle at 6:22 AM on May 27, 2010

Thanks for the answers :) We've decided to go with Square (and wait for a card reader) along with Google Checkout--as a "technology services" company--for the interim since it seems to allow fill-in-amounts payments.
posted by fireoyster at 3:34 AM on June 7, 2010