Many non-profit organizations have found that PayPal offers a safe, convenient and unobtrusive way to solicit donations. It can be a great complement to traditional fundraising efforts, particularly at a time when staffs and budgets are stretched thin.

Your donors can reach PayPal from your website, make a contribution on a secure site, then return to your site. You and the donor receive a receipt, and in most cases you will have instant access to the money. There are no setup or maintenance fees, and PayPal offers a suite of services specifically for non-profits.

While PayPal is an inexpensive and easy-to-use service, it is also a loosely controlled method of moving money. For that reason, we recommend especially intentional and well-documented approaches to ensuring effective controls. We recommend you consider the following:

  • Document the intended uses of PayPal and a related controls policy, including the importance of effective passwords
  • Enforce a notification system that cannot be overridden by the person with the PayPal login ID and password. For example, create an email forwarding account that automatically notifies multiple employees (i.e., someone in accounting and someone in development) whenever a donation is received.
  • Request that PayPal automatically sweep the balance in the account nightly.  This is a free service.
  • Use a zero-balance bank account for receiving the money from PayPal.  Otherwise, money can be moved from the bank account into PayPal and then emailed anywhere.
  • Request a remote identification device from PayPal that provides a unique number that is constantly changing, and store the device in a secure place.

For more information on our Internal Controls services, click here. For more information on our non-profit accounting services, click here or contact a member of the Barnes Dennig non-profit client service team at (513) 241-8313.

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