Journey of (IT) discovery as a small charity Part 3

One of the must-haves we identified as being needed on our website at Glow Kids was the ability for people to donate online. There were four companies in New Zealand that I considered before choosing PayPal, all with their own pros and cons. To save you some of the headaches I had, I have summarised them below, information taken from the respective vendors 16th August 2012 so may differ from their current rates.  Whilst PayPal best suited my needs, one of the other providers may be more aligned with what you want to achieve.

Company Setup Cost Annual Cost Transaction Fees Pros Cons
e-Way $0 $150 $0.30 No setup fees. Can setup recurring billing (donations) Needs SSL to be established on the website.
Need to set up an IMF (Internet Merchant Facility) with bank – separate from normal bank a/c and has additional fees.
Need a developer to implement
Payment Express $150 $600 $0.50 Flat transaction fees, no %age cost + Complicated to setup, needs a developer by the looks of it to implement.
Needs SSL to be established on the website
Need to set up an IMF (Internet Merchant Facility) with bank – separate from normal bank a/c and has additional fees
Flo2Cash $200 $120 0 – $5000  3.40% + 25c/trans
$5001 – $15000  2.90% + 25c/trans
$15001+  2.40% + 25c/trans
Hosting company recommends them, no IMF needed
Basic Plugins available for WordPress
Appear to offer preferential fees for NFPs
Needs SSL to be established on the website
Probably need a developer to maximise functionality
PayPal $0 $0 $0-$5000 3.4% + 45c/trans
$5001 – $15000  2.9% + 45c/trans
A number of WordPress plugins available, incl recurring donation options
No SSL needed
No IMF needed
Need to open a Paypal account, cannot have funds deposited direct into bank account

Paymark have a good list of providers in New Zealand, although not all offer online payment processing.

PayPal offer charities discounted fees, but one of the conditions is proving you are a charity. This is where it can get a little messy. I was unprepared for the amount of paperwork needed to get the account validated, and to make matters worse, there is a time limit of 7 days to get this done before the account is locked. So what information is needed? Helpfully the website doesnt tell you! But I will, read on!

Before you even THINK about opening an account with PayPal, get the following documents together on either pdf or jpeg format, as they WILL ask for them to confirm you are a registered charity and therefore entitled to the discounted rates:

  • A summary of the nature of the organization (the organization’s mission statement), and type and purpose of payments that you intend to process through PayPal.
  • Proof that you are a registered charity, a copy of the registration certificate is ideal
  • You need to add a bank account under your organization’s name and provide the bank statement or the voided cheque for it.
  • A letter of authorization on official letterhead of your organization, signed by an officeholder/bearer (e.g. Chairman, Secretary, Treasurer), to indicate the authorized persons (the PayPal account holder must be authorized) to manage all PayPal account related activities. The letter should meet the following requirements:

(1) The letter needs to be printed on the organization’s letterhead. The organization stamp (if available) should be added in the signature section.
(2) Please include the specific email address of this PayPal account in the contents of your authorization letter.
(3) One of the named authorized persons should be the PayPal account holder and responsible for all PayPal account related activities.
(4) The person signing the letter should be a different person from the authorized PayPal account holder and could be an officeholder/bearer (e.g. Chairman, Secretary, or Treasurer). Please state that the authorized person is acting for and on behalf of the organization in handling all matters related to the management of the PayPal business account.
(5) If the account holder is the sole owner of the business (i.e. there are no other directors), he/she may sign the letter. The company stamp is required in the signature section.

  • A proof of identity of both the authorized PayPal account holder and the person signing the letter of authorization. Examples of acceptable proof of identity (with photo) include: Passport or Driver’s License.

If you can get all of that ready you will be in business. Saying that, they do of course reserve the right to ask for more information or less information. The upside is you can start using the account as soon as it is active, you do not need to wait for it to be confirmed. I found the PayPal team to be really quick in responding to the information as I uploaded it and to email queries I had.

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One Response to Journey of (IT) discovery as a small charity Part 3

  1. patrick Edwards says:

    Payment online is a critical business process. Does this process have a proper online customer service advisor?. Check out http://www.pagepulse.co.nz

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