Attorney General Tong Leads Multistate Settlement with Paypal Charitable Giving Fund
Settlement Will Ensure Donors Have Adequate Information When Making Charitable Donations
(Hartford, CT) – Attorney General William Tong announced today a multistate agreement with PayPal Charitable Giving Fund, Inc. that will ensure donors receive adequate information and disclosures when making charitable contributions through the company’s online fundraising platform. The settlement concludes a multistate investigation launched in 2017 and co-led by Connecticut and Nebraska.
PayPal Charitable Giving Fund, Inc. (PPGF) is the charitable arm of PayPal, Inc. PPGF is a 501(c)(3) nonprofit corporation that allows donors to contribute funds electronically to PPGF and select a charity that will ultimately receive the benefit of their contribution. Donors’ contributions are aggregated and distributed to the donors’ chosen charities. PPGF does not collect fees from donors or charities for this service; however, a charity receives contributions more quickly if the charity maintains a PayPal account, a fact that had not been adequately disclosed to donors. In some instances, PPGF redirected donors’ contributions from the charity selected by the donor to other organizations with similar purposes without informing donors.
"When donors make contributions online, they deserve to know exactly where their money is going. PayPal's Charitable Giving Fund wasn't doing that, and that's why attorneys general across the country joined together to ensure donor wishes are respected and protected moving forward. I want to thank the assistant attorneys general in my office who have been co-leading this important investigation for the past two years. This settlement sends an important message that attorneys general nationwide are prepared to act together to ensure honest and transparent treatment of charitable contributions, to protect donors and the organizations they seek to support," said Attorney General Tong.
“We believe it’s a good thing when a company aims to help their customers more easily support charitable causes and those in need, but they need to ensure they’re considering important details in the process,” said Consumer Protection Commissioner Michelle H. Seagull. “Consumers have a right to know exactly where their money is going when they donate to charity. We always encourage consumers to do their research before they donate so that they can make an informed decision, and if there may be changes to that decision – they should be disclosed. I want to thank the Office of the Attorney General, our partners across the country, and PayPal for their work on this settlement agreement.”
States launched an investigation in 2017 into PPGF’s fundraising activities, including its disclosures, vetting practices, and treatment of charitable contributions. To address the states’ concerns, PPGF adopted reforms to its disclosures to ensure that donors know:
• that they are contributing to PPGF
• the timeframe in which a selected charity may receive funds from PPGF
• the implication of being an enrolled rather than an unenrolled charity on the PPGF platform.
PPGF also agreed to notify donors when it redirects a donor’s charitable contribution to an organization other than the one selected by the donor. PPGF will provide regulators with campaign data to ensure the organization is complying with its obligations under the agreement.
Finally, PPGF agreed to make a donation of $200,000 to the National Association of Attorneys General for deposit into the NAAG Charities Enforcement and Training Fund. This Fund has been established to defray costs associated with the investigation and litigation of cases brought by state charities regulators, and to provide training and education to those regulators.
As a result of today’s settlement, online donors will continue to have the information they need to make informed decisions about their charitable contributions.
States participating in the settlement include: Arkansas, Colorado, Connecticut, District of Columbia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New York, North Carolina Secretary of State, Ohio, Oklahoma, Oregon, Pennsylvania Texas, and Wisconsin.
Mark Kohler, Special Litigation Department Head, and Assistant Attorney General Gary Hawes assisted the Attorney General in this matter.