Settlement With PayPal Charitable Giving Fund Ensures Donors Receive Necessary Information About Their Contributions

Staff Report

Texas Attorney General, Ken Paxton is the lawyer for the State of Texas and is charged by the Texas Constitution to:

• defend the laws and the Constitution of the State of Texas
• represent the State in litigation
• approve public bond issues

To fulfill these responsibilities, the Office of the Attorney General serves as legal counsel to all boards and agencies of state government, issues legal opinions when requested by the Governor, heads of state agencies and other officials and agencies as provided by Texas statutes.

The Texas AG sits as an ex-officio member of state committees and commissions, and defends challenges to state laws and suits against both state agencies and individual employees of the State.

Many Texans look to the Office of the Attorney General for guidance with disputes and legal issues. The agency receives hundreds of letters, phone calls and visits each week about crime victims’ compensation, child support, abuse in nursing homes, possible consumer fraud and other topics. To find out more about the Texas Attorney General, visit the official website at https://texasattorneygeneral.gov/.

AG Paxton: Settlement with PayPal Charitable Giving Fund Ensures Donors Receive Necessary Information About Their Contributions

AUSTIN — Attorney General Paxton joined 23 states in an agreement with PayPal Charitable Giving Fund, Inc. (PPGF), the charitable arm of PayPal, to ensure donors are given clear information and disclosures on where their money goes when making charitable contributions through the company’s online platform.

Previously, PPGF aggregated and distributed funds to the donors’ chosen charities without collecting fees; however, charities that maintained a PayPal account received contributions more quickly than others.

PPGF did not disclose this fact to donors. PPGF also failed to inform donors that the nonprofit sometimes redirected contributions away from the donor’s selected charity and gave them to a different organization with similar purposes.

“Texans are generous people who selflessly give to countless charities and causes. They deserve to know exactly where their contributions go and how they are handled,” said Attorney General Ken Paxton. “The agreement reached today marks a recognition of the responsibilities charitable funds have to donors, and we are grateful for the new PPGF provisions that will better inform all who choose to give to charity through the online platform.”

To address states’ concerns about fundraising activities, disclosures, vetting practices, and treatment of charitable contributions, PPGF adopted reforms to disclosures to ensure donors know:

• they are contributing to PPGF,
• the time frame in which a selected charity may receive funds from PPGF, and
• the implications of being enrolled rather than an unenrolled charity on the PPGF platform.

PPGF also agreed to notify donors when it redirects a donation and provide regulators with future campaign data to ensure the organization is complying with its obligations under the agreement.

As part of the agreement, PPGF will make a payment of $200,000 to the National Association of Attorneys General (NAAG) for deposit into the NAAG Charities Enforcement and Training Fund.

This Fund defrays costs associated with the investigation and litigation of cases brought by state charity regulators, and provides training and education to those regulators.

For tips on charitable donations, please visit our website here: https://www.texasattorneygeneral.gov/divisions/financial-litigation/charitable-trusts/tips-charitable-donors.