How to get a non-profit Paypal account approved

How to get a non-profit Paypal account approved Getting a Paypal account is quick and easy, you can be all done in less than 10 mins. However, for non-profit accounts, there is a rather substantial account review process that needs to be completed.

This blog post documents what you should expect through this account review, based on my recent account setup for Wanaka Toy Library - which took almost 2 months to complete the review process.

I hope the following step-by-step guide is useful to another charity / non-profit organisation, and reduce this to a more reasonable timeframe. This is aimed at New Zealand non-profit organisations, but the principles should apply elsewhere.

Note: The above image of a tireless beaurocrat is entirely fictional and bears no relation to this blog post whatsoever.

Proper Planning & Preperation...

Paypal requires non-profit organisations to undergo additional security checks. Basically, this is to stop some friendly fellow in Romania setting up a Paypal account under the name of some recognised charity and then soliciting donations under their name. These additional checks are definitely a good thing, I want to have some confidence that any money I donate is going to the correct organisation.

Before you start your application, you should do the following:
  • Select ONE member of the organisation to be the primary Paypal contact person. I recommend setting up as an email address for this person. This is probably difficult to change later on, so get it sorted now.
  • Configure this person's email account to send as - If you need to email the Paypal team they want to see the email coming from the registered address, otherwise you get one of these "Just a kind reminder, for security reasons and privacy concerns, please send us email at from the email address registered to your PayPal account in question next time."
  • Create a letterhead template if you don't already have one. We didn't so just pasted a logo in the corner of a word doc.
  • Assemble all the various bits of paperwork ahead of time - have them printed out for a committee meeting, and get them stamped and signed. Paypal tend to request information in small chunks rather than give a definitive list.

Step 1: Setup the account

So, to get started, setup a Paypal account as per normal. You want to select the non-profit / charity option when they ask which account type. This is very straightforward.

Step 2: Explain why you need the account

A few days later, you should get one of these because you selected a 'non-profit' account...

Dear Harvey Kane,

As part of our security measures, we regularly screen activity in the PayPal system. We recently noticed an issue with your account:PayPal requires accounts within the charity / non-profit category to provide us with some additional information regarding their organization. your account was identified as falling within this classification upon a recent review. If we do not receive a response, we may have to place limitations on the ability to access your account.

PayPal requires accounts within the charity / non-profit category to provide us with some additional information regarding their organization. Your account was identified as falling within this classification upon a recent review. If we do not receive a response, we may have to place limitations on the ability to access your account.

In order to secure your account, we would like further information from you. We appreciate your understanding as we work to ensure account safety.

Please log in to your PayPal account to respond to this request. Be sure to log in securely by opening a new browser window and typing the PayPal URL. Once you log in, you will be asked to provide information to secure your account.

If we do not receive a response within Jun. 2, 2010, we may have to limit access to your account. Limited access protects your account until additional security measures can be completed.


PayPal Account Review Department

They will want to know what you plan to do with the account. You need to upload a description of why you need the account and what you plan to do with it. Be honest here as you don't want the account closed down later on once you are actively using it because you told porky pies on your application. The magic word they are looking for is "Donation". If you don't plan to take donations via Paypal don't use this word on your application - I suspect most of the extra paperwork is only needed for non-profits who want to accept donations.

Here's what we responded with - clear and to the point:
Wanaka Community Toy Library is a toy library based in Wanaka, New Zealand.

Members pay NZD$65 per year for access to the library, they can hire toys for 2 weeks at a time and then swap then for new toys. Members are expected to contribute to fundraising activities as part of their membership.

We are an incorporated society, and are a non-profit organisation. We are going through the process of developing a website, and we plan to integrate online-payment functionality into the site.

In particular, we would like to use Paypal for the following functionality:

- Allow members to pay their annual subscriptions using credit card / Paypal.
- Allow members to pay fees for overdue toys
- Allow members to pay to reserve a particular toy
- Allow the public to make a donation to the toy library

The site is likely to be very low volume, so Paypal is a logical choice as the fees are per-transaction rather than per-month.

Paypal have a special upload system built into the resolution centre which is generally pretty good, but frustratingly it only accepts image files and not PDFs. You will need to convert all your docs to lowish-res images before uploading. You only have a few megabytes of space available for uploads, so be mindful of this when uploading your images. Aim for 100 - 200kb per document/image and you should be fine.

EDIT - a reader tells me that PDF uploads are now supported - yay.

Step 3: Basic information

Uh oh - you used the "D" word in your last correspondence didn't you. When you login to the resolution center, you will be asked to provide some more information.

Bank statement or voided cheque

A voided cheque or a copy of a recent (last 6 months) bank statement in the name of the organisation. We scanned a bank statement and sent this in. The address on our statement was for the treasurer rather than the organisation, but that wasn't a problem here.

Organisation summary on letterhead

This part is easy - summarise the organisation and additionally supply any supporting documents such as certificates of incorporation or a constitution. If you have an organisation mission statement, use that as the basis of this document. This must be on letterhead.
Wanaka Community Toy Library is a non-profit incorporated society based in Wanaka, New Zealand. The purpose of the organisation is to make available well designed, good quality toys that will extend basic physical, mental sensory and perceptual skills of children.

Membership is currently made up of 166 families from around the Upper Clutha area in New Zealand.

Full details of how the organisation is operated are available in the Constitution and rules of the Wanaka Community Toy Library, which has been provided previously to Paypal.

For New Zealand organisations, certificates of incorporation are available from the Companies Office and you can find other supporting docs publicly available at the Charities Commission. Very handy.

Proof of tax-exempt status

In New Zealand, all tax-exempt organisations are publicly listed. I phoned the IRD who said there was no official certificate proving tax exemption, however being on the 'donee organisations' list was proof of this status. Here's what we supplied to Paypal, and this was accepted without any fuss. As far as I could tell, there was no permalink to a particular organisation, hence the step-by-step instructions for finding our organisation.
Proof of Tax exemption

In New Zealand, Inland Revenue govern tax exempt organisations. There is no formal document or certificate proving tax exemption, however there is a publicly-viewable list of tax-exempt organisations available online on the IRD website.

Wanaka Community Toy Library Incorporated can be found on this list. Please follow these directions for proof of tax exemption:

- Visit
- In the 'Keywords' field, enter 'Wanaka'
- Scan for Wanaka Community Toy Library Incorporated in the list.

Inland Revenue can confirm that all organisations on this list are tax exempt. Their phone number is +64 4 978 0779 if there are any further questions regarding this page as proof of tax exemption.

If you aren't tax-exempt, good luck. From the tone of all their communications, the proof of tax exemption seems to be a pretty major requirement for Paypal. You may have trouble getting the non-profit Paypal account working without it, but do let me know how you get on.

Step 4: More information

You might get one of these...
Hello Wanaka Community Toy Library,

We are writing in regards to your PayPal account. PayPal appreciates that you have chosen us to accept payments for your organization.

We have received your documents. Thank you for your cooperation. In order to continue our investigation of your case, please provide the following information:

1. A brief organizational summary or Mission Statement.

2. We received the authorization letter from you but we noticed that the authorized person is not the account holder. I am afraid we can not accept the letter as a valid one. Please revise the authorization letter.

The detailed requirement for the authorization letter is as follows:

a. The letter needs to be printed on the organization's letterhead. The
organization stamp (if available) should be added in the signature section.
b. The named authorized person/s should be the main account holder/s and
responsible for all PayPal account-related activities.
c. The person signing the letter could be human resource, business
directors / owners (e.g. CEO, CFO, CMO) and should be a different person
than the nominated/authorized account holder/s.
d. If the account holder is the sole owner of business (no other
directors), he may act as the one signing the letter. The stamp of company
is requested on the signature section.

In addition, please state the authorized person is act for and on behalf of
the organization in handling all matters related to the management of its
PayPal business account (Please specify this PayPal business account by
including the registered email address of this account)

3. Proof of Identification - Photo ID of the authorized person/s (normally
the account holder) and the person authorizing the Letter of Authorization
(normally the person who signed the document). Examples of acceptable
Photo ID include: Driver's License, Passport, National Identity Cards.

4. We noticed that your website is under construction. Please inform us
when it is fully set up.

There are several things to discuss here.

Authorisation letter

Paypal need an official letter authorising one person to operate the account. It took us 3 goes to get this approved, so follow these instructions to the letter, and use our final letter as a guideline.
Letter of Authorisation 21st June 2010

To whom it may concern,

This letter authorises _______________________ ( as the main account holder on our Paypal account, and they will be responsible for all Paypal account-related activities. The authorized person ( is to act for and on behalf of the organization in handling all matters related to the management of its PayPal business account.


  • This must be on letterhead.
  • The required wording is very specific. Our initial letter got rejected because we didn't properly follow the wording instructions properly.
  • The person you authorise must be the person who has their name on the Paypal account. We also got rejected because I tried to authorise the treasurer rather than myself.
  • If you have an official organisation stamp or "common seal", use this here. The use of your common seal may be subject to rules set out in your constitution - such as only being able to be used at official committee meetings.
  • To be on the safe side, try to get 2 other committee members to sign this rather than the noninated person signing their own authorisation letter.
  • You must supply ID for the 2 signatories + the nominated account holder. We scanned and sent drivers licenses.

Under construction

At the time of submitting this application, the website looked like a finished website, but I had a little "under construction" note in the sidebar while we finalised the Paypal application. This was a problem, so make sure your website doesn't use these words. A basic, crappy-looking website is fine, but an unfinished website is not so make sure you hide any unfinished bits of the website. I'd avoid the use of lorem ipsum text too - nothing screams 'under construction' like Lorem Ipsum :)

Once I did all this, I emailed Paypal directly via their provided address (rather than using the resolution centre), just to make sure things were proceeding...

I have just uploaded the requested documentation via the resolution center. Hopefully this should be everything required to complete this process. I apologise for the delay, the committee only meets monthly.

To clarify:
- A brief organisation summary has been uploaded. Further details about the organisation if needed are available in the constitution (already supplied) or on the website,
- I have amended the authorisation letter. This authorises Harvey Kane (myself) as the Paypal account holder and is signed by the chairperson.
- Photo ID from myself and the chairperson has been supplied.
- The website is now ready for launch, and the 'coming soon' message has been removed.

Thanks very much,

Harvey Kane.

We had missed the Paypal-imposed deadline here by a week or so, which didn't seem to be an issue (maybe because I apologised so nicely).

Step 5: More information

After submitting the above, we got a request for some more new information.

Hello Wanaka Community Toy Library,

We are writing to you in regards to your PayPal Account. PayPal appreciates that you have chosen us to accept payments for your organisation. As part of PayPal's Compliance Program, we request that entities wishing to accept donations on behalf of a charity or other
non-profit organisation provide evidence of their legitimacy. Please provide the following information:

1. Please update your registration address by a physical one.

2. A valid Proof of address document to prove the new address.
- Proof of address document, such as a copy of a utility bill, bank or credit card statement, tax invoice, insurance bill in your name. Please note the address on the statement must match the PayPal account and the date of issued must be in recent 6 months.

All requested information must be submitted within 7 days to continue the review process.

This was because we used a PO Box as the contact address, however PO Boxes aren't acceptable. This was a bit of a problem for me as I simply don't have any mail coming to my physical address - I have gone to great lengths to become location independent, continually updating one's physical address gets too hard. To counter this, I raised a small invoice to the organisation using my own company for "Web hosting". This initially got rejected because it was made out to "Wanaka Toy Library" so I re-issued the invoice to "Wanaka Community Toy Library Incorporated, Attn: Harvey Kane" and it was accepted. The important thing is to have the organisation's name, your name, and the exact physical address you have listed with Paypal.

Again, this took me longer than 7 days to organise, but it was still accepted.

All done

A couple of days later, we got one of these...

Hello Wanaka Community Toy Library,

Our review is complete and we have restored your account.

We appreciate your patience and thank you for your help in making PayPal the safest and most trusted online payment solution.


PayPal Compliance Department

Sweet, glad to have this all sorted. And our account has been functioning nicely since.

Shortly after the 'account approved' message, I got another email...
Dear Harvey Kane,

We understand that your PayPal account may have been temporarily limited due to questions or concerns by our Account Review team. Thank you very much for your cooperation during this process. We are pleased that your account has now been reinstated.

As part of PayPal's Commitment to excellence, we would like to ask you to take just a few minutes to answer questions about PayPal's account limitation process.

To respond to our survey, please click on the web address below. If that does not work, please cut and paste the entire web address into the address field of your browser.

NOTE: Please respond within five days. After 5 days, this invitation will expire.

(link here)

Thank you for your feedback and continued business with PayPal!


PayPal Customer Support

I sent some honest feedback of how I found the process.


So - the intent of this post is to help other organisations prepare the required paperwork to help the account review process along. I couldn't find good resources available explaining how it all works, especially anything relevant to NZ organisations. Paypal is a very good low-cost option for non-profits wanting to start accepting orders and donations online - however the setup process is, if I'm being generous, a bit difficult.

I would recommend assembling all the documents mentioned above, and send a big lump of paperwork for Paypal to pick through. The frustration for me was having to wait for committee meetings or chase around other committee members for signatures or paperwork, so hopefully this gives a good overview of what paperwork is required so you can get it all together in one go, at one committee meeting.

Good luck.

PS. - If you fink this information useful, please consider making a small donation to the Wanaka Community Toy Library using our shiny new Paypal account :)
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