How do a non-profit get set up to receive electronic payments

[vonfirmath]

Our AHG troop is trying to figure out how to get set up to receive some sort of electronic payments.

 

Up to this point we've worked by checks and cash -- but our members really don't like this.

We've asked around other troops and it seems mostly they have an individual using a personal account to receive electronic funds and then transferring to the troop -- which as well as having all sorts of potential issues if you misjudge the character of someone, also now has tax implications for that person (so I'm seeing troops starting to pull back from doing that)

So--any other ideas?

[Miss Tick]

Our troop uses PayPal and requests that people use the "Friends and Family" option. In effect this really just means that the pay-er pays the fee rather than the pay-er. You are paying for the convenience. The account is a troop account run by the treasurer and tied to the troop's checking account. This is how I understand it to work, anyway.

[Jean in Newcastle]

My non-profit uses Paypal and asks the donors to pay the fee (so add that amount to what they would normally donate).

We also have a card reader from the bank but I have to figure out how to use it.  I'm hoping that if I take it down to the bank, they will give me a tutorial.  The former treasurer can't remember (and since memory problems is why she's had to step down, I have to find work-arounds on my own.) 

[KSera]

9 minutes ago, SusanC said:

Our troop uses PayPal and requests that people use the "Friends and Family" option. In effect this really just means that the pay-er pays the fee rather than the pay-er. You are paying for the convenience. The account is a troop account run by the treasurer and tied to the troop's checking account. This is how I understand it to work, anyway.

Is it okay for a business to have people use the friends and family option? I’m always uncomfortable if I’m buying a good or service and someone (who isn’t my friend or family) asks me to do that. 

[happi duck]

2 minutes ago, KSera said:

Is it okay for a business to have people use the friends and family option? I’m always uncomfortable if I’m buying a good or service and someone (who isn’t my friend or family) asks me to do that. 

I'm uncomfortable with that too and would rather be asked to pay a fee.

Years ago we frequented a used book store that charged extra to pay with a credit card and that seemed to work fine.

[happi duck]

Our church offers Paypal and the fee adds up.  Mostly our daycare uses it and I've wondered if they factored in the cost.  

[vonfirmath]

15 minutes ago, happi duck said:

I'm uncomfortable with that too and would rather be asked to pay a fee.

Years ago we frequented a used book store that charged extra to pay with a credit card and that seemed to work fine.

One camp used to allow Paypal and charged the fee back to the person using it. With the new rule that it will be counted as income to the person receiving it, they have stated if you do not feel comfortable using Friends and Family please pay with a check or money order as other than friends and family payments will be returned to avoid having tax implications for the person whose account it is.

 

(Money that is used to pay for a summer camp and turned over to the troop as operating expenses is very definitely NOT income. But I can understand an individual not wanting the tax headaches of that)

 

 

Edited January 25, 2022 by vonfirmath

[rutheart]

When I was on the board of my HOA, we were set up to use Venmo, asking that the homeowner cover the transaction fee.

[TheReader]

I'd be interested to see if anyone has a workable answer; this is the stated reason why our homeschool co-op can't accept payments other than cash/check; individual teachers can & do, but things payable directly to the co-op have to be cash/check for these reasons already listed in this thread. 

Also, as a teacher at the co-op, I have not requested families use the friends/family if they use paypal (though I def. prefer zelle), nor have I instructed them not to. I have 3 that use Paypal, and only 1 of them uses the goods/services option, and even that just one does hit me with a fee that would certainly add up if they all did, so I can understand the co-op not wanting to use it. 

I have wondered if it's not possible for whatever checking account/bank account that the organization uses to link a Zelle info since that is through the bank, directly into that account. If the signer(s) of the account set up an email/phone number for that, that seems the easiest way as far as tax stuff goes. But the account would need to be one of the banks using Zelle. 

[Miss Tick]

1 hour ago, KSera said:

Is it okay for a business to have people use the friends and family option? I’m always uncomfortable if I’m buying a good or service and someone (who isn’t my friend or family) asks me to do that. 

I've not investigated this, but generally scouting organizations are nonprofit. Some of the charities I donate to, although they aren't using PayPal, also offer me the opportunity to pay the processing fee in my donation. This seems like the same thing. As long as the fee is paid the electronic servicer is satisfied. If a for profit business asked me to pay the fee that seems to mean they want to keep their prices artificially low? Or maybe they just prefer you pay them via another method?

I think the name "friends and family" should be read as "I will pay the fee rather than the pay-ee", but that isn't as catchy. I just consider the fee to be the cost of the convenience in a nonprofit situation.

[Ellie]

3 hours ago, vonfirmath said:

Our AHG troop is trying to figure out how to get set up to receive some sort of electronic payments.

Up to this point we've worked by checks and cash -- but our members really don't like this.

We've asked around other troops and it seems mostly they have an individual using a personal account to receive electronic funds and then transferring to the troop -- which as well as having all sorts of potential issues if you misjudge the character of someone, also now has tax implications for that person (so I'm seeing troops starting to pull back from doing that)

So--any other ideas?

Does AHG not have any guidance on this?

[vonfirmath]

15 minutes ago, Ellie said:

Does AHG not have any guidance on this?

Not really. I'll ask our Troop Mentor to see if they have anything I'm not finding.

 

[Bootsie]

Does the organization have a checking account?  If so, check to see if the bank uses Zelle and if the account type can accept payments through Zelle.