Receiving Donations for your Business

Receiving Donations to Fund Business from The Startup Garage
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Surprisingly, many for-profit companies have raised a fair amount of capital by simply asking for donations to their organization. But because your company is not an established a non-profit, it is important for your donors to understand that you will not be able to provide them tax deductions. Your “donations” will be considered taxable income.

An easy way to solicit donations to your company can be as simple as using a Paypal button on your site. However, be careful to not use the term “donate” when using Paypal, as that term refers only to contribution to charities. If Paypal sees you violate this term, they will make you return every donation given to your business. Instead, you can use phrases like “support our business”.

One of the most notable companies to use the donation strategy is the web tycoon Wikipedia, which raised $20 million in its annual appeal for donations. This phenomenon of Crowd Sourcing, in which a venture asks members of the general public for funding through many small donations, is growing and growing strong. To read more about Crowd Sourcing, take a look at our past blog.


Whether you have a question about Receiving Donations, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!
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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.