Donations

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Wikis > Donations

Definition

Donations are gifts given typically for a charitable purpose. Donations come in various forms including cash payments, new/used goods, and services. As a gift, donations are not expected to be paid back in any shape or form.

For-Profit

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 or 501(c)(3) Tax-Exempt Organization, 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[1] 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”.