Setting Up a 501(c)(6) in Paypal

[WaterfowlFarm]

I've read the Paypal article on setting up nonprofit organizations in Paypal, but that article references only 501(c)(3) organizations.  Has anyone had any experience with setting up a 501(c)(6)?  Is this type of nonprofit treated in the same way as a regular business or as a charitable organization like the 501(c)(3)?  I'm thinking specifically of the fees/rates charged per transaction.  Thanks for any guidance!

[sharpiemarker · Accepted solution]

@WaterfowlFarm 

You open a business account as usual and identify as a non-profit organization under 'business type' but I don't think you would qualify as a 501(c)(3) organization specifically though to get reduced PayPal fee rates but can use the PayPal tools for collecting funds as mentioned here:

https://www.paypal.com/us/non-profit/fundraising/fundraising-online

Like you said there is no mention of 501(c)(6). Even did a google search, na-da.

3 is for charitable non profits whereas 6 is for business leagues, sports/trade associations that deal with memberships.

https://www.thebalancesmb.com/what-is-a-501-c-6-membership-based-nonprofit-4173471

https://www.irs.gov/charities-non-profits/other-non-profits/business-leagues

When come time to do your taxes, PayPal will send any applicable tax form and have a CPA will deal with it.

If your organization ran its own charity org then you'd apply for '3' status with the IRS and then open a separate business PayPal account for the charity to quality for the reduced PayPal fee rates.

[WaterfowlFarm]

Thanks, sharpiemarker, for your response.  I suspected as much, but was looking for confirmation from someone more experienced than I, and now I have that.  Have a great weekend!