Specifically, it says the PayPal Giving Fund would tell users they were donating to a specific organization of their choice — but PayPal would actually redirect those funds to a different charity, without telling the donor or original charity.
Thousands of organizations missed out on donations because of the practice, the lawsuit claims.
Not all donations made through PayPal are being disputed in the suit. The case only alleges mishandling of donations on the PayPal Giving Fund platform, not money donated to a charity that simply goes through a PayPal account. And donations to large charities are most likely not affected.
Here’s the issue: PayPal offers to use its Giving Fund for donations to organizations that aren’t yet signed up on the platform. But, as it acknowledges on its website, it will only distribute money to organizations that have a Giving Fund account, in addition to their standard PayPal account.
Many larger national and international charities have both accounts. But “hundreds of thousands of smaller charities” have not gone through the process, the lawsuit says.
Nevertheless, those charities are listed on the Giving Fund site, without any indication that they aren’t set up to receive funds.