The #1 Mistake I Made When Running My Online Fundraiser

Online fundraising, crowdfunding, there are so many various ways you can phrase it, but it is all about collecting money online for a need. It doesn’t matter what the need is – you can literally raise money for anything online.

I ran three different charitable fundraisers last year and learned a big lesson by the time tax season rolled around this year. I want to share what I learned with you, while hoping that I can spare you the same grief that I endured.

The #1 Mistake I Made When Hosting an Online Fundraiser

When choosing my fundraising platform, I chose to go with Some platforms charge an extra service fee for using their website. does not charge a service fee. They clarify on their website that the only charge you will be assessed is the PayPal processing fee as you collect donations. There were no surprises in how my fundraisers ran until tax time rolled around.

I thought that I had done my research. Everyone runs fundraisers online, right? I had never heard that this would be a problem for me. When I did what I thought was some diligent Google research before hosting my fundraisers I didn’t see this big red flag anywhere.

THIS IS YOUR BIG RED FLAG, so take note!

If you are hosting a charitable fundraiser, do not run your fundraising under a PayPal Business Account. 

Paypal will issue a 1099-K on your behalf if you hold a Personal or Business Account with them and receive more than $20,000 in gross payment volume for goods or services OR receive 200 payments for goods or services in the same year.

Now, you might call me naive. Maybe everyone already knew this, but I didn’t, so I am writing this to those who might be starting a charitable fundraiser and missed this little tidbit of highly significant information.

Paypal Personal Account

PayPal 1099-K tax statement rules

Paypal Business Account

Paypal Business Account 1099-K

I know that for years I have had one PayPal account and I use it for everything. I use it for my business. Last year I used it for my fundraisers. I have used it for my personal purchases. I use it for when I do those buy/ sell/ trade groups online to get cheap deals on my homeschool curriculum for the following year. I use my one account for it ALL.

I am not upset with or with PayPal for my mistake. I have learned my lesson. All of this could have been avoided if I had acquired this knowledge sooner.

If you are looking for ways to avoid making the same mistake as me, here are my best suggestions!

  • PayPal allows you to have two accounts for one person, one consumer account and one business account. I would take advantage of both of these options to make sure that your personal purchases are not lumped in with your business transactions.
  • Take a good old fashion check or cash instead of an online payment when you can for your fundraising efforts.
  • Thinking about switching online payment services to avoid this issue altogether? Most online payment platforms do this, so that isn’t going to fix the problem.
  • Hire a tax professional to do your taxes and advise you in the best way to conduct your fundraising and other business endeavors.

Online crowdfunding is amazing. There are so many platforms to choose from, and the idea of having it so easily accessible via the web and on mobile means that you will reach more people in more places. Due to the convenience of PayPal, you are more likely to increase your donations because people like one-click and forget donating in our fast paced culture. Just remember to be smart, do all of your research before choosing a fundraising platform, and PLEASE consult a tax professional that is familiar with online fundraising and tax laws concerning it before you begin. Happy Fundraising!

What have you learned from your fundraising experience?
Do you have any tips, tricks, or what-not-to-do’s to share? Let us know in the comments below!


Lindsey S

Lindsey is a stay at home, work from home mom to six children eight years and younger. She homeschools and enjoys large family living. When Lindsey is not changing diapers, cleaning, and cooking meals in her awesome Instant Pot, she is DIY-ing her way around the house. Where she loves learning new skills, her heart is in sharing with other women the message of the Gospel and showing them how to instill those truths in the hearts of their children.


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