Welcome to PandaPay! PandaPay is a payment processing platform designed to make charitable giving as efficient and economical as possible. Our platform is a one-stop shop for any organization that wants to contribute to any of the 1.6 million public charities in the United States. We think that’s pretty neat.
Many charitably-inclined individuals and organizations give less, or not at all, due to (let’s face it) somewhat bumpy donation experiences. It doesn’t have to be this way. At PandaPay, we believe donating to charities should be simple. We can help you build high-value charitable experiences into your existing business models without distracting from primary business. Our system relieves both fundraisers and charities from getting bogged down in logistical hurdles. Among its various functions, PandaPay provides hassle-free disbursement, automatic verification of the beneficiary charity’s status with the IRS, and issues tax deductible receipts. All you need to do is connect with PandaPay.
Let’s take a look at how PandaPay works. First, we’ll go over the variety of organizations and situations that would benefit from PandaPay. Next, we’ll walk through all the terms and concepts that make PandaPay the best donation processing solution available. Finally, we’ll dig into some of the nuts and bolts of setting up the platform so you can focus on your work, knowing that your charitable efforts are handled.
Navigate to any of these sections to get started:
A. Using PandaPay
PandaPay is designed for effortless donation. When we looked around the world of philanthropic giving, we saw cumbersome workflows getting in the way of donation, and lacking the cutting-edge technology that has brought success to so many businesses and organizations. We wanted to power digital donations, so we built an API that can assist your developers, support your business, and facilitate your greatest charitable impact.
1. Is PandaPay right for me?
If your organization wants to process donations to any of the 1.6 million public charities in the United States, then yes. A single integration with PandaPay is all that’s necessary. PandaPay lets you easily find and donate to your target charity without having to track donations, receipts, IRS accountability, or any of the other hassles or logistics typically associated with large-scale giving. Lots of organizations and circumstances benefit from PandaPay, including fundraising platforms and other giving technologies, integrated giving and corporate social responsibility programs (“CSR”), and grant-making organizations and foundations.
Fundraising Platforms and Giving Technologies
Have you ever personally donated to someone’s 5K run for cancer research? If so, there’s a good chance you donated through a fundraising platform, such as Indiegogo or GoFundMe. The world of crowdfunding platforms exploded to a $7.6B market in 2014, and continues to grow. These platforms help the nonprofit sector meet individual donors where they are at any moment. In doing so, they collect what might be small, individual donations, and pool them into a much greater contribution. Nevertheless, these platforms still have to manage the administration of each donation no matter how small, not to mention all of the receipting, tax deductions, and IRS audit checks. PandaPay simplifies all of this for you, packaging these logistics in a neat API so you can allocate your resources where they are needed most.
- Social media campaigns
- Matching campaigns
- % of sales or profit
- Employee and payroll giving
- Charity sweepstakes
- Giving competitions
- Charity auctions
- Emergency giving / disaster relief
- Cause-specific giving
Integrated Giving and Corporate Social Responsibility (“CSR”)
Marketplaces, e-commerce platforms, and employers can benefit from using PandaPay to integrate charitable experiences into their existing business models. PandaPay assumes the legal and compliance considerations of running charitable campaigns. Our system can be used to make philanthropy accessible to your consumers as well as your employees.
- "% of sales" or "profit to charity" campaigns
- One-time or recurring corporate donations
- Payroll giving and employer-matching
Grant-Making Organizations and Foundations
In most cases, grant-making organizations and foundations must verify a nonprofit is in good standing before making a donation, and must provide a report that demonstrates they conducted pre-grant due diligence. This is expensive and time consuming.
PandaPay eliminates manual verification and provides distribution at scale. Our platform automatically confirms your beneficiary’s tax-exempt standing and promptly delivers funds, as long as the charity passes verification. More on verification here.
- Donor-advised funds
- Community foundations or cause-focused foundations
- Grant-making private foundations
2. What’s the difference between PandaPay and PandaPay ECOM?
PandaPay is an end-to-end donation transaction processing platform that leverages the structure of a donor-advised fund to provide seamless charitable experiences. PandaPay is an ideal solution for organizations with older, custom, or otherwise difficult to maintain transaction processing systems. Our API is developer-friendly and simple to deploy.
PandaPay ECOM is a plugin that connects an existing transaction processing platform, such as Stripe, with the PandaPay API. This allows platforms like e-commerce stores, which may already rely on software like Stripe for business, to take advantage of the benefits of PandaPay without disturbing their existing workflows and consumer experience. More on PandaPay ECOM here.
B. Terms and Concepts
So you’ve decided your organization could use a streamlined donation system. Great! The first thing to do is get the contributions from your individual donors through your platform and processed into ours.
What kind of payment types can be used with PandaPay?
PandaPay works with typical electronic payment methods, like credit card or Automated Clearing House (ACH) transactions, and will soon support securities contributions as well. This lets your individual donors contribute seamlessly through your platform without any changes to their transaction experience.
Once a transaction is processed, where will receipts come from, and are they tax deductible?
Receipts come from PandaPay, on behalf of our partner charity, the Social Good Fund (“SocialGood”), immediately upon a transaction. As a public charity, SocialGood may collect donations, issue tax deductible receipts, and disburse donations to charities designated by the donor or the platform. As the sponsor of our digital donor-advised fund (“DAF”), SocialGood ensures compliance with IRS requirements for any transactions processed through PandaPay's API.
All transactions for charities in good standing with Section 501(c)(3) of the Internal Revenue Service that are successfully processed by PandaPay are tax deductible to the fullest extent allowable. Platforms, whether individual or corporate, will immediately be sent a receipt to the email address provided through the PandaPay API, along with important transaction information for record-keeping. PandaPay can also generate receipts for your individual donors in lieu of your platform. Please contact us at email@example.com if you’d like to explore this option.
2. Donor-Advised Funds (DAFs)
Once a transaction is processed and receipted by PandaPay, either through the API or the ECOM plugin, it lands in our donor-advised fund (“DAF”) at the Social Good Fund (“SocialGood”), a 501(c)(3) public charity dedicated to improving the logistics of philanthropy. The DAF infrastructure is a critical component of how we do what we do, so let’s dig in.
What is a Donor-Advised Fund?
Imagine you’re a large foundation that donates and receives a lot of money for a lot of great causes. Managing individual donations, receipts, tax deductions, and other administrative concerns can become extremely tedious. Donor-advised funds, or DAFs, allow foundations to pool private contributions and streamline them through a public charity.
To participate in a DAF, you would normally have to open an individual or organizational account within the fund, and deposit your contribution. You wouldn’t be able take out any prior contributions, but you could advise where the total proceeds in the fund were charitably distributed or invested. Your fund’s sponsoring charity would then have the authority to approve or deny those recommendations, and be held responsible for ensuring that the assets are granted to qualified nonprofits.
Traditionally, DAFs are used by individuals or organizations with large private budgets. It’s a widely accepted model, and nearly $100 billion in assets are held in DAFs at any given time.
What does it have to do with PandaPay?
PandaPay operates as a fully digital DAF, with SocialGood operating as the sponsoring charity.
The PandaPay API works in conjunction with the SocialGood Fund, and our DAF at SocialGood accepts donations exclusively processed through PandaPay. As the sponsor charity, SocialGood applies appropriate expenditure and quality controls, and disburses funds to the charities advised by the donor, if possible (more on this below). SocialGood serves a multitude of functions as the custodian, administrator, auditor, aggregator, and distributor that ensures the compliant use of funds. SocialGood takes irrevocable ownership and responsibility for all donations made through PandaPay until they are disbursed to another charity or nonprofit.
This setup significantly lowers the barrier of entry to large-scale charitable giving, and lets your organization unlock the benefits of giving without disrupting normal business operations.
What are the benefits of operating as a DAF?
PandaPay’s use of the DAF structure allows all sorts of organizations to embed charitable experiences into their existing business models. By partnering with SocialGood, we’re able to aggregate scale and negotiating power, which fuels our effort to secure the lowest possible cost of donation processing and work toward a sustainable financial infrastructure for the nonprofit sector. Our built-in compliance and verification tools work seamlessly with SocialGood to standardize intake, receipting, and disbursement of donations.
Let’s break these down a little further:
- Administration DAFs are sponsored by a charity, in our case, SocialGood. This means SocialGood handles the administrative work, such as managing investments, record keeping, tax receipting, and grant administration. By allowing PandaPay to shoulder the burden of execution and administration, you can focus instead on your charitable goals and advisements (not to mention the rest of your business). This model of centralizing and standardizing work is much more cost effective than running a private foundation. It’s especially helpful in auditing qualified charities, which can be an expensive and time-consuming process. More on verification here.
- Privacy DAFs are the only charitable-giving vehicle that allows donors to make grants 100% anonymously. When charitable sponsors administer grants on behalf of their donors, the charity is legally distributing its own assets, which means donors can choose to remain anonymous. PandaPay does not collect any data about donors beyond the minimum necessary to securely process donations and fulfill our obligations. We encourage charities and donation platforms to develop relationships directly if they’d like to share more information about giving patterns and donor data.
- Tax Deductible DAFs offer the maximum tax benefits allowed by law. Donors receive an immediate tax deduction when contributing to a DAF. Compared to private foundations, which can only deduct between 20% and 30% of their adjusted gross income (AGI) depending on cash or securities donations, corporations donating assets through DAFs can deduct 30% of their adjusted gross income (AGI), and individuals can deduct up to 50%. Contributions to DAFs receive fair market value deductions. There are no excise taxes on DAFs and, like other philanthropic vehicles, they can help donors avoid tax on capital gains. Of course, each individual tax situation is different and you should consult a qualified tax advisor concerning your specific situation.
- Investment prior to disbursement DAF assets can be invested and may grow tax-free, which means that with positive returns over time, more assets are available for charitable purposes than the original contributions. (Awesome!)
More on tax-deductible receipts over here.
Investment offerings for DAFs vary widely among charitable sponsors. The assets within DAFs legally belong to the charitable sponsor, which assumes all the risk related to managing and investing the assets. At SocialGood, investments are chosen by SocialGood in collaboration with consultants and investment advisors.
How do I designate my donations in the DAF for a particular charity?
Within the PandaPay API interface, you can mark individual funds for particular or immediate disbursement with the
destination_ein parameter on the
Donation object. This triggers the immediate creation of a
Grant object. Alternatively, a platform can hold funds in its balance and create a
Grant object separately at any point in the future. This future point can be determined by some logic relevant to your business model. In addition, PandaPay includes a
restricted parameter, which allows you to restrict donations to a certain project within a given charity (e.g., a donation to the Red Cross restricted only to disaster relief, or a donation to university restricted only to financial aid). If you’re a PandaPay API user, you’ll set these parameters via code. If you’re a PandaPay ECOM user, you’ll set these parameters via the Dashboard.
So… where does the money actually go?
PandaPay routes all donations through SocialGood. SocialGood then disburses the funds to your designated charity in accordance with IRS rules and regulations. Your donors or customers will make a donation or payment to your charity or business as usual – everything is taken care of on the backend. More on the donor experience here.
As required by federal law, exclusive legal control over donations is retained at all times by SocialGood until disbursed to your designated charity. However, if at any time your designated charity does not meet SocialGood’s criteria for receiving donations (e.g., it’s not recognized by the IRS as a public charity; it’s not accepting donations; it doesn’t meet SocialGood’s verification standards with applicable regulators, etc.), or if the nonprofit returns a donation to SocialGood for any reason, then SocialGood may, at its sole discretion, select an alternate charity for the donation or allocate the donation to a different fund maintained by SocialGood used solely for charitable purposes.
However, this is pretty rare. Once SocialGood receives your funds, it’s usually straightforward for them to make disbursements as you advise. More on disbursements here.
How does verification work?
PandaPay is built in compliance with IRS Revenue Procedure 2011-33, the authority for determining a charity’s eligibility to receive tax deductible contributions. Our system continuously reviews information from public data sources, so you can rest easy knowing your transactions are verified, legitimate, and compliant with federal regulations regarding distributions. In other words, our ongoing review ensures that your chosen charities are IRS-registered 501(c)(3)s.
We use proprietary compliance-check software built into PandaPay, which relies on data pulled directly from the IRS. Whenever you create a
Grant in PandaPay with a
destination_ein parameter, we run a compliance check. This assures that your contributions are tax deductible, and confirmed by your receipts.
PandaPay downloads information from five official data sources and uses this data to verify the good standing of beneficiary organizations in real-time:
- IRS Business Master File, in compliance with the Pension Protection Act of 2006
- Publication 78, the Cumulative List of Organizations described in Internal Revenue Code of 1986 (IRC) 170(c)
- Automatic Revocation of Exemption list
- Office of Foreign Assets Control (OFAC) from the Department of Treasury, in compliance with the USA PATRIOT Act
- Internal Revenue Bulletin (for revocations posted in the middle of the month)
These sources describe the extent to which grantors and contributors (including donors) may deduct contributions under § 170 and make grants under §§ 4942, 4945, and 4966.
Can you tell me more about Social Good Fund?
Social Good Fund (“SocialGood”) is a nonprofit public benefit corporation qualified as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, EIN: 46-1323531. SocialGood is classified as a public charity under IRC Sections 509(a)(2) and 170(b)(1)(A)(vi) and is headquartered in Richmond, California.
SocialGood works to create and establish positive influences for individuals, communities, and the environment. Its goal is to sponsor and develop projects that will help positively impact and develop local communities into healthier and happier places to live, to work, and to be.
Our collaboration with SocialGood is founded upon the mutual desire to innovate and improve fundraising mechanisms for nonprofit organizations through technology and data-driven approaches. To learn more about SocialGood, visit them at socialgoodfund.org.
After donations have been deposited into PandaPay’s DAF and cleared the verification procedures, SocialGood will disburse funds either to the requested public charity or to your own platform.
How do I make sure my donations go to the right charity?
Within the PandaPay interface, a donor platform can mark funds for particular or immediate disbursement using a variety of parameters within the API. More on designating donations here.
When and how does SocialGood disburse to charities?
SocialGood settles PandaPay
Transfer objects on the 15th of every month. Funds for each charity are collected, aggregated, and transferred to the charity. Currently, platforms submit their funds electronically to PandaPay via Automated Clearing House (ACH), and SocialGood sends a physical check to each charity, using the address listed on Forms 990 and the IRS business master file. This helps facilitate donations, since businesses often prefer to send money electronically, while many charities prefer to receive checks or are not equipped to receive a transfer of funds electronically. All disbursements are made in full compliance with the IRS's regulation of nonprofit grant-makers.
Our monthly disbursement schedule is designed to ensure that contributions made through PandaPay will be tax deductible and arrive at your designated charity without undue delay while also helping to maintain PandaPay's low fees. However, we are able to make exceptions for time-sensitive issues, such as disaster-relief scenarios. Please reach out to firstname.lastname@example.org to request more frequent disbursements.
What about collecting my platform’s associated fees and revenues?
When your business earns a transaction or application fee for its work associated with charities, our software distinguishes between donation funds and transaction fees owed to you. PandaPay records this amount as your
platform_fee. Revenues you generate on transaction fees in any given month will be aggregated and deposited by SocialGood into your bank account via ACH twice a month.
For example, if your business or fundraising platform charges a 5% platform fee on each transaction related to a charitable giving campaign, you might experience the following schedule:
- An individual donor makes a $400 donation through your platform on May 29th ($400 * 5% = $20)
- On May 30th, SocialGood will deposit $20 to your bank account via ACH
- An individual donor makes a $500 donation through your platform on June 5th ($500 * 5% = $25)
- An individual donor makes a $400 donation through your platform on June 12th ($400 * 5% = $20)
- On June 15th, SocialGood will deposit a single payment of $45 to your bank account via ACH
If you haven’t registered your deposit information with us, please contact us at email@example.com.
Who will I receive a receipt from, and is it tax deductible?
PandaPay immediately generates and issues tax deductible receipts on behalf of SocialGood to your platform for your donations. It’s also possible for PandaPay to generate two types of receipts: one for your platform, and one for your individual donors. Please contact us at firstname.lastname@example.org if you’d like to explore this option. More on receipts over here
I still have questions about disbursement. Who should I ask?
Please don’t hesitate to contact us at email@example.com with any additional questions.
C. Setting It Up
Whether you’re using PandaPay or PandaPay ECOM, our platform is designed for a seamless donation experience. Your visitors, customers, or donors will engage with your organization’s portal exactly as you see fit. Your developers don’t need to build and maintain custom software solutions to process and manage donations, or worry how such software might affect your pre-existing donation or e-commerce portal. Read on for more about what your customers will see, an overview of our API, and guides for getting set up with an e-commerce or direct donation platform.
1. PandaPay API
It’s simple: your donors or customers will experience the themes, branding, workflow, and communication created by your organization. Our tools let you embed charitable experiences into your existing platform, without creating any additional layers or requirements for your visitors. We explicitly avoid interfering with the relationship between your brand and your consumers. Charitable giving shouldn’t be an imposition on your business, and we make sure that it isn’t.
When customers donate or purchase from a platform that uses PandaPay, they will find the same kind of credit card or ACH payment experience as any other good or service purchased online. Once the transaction is completed, your customer is finished. PandaPay then takes care of verification, tax-receipting, and disbursement – nothing more to worry about.
Here’s what a typical donor experience with PandaPay might look like:
- An individual is invited to make a donation to a charitable campaign.
- The donor arrives at the campaign page on your platform.
- The donor or campaign page will identify the designated charity meant to receive the funds.
- The donor submits payment information using whatever payment form is powered on your platform. The donor will also submit an email address to receive their tax receipt.
- The donor’s payment information, as well as the intended charity’s EIN, is routed through the PandaPay API for processing.
- If the donation is directed to an organization that is out of compliance with the IRS, PandaPay instantly returns an error code to your platform. It’s then your platform’s responsibility to display the error message or denial to your users.
- Upon completing the transaction, if the donation is directed to a charity in good standing with the IRS, PandaPay delivers a 100% tax deductible receipt to the email address provided with payment information. This receipt comes from PandaPay on behalf of the Social Good Fund, and indicates the advisement of the charity chosen by your donor or company. Your platform may provide additional receipts to your donors as you see fit.
Ready to get started?
2. PandaPay ECOM: Donation processing for e-Commerce and SaaS
If you sell things online and want try out a cause marketing campaign, you are in the right place. We built PandaPay ECOM to bridge the gap between PandaPay and e-commerce stores or software as a service (“SaaS”) companies that are already using payment systems like Stripe to process transactions.
Similarly, some digital platforms and applications are already set up to handle direct donations to public charities using Stripe. PandaPay ECOM handles all of the administrative compliance work for existing platforms that use Stripe to process payments.
Setting up PandaPay ECOM
To get started, request access to PandaPay ECOM. We'll reply with an invitation to log in to the PandaPay dashboard.
Once you've logged in, choose "eCommerce" from the left-hand menu. A tutorial will pop up automatically to walk you through setting up your first campaign:
- Connect with Stripe
Use your Stripe credentials to grant PandaPay read-only access to your transaction history.
- Add Payment Info
Connect your bank account (ACH) or credit card. This is how we will charge you for the donations you pledged throughout the month, payment processing fees, and PandaPay fees.
- Create a Campaign
Under the Campaigns tab, you can create new campaigns or view past and present campaigns. Click "New Campaign" to begin. From the pop-up, you'll name the campaign, set the type of offer, choose a charity, and determine start/end dates.
Types of Campaigns
Not sure where to start? Here are some ways to think about types of campaigns:
|Types of charity campaigns||Site-wide||Product-specific||Customer-specific (members of a group want donations from their purchases to support specific causes)|
|Time-bounded||ex: Breast Cancer awareness month||ex: Lotion company launches a new product line to support Earth Day||ex: E-commerce store picks 5 charities to benefit. Customers vote with their purchases, and whichever charity racks up the most votes wins the entire donation|
|Ongoing||ex: Company donates 1% of all profits to charity||ex: Co-branded products, such as (RED)||ex: E-commerce store with a primary demographic of college graduates rewards customers by donating a portion of proceeds to customers’ alumni institution.|
Marketing Your Campaigns
Need help marketing your new social impact initiative? Check out our primer on getting started with a charitable marketing campaign.
Once you’ve selected a target charity, it can be very tempting to co-brand, or promote your campaign using a charity’s brand assets. However, for trademark reasons, you cannot use a specific charity’s brand assets (name, logo, etc.) without explicit permission from the charity to do so.
However, you can actively market that you are raising funds for a specific cause area. Charity Navigator classifies charities into 11 Categories and 37 Cause areas, which might be a good general starting place for your marketing campaign. For example, while you cannot market a campaign using the Susan G. Komen logo without the organization’s permission, you can advertise that you are raising money for breast cancer research. When in doubt, contact the organizations you’d like to work with for additional guidance on shaping your marketing campaign.
Laws and Regulations Around Charity Campaigns
Once upon a time before the internet, a company could take out a full-page ad in a local newspaper and promise that they would donate money to a charity if readers bought their products. However, unbeknownst to consumers (due to lack of real-time feedback or accountability mechanisms), the company might not follow through on their stated pledge, and benefit from misleading the public. In response, the United States developed a body of commercial fundraising laws to protect the public from companies maliciously using charitable incentives to influence consumer behavior, and instituted them at the state level.
Unfortunately, the downside was that these laws made it somewhat difficult for well-meaning companies to actually support good causes. Adhering to commercial fundraising laws typically requires the following lengthy process:
- For-profit company (“FPC”) asks a nonprofit organization (“NPO”) if they’d be interested in a campaign.
- FPC and NPO agree on a campaign structure together and the organizations’ respective legal teams draft a Commercial Fundraising Agreement. This process can take anywhere from 3–6 months depending on campaign scope and relative size of the companies involved.
- This Agreement is then submitted to the state attorney general and must be approved.
- In most cases, the FPC is not legally permitted to market the campaign or “influence consumer behavior with a charitable incentive” until this approval comes through.
(Yeah, we thought that sounded a little tedious, too.)
Fortunately, PandaPay helps you expedite this process. Your PandaPay ECOM Service Agreement, which is required when you connect with Stripe, will suffice for these registrations and agreements in most cases, and is intended to be exhaustive for all 25 states with commercial fundraising laws. Since all donations made via PandaPay are donations to the SocialGood Fund, your agreement stipulates that you can raise funds for SocialGood on an ongoing basis, and further advise SocialGood to make donations to other nonprofits.