Ask HN: Our nonprofit got shut down by PayPal. Help?
We’re currently running an electronics grant program (https://hackclub.com/winter/) to support teenagers in building hardware projects. Hundreds of grants are being distributed to teenage coders all across the world. It’s open source at https://github.com/hackclub/winter.
PayPal just shut our account down with no explanation, and denied our appeal. They told us that any funds in PayPal will be held for up to 180 days. They also said they will no longer process donations to us, with no explanation. Many of the hardware grants we’re doing, including nearly all grants outside the US, require PayPal to process.
If anyone here might be able to help in any way, we would be so appreciative. We are actively going through their customer support channels, but not getting much in the way of next steps. My email is zach@hackclub.com.
54 comments
[ 5.5 ms ] story [ 121 ms ] threadI'm hoping there is a viable alternative to both Paypal and Stripe as this keeps happening to small businesses.
Why do businesses need to put up with this?
I'd imagine that any competitor would get caught in the same regulatory tarpit these other companies have found themselves in.
It's not always an option for small businesses but the best mitigation is to sign an agreement. Instead of just using the standard pricing agreement on the front page, ask for a contract with few years commitment and maybe a modest discount on fees in exchange. They now have a legal obligation to allow your business to function.
Crypto solves some of the specific problems that people repeatedly have dealing with mega-corporations and/or fiat currencies.
HackerNews has the collective memory of a goldfish when it comes to crypto. We constantly see peoples' money being stolen and messed with, but then a smug elitist comes out of nowhere and says "Well, ackshually, there's no possible use case for crypto." Absolutely disgusting that we cannot learn from history.
Which are?
> We constantly see peoples' money being stolen and messed with, but then a smug elitist comes out of nowhere and says "Well, ackshually, there's no possible use case for crypto."
Yes, with the same 'smug elitists' building, funding crypto exchanges built as a giant ponzi scheme that inevitably crashes and burns to the ground and lose everyone's money in the process.
Maybe it isn't a good idea to try and speedrun all the asset bubbles of financial history.
> Absolutely disgusting that we cannot learn from history.
Tulip Mania (1634)
The South Sea Bubble (1720)
Comic book speculation bubble (1985-1993)
Beanie Babies Bubble (2000)
They all end in the same way.
> Which are?
You are literally responding in a thread about money being allegedly stolen from a non-profit by a mega-corporation.
Are you pretending to not see a possible use-case for crypto in any arc of this story?
Sad! Many such cases.
> Yes, with the same 'smug elitists' building, funding crypto exchanges built as a giant ponzi scheme that inevitably crashes and burns to the ground and lose everyone's money in the process.
The problems with centralized exchanges are not problems with crypto in and of itself. The crypto way of thinking about exchanges is actually "Not your keys, not your coins".
> Maybe it isn't a good idea to try and speedrun all the asset bubbles of financial history.
There's many reasonable debates and disagreements about how you define crypto and what it currently is and what it will be, but there's significant qualitative differences between crypto and these other examples.
For instance, a farmer can grow more tulips and flood the market. Or a tulip easily ages and dries out and has no value. But there can only ever be 21 million Bitcoins, and they exist forever.
A beanie baby sort of just sits on a shelf, collecting dust, and silently judging you. But crypto has amazing possible real world utility without even thinking about its value as money, such as being a decentralized programmable tool.
Because this is irrelevant.
> You are literally responding in a thread about money being allegedly stolen from a non-profit by a mega-corporation.
Are you pretending to not see a possible use-case for crypto in any arc of this story?
Sad! Many such cases.
Yes, the many such great usecases being, enabling ransomware, speculation, scams and rugpulls and losing your money due to volatility. Any usecases crypto tries to provide or replace is never any better than the current financial system.
We have UPI which launched in 2016 with already over hundreds of millions of active users using it for P2P payments, a goal that Bitcoin was supposed to achieve but completely failed in doing so.
Anything Bitcoin can do, the current financial system can do it already or even better, safer with less energy needed.
No matter how you dress it up, Bitcoin and all the other cryptos have no legitimate usecase whatsoever.
I made the point in a bit of a flippant way, but the strong authoritarian leanings of the people who dislike crypto are not an irrelevant point to me. Why are the people who seem to like telling others what to do the most also the ones who hate crypto the most? This pattern really activates my almonds.
> Any usecases crypto tries to provide or replace is never any better than the current financial system. We have UPI which launched in 2016 with already over hundreds of millions of active users using it for P2P payments, a goal that Bitcoin was supposed to achieve but completely failed in doing so. Anything Bitcoin can do, the current financial system can do it already or even better, safer with less energy needed. No matter how you dress it up, Bitcoin and all the other cryptos have no legitimate usecase whatsoever.
1) Once again, you're literally responding to a story where a non-profit allegedly got their money stolen by a mega-corporation. How did the current financial system protect them? (even if this case isn't accurate, you could substitute many other news cases. Just search for "paypal stole" in HackerNews for a pile of examples, just from one company)
2) I assume you're referring to India's UPI. I'm sure that this kind of financial infrastructure works phenomenally, just until the point that you're a political adversary and the government decides that it wants to mess with your ability to transact to stifle your voice. For people on society's margins who speak inconvenient truths, crypto's inability to easily get shut down is an advantage that the existing financial infrastructure cannot offer.
> For people on society's margins who speak inconvenient truths, crypto's inability to easily get shut down is an advantage that the existing financial infrastructure cannot offer.
2) You mean like criminals, drug dealers? As I can only see this group being on 'the margins of society' being empowered by crypto. Just because one system is imperfect, does not mean you replace it with a completely worse system that doesn't work for anybody.
Holy Gaslighting Batman, this is on another level.
Imagine what you'd think if somebody grabbed something you needed and while he was running down the street, told you that it's not stolen because he pinky swears to give it back in half a year. The belief that it might be returned later is immaterial to the concept of theft. If you can't do what you want with your own property, is it not stolen?
You keep talking about being against criminals, but are willfully ignoring a theft that's right in front of you.
> 2) You mean like criminals, drug dealers? As I can only see this group being on 'the margins of society' being empowered by crypto. Just because one system is imperfect, does not mean you replace it with a completely worse system that doesn't work for anybody.
Whenever governments want to enact something dystopian, they always justify it by claiming that it's going to fight the worst person they can think of to get popular sentiment on their side: like terrorists and murderers. Those kinds of criminals are very easy to spot.
But what happens when governments declare it a crime to speak out against the government?Those people are also labeled criminals, and have their funding seized.
This isn't a theoretical discussion: this happens every time authoritarians take power. They of course seize any funds from protestors to limit any political opposition. This isn't even limited to some 3rd world countries, but also happens in prosperous Western countries.
So it isn't really theft at all if PayPal still holds the funds. If the funds are completely out of PayPal's hands and not in your account, then it is stolen.
In fact, should we compare to crypto sector, once you money is stolen or sent to the wrong address, there is NOBODY you can ask to get your money back, ever.
This is what I mean by you trying to augment or replace the current financial system with an even worse completely libertarian and utopianist system and whatever you say on 'dystopian governments' doesn't change this fact.
Even if we take your 'dystopian governments' view, when they control the crypto exchanges, there will be no way you can swap or or anyone to accept your worthless magic beans to fiat when this will be made illegal.
We apparently have an irreconcilable disagreement about the nature of theft and I don't think there's any common ground to discuss this further. I sincerely hope you never get stolen from in this manner. If some mega-corporation locked up your needed funds for 180 days though, I doubt that you'd be contorting yourself trying to justify why it's not actually theft.
> Even if we take your 'dystopian governments' view, when they control the crypto exchanges, there will be no way you can swap or or anyone to accept your worthless magic beans to fiat when this will be made illegal.
1) Who said anything about trading crypto for fiat? The purpose of money is to trade for goods and services. If crypto exchanges are shut down, you can still trade directly with other people. (This I think is what puts self-righteous authoritarians in a tizzy: there's no way to perfectly control other people with crypto.)
2) I'm not sure what magic beans you're referring to. Are you referring to the magic beans that are backed up by nothing and which are printed indefinitely?
Who do you go to when your crypto funds go to the wrong address?
Or more commonly, Who do you go to when your crypto funds are drained from your wallet?
We both know you cannot go to anybody ever in any situation and is the reason why crypto is a failure especially as a currency, payments and for everything else.
At least we know the funds are frozen and held by PayPal (which we can hold accountable) and not some shady exchange that went offline, or some random person's wallet address.
So once again, you have proposed a monumentally worse system that nobody or any business wants to use or deal with in the real world, and the erratic crypto volatility wouldn't help the situation either should such a bad situation happen.
> If crypto exchanges are shut down, you can still trade directly with other people.
Many have tried this with crypto and this has completely failed as unrealistic at any scale.
The government won't accept your crypto / magic beans as a way to pay your taxes. They won't accept it now, and they won't accept it when the crypto exchanges are shutdown.
> Many have tried this with crypto and this has completely failed as unrealistic at any scale.
1) I know it's scary, but living with personal responsibility can be a thing that some people actually want.
2) We're extremely early into the invention of cryptocurrencies. Bitcoin is only about 14 years old. Better interfaces and best practices for how these things are handled and moved around are developing. You remind me of somebody being around in say 1978, seeing the simple computers of the day, and remarking that there's no practical use for normal people having a computer because you think that they currently suck and cannot conceive of them improving.
3) Look at human economic history. It took humans in some cases hundreds of years to figure out what we might see as best practices for new accounting concepts or technologies. Some kind of basic ledger system with tablets, sticks, or other implements proving that a tax payment or loan was made took a long time to figure out. Humans didn't know how to handle silver coins initially, it took time to figure out that hey had to put ridges on gold/silver coins to prevent certain people from clipping chunks off them. Fiat has been around a while and many humans still haven't made the connection between printing money and inflation directly robbing them. Is it any surprise that crypto isn't completely developed just 14 years in?
> nobody or any business wants to use or deal with in the real world
Do you not notice an inherent contradiction in what you're saying: why would you need to block exchanges if nobody wants to use it in the real world?
> The government won't accept your crypto / magic beans as a way to pay your taxes.
"Use fiat. Not necessarily because you think it has the best attributes for you, but because men with guns will throw you in a metal cage if you do not."
Not the most persuasive argument for me, sorry.
Right, so it's the OP's fault if you get your wallet randomly drained by hackers and you admit that once a bad actor drains your funds you cannot retrieve them again. This is really helpful for the OP.
> 2) We're extremely early into the invention of cryptocurrencies. Bitcoin is only about 14 years old.
It is not early days at all. Repeating this meaningless cultish incantation doesn't mean or do anything. There are other payment systems that I have mentioned that are proven to be WAY better than crypto.
To be on topic to help the OP, all your arguments have further convinced me that crypto is absolutely NOT the answer to help this person should a situation like this happen.
I don't think anybody would want to use a system that has no fraud control, isn't regulated and doesn't protect their funds.
It seems to me you feel that we need to waste almost 12BN in crypto scams, rugpulls and ransomware just to build the future of finance without need for the state.
Have you stopped to consider that what crypto might be building is, a much much MUCH worse system that what is currently marketed towards victims?
> Why would you need to block exchanges if nobody wants to use it in the real world?
As I said before, the only use case in all of this is price speculation and the exchanges facilitate this and also harbour the selling of illegal securities. There is no other legitimate use case.
And after FTX, there is no convincing anyone anymore and you're completely losing a very very uphill battle and resorting to fanciful, loony pie-in-the-sky libertarian arguments.
It's more of a case of current system already uses fiat and it works better than what crypto is trying to replace.
https://www.paypal.com/us/webapps/mpp/givingfund/home
https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...
Unfortunately, while posting on HN can resolve Stripe issues, it doesn’t help with PayPal. You need to find a human advocate within PayPal (especially difficult if you’re not already connected with any humans there now that you’ve been suspended).
Start planning for this to not be resolved, because it rarely is. Financial account shutdowns are very rarely reversed. Start making alternate arrangements, preferably with a company that can allocate a human to you who understands and supports your use-case(s) — financial service relationships should always have humans involved if they’re integral to your business. I’d recommend contacting Wise (formerly TransferWise) to see if they can meet your future needs.
Do you have any suggestions on how we might be able to get in touch with someone who could advocate for us? My email is in the OP if that helps.
I know we have struggled with Wise in the past (they couldn’t process our grants to people in India), but will look into again to see if they can help.
Ultimately, offering financial services is more risk management than it is software: the reason PayPal has so many bad stories is because people think that if you can open an account without talking to a human, you can do anything the system allows without talking to a human. Unfortunately, that means once you’ve been labelled a risk, you’re in a very difficult position, as no human is going to bat for you after you’ve already done risky things.
This is a common problem for nonprofits, where people will try to test stolen credit cards on your donation forms. We are in good standing with Stripe and process lots of donations through them.
If you are going to use your status as a non-profit to virtue signal, I have to scrutinize your form 990 first.
https://apps.irs.gov/pub/epostcard/cor/812908499_201912_990_...
> Expect delays in data updates for the Tax Exempt Organization Search tool. We are still processing paper-filed 990 series received 2021 and later.
https://www.irs.gov/charities-non-profits/search-for-tax-exe...
I don't know anything about this, but that does kind of sound like forms from the 2020 FY and onward may not all be online yet.
You can see up to 2020 on https://the.hackfoundation.org/. 2021 should be published soon.
We make our finances 100% transparent in real-time at https://bank.hackclub.com/hq/. Almost all the code written is open source at https://github.com/hackclub.
You can try calling them: +1-888-221-1161
They’ll be very nice, but lie to you about “looking into it”.
I’ve been told 3 times they’ll call me back in 2 business days and they never do.
I bet if you used some words similar to this in PayPal receipts regardless of context, you'd probably also risk your account being automatically blocked: drugs, terrorism, porn, sex, alcohol, money laundering, slavery, guns, nazi, murder