I can second this based on my own exeprience. A few months ago, I helped my son to set up a non-profit organization and a website to collect online donations (

I can second this based on my own exeprience. A few months ago, I helped my son to set up a non-profit organization and a website to collect online donations (http://sujal.org http://sujal.org), mostly from family and friends. I chose the non-profit option for the business type when the PayPal account was created, since the organization was registered as non-profit in my state and also because we intended to file for exempt status with the IRS (until we found that it costs $400 to do that, which is a story for another time.) A few weeks later, PayPal suspended the account. I contacted PayPal and after a few days going back-and-forth, I was told to change the business type to something that is not non-profit, and also to add a disclaimer along with the donate button to convey that the donations are not tax-deductible (see the above link for exact text of the disclaimer if interested). After doing this, the account was restored.