Running charity events on Twitch has become very popular. Finding out how to donate on Twitch as well as receive donations are popular questions. It makes sense really. You, suddenly, have a platform where regular people have a voice. These people can build a base around their personality and their talent to entertain. Therefore, when they go to help someone, then they are going to use this platform because, in theory, it has been good for them. It is where their community is located and it is where they can gain donations from them. Maybe you have seen your own favorite streamer go down this road of a charity stream and wondered, rightly so, how do they donate that money when that big box processor is eating into their donations with fees? You would be right to think this thought.
The truth is that most of these people are not business people and they are making do with the knowledge they have right now. Most people would agree that the fact they run the charity stream is more than enough because it will have a positive net effect on the charity of their choice. However, it could be done better if the streamer knew what they should be doing or have set up beforehand to maximize their donations. What should they know? They should know that they need to set up their business with a tax structure. The truth is that most of them just startup with their own name which, in the beginning, is ok. However, the truth is that not having a legal structure opens your personal assets up to seizure through litigation. This is a bit of a side tangent that will make sense in a bit.
If you set yourself up correctly, for your situation, and make the right moves then you limit what can be taken from your business or you because you will be seen as two different entities. What does legal structure really have to do with getting donations? The truth is that most of the big box systems for payments are built for businesses who work for a profit. Therefore, they take a lot of fees or add hidden fees. You want to use a system that is made for non-profits. You are going to need a legal structure that has an EIN. Most of these companies only work with companies with EIN’s and not sole proprietors. If you want to maximize your donations without a lot of fees then you want to create a company and use that structure so you can sign up for one of these online donation services.
Obviously, you should talk to experts about what structure you should take and what actions you should take. This is not advice on how you should structure your business. But, do keep in mind, that if you want to use a non-profit processor of donations then you will, likely, need an EIN to get into the system.
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