With most US banks it's super-easy to have multiple subaccounts and transfer money between them via online banking.
Sure, they'll send nasty letters asking you to rectify the negative balance in your account, but if you are in the right it's a lot lot lot easier to work from this position than when they've taken or frozen your money.
I hate to be the devil's advocate here, because it looks like HFC was truly wronged. But still: an off-shore not-quite-yet-a-charity with no paper trail, no office, and no contact info beyond a web site is hardly a paragon of transparent legitimacy. Put "hacker" in the title and things get worse for the poor PayPal pencil pusher to figure out. I'm not surprised at all that someone got cold feet and pulled the plug. That doesn't mean PayPal is "right" to do this. But their motivations are pretty clear to me.
One lesson here is that organization is your friend. A few weeks spent filling out 501c3 forms and establishing banking records (maybe finding a pro bono accountant, too) would have obviously been a good idea in hindsight. Charging off to Africa shouting "Give me money!", not so much.
But nevertheless, a online payment thingie that doesn't suck? Sign me up!
Keeping your money in PayPal is a massive risk. As a customer, you have no protection, no deposit insurance (covered by your Federal government in Canada and USA), and basically when things go wrong, you are stuck with sending emails and legal action.
What a massive scam. Spread the word: avoid PayPal.
Although this is about PayPal, any bank would probably respond the same way. Try depositing a check made out to your business into a personal account. Most banks will simply refuse to do so. You can go into the bank and show tons of documentation that you own the business AND if it's an emergency AND you get the bank manager involved they may bend the rules, but usually it simply won't happen. Trying to resolve that over the phone? Forget it.
What this guy is doing (HFC) is a great cause, but the entrepreneurs out there should read this as a cautionary tale. It's because of stuff like this that we need to get our business finances set up properly from the beginning. A few minutes spent filing paperwork a year ago would have prevented all his problems.
Banks (yeah, I know PP isn't a bank) don't screw around!
If PayPal or a bank didn't insist on these strictures, imagine the outrage when someone's accounts are cleaned out by some fraudster with flimsy, half-good credentials.
Especially when traveling (especially to Africa!) you have to arrange things carefully in advance. Maybe someday things will be smoother, but it's still messy in 2009.
Hackers: Learn to hack your finances, too.
He has a book out by the same title, all proceeds from the book go to the charity.
