Doing a Google search yesterday morning, the only advice I could find (I can't find the source today because the outcry over PayPal blocking Regretsy's funds is all over the blogosphere) was to not use the word "Donate" when accepting PayPal funds, but to use a phrase like "Buy me a cup of coffee" instead. Also, it appears that PayPal only holds funds like this when someone has a funding drive for a traditional charitable cause (disaster relief, toys for tots, etc.) but is not a registered charity (presumably to stop people fraudulently representing themselves as a charity when they are not).
Since I don't want to deal with the headache of having my PayPal funds put on hold, I have replaced the PayPal donate image with an image containing the words "Support MaraDNS development", and have removed the words "donate" and "donations" from MaraDNS' home page.
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