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Donations links to PayPal are against Google's policy unless you're a verified non profit (ie WWF). Google treats donations as income and you must use their in-app billing. This isn't a rumor about being suspended anymore, I contacted them myself.
Please reshare to other developers!
Actual message below:
Thanks for contacting Google Play Developer Support with your question about donations.
While we do not currently offer a donation feature, if you're a certified 501(c) you may use Play in-app billing or a secure third party system to collect payments. Please note there is a 30% transaction fee for all Play in-app billing transactions.
If you are not 501(c) certified, you may not accept donations on an app provided through the Play Store. This includes the implementation of a PayPal link.
If you have any further questions regarding Google Play policy, please visit play.google.com/policy or contact your legal representative.
Thanks for supporting Google Play!
Google Play Developer Support
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