There are two ways to connect a PayPal account to Outpost depending on whether you have a personal account or a business account. It is a far better integration if you have a business account.
If you already have a PayPal business account and want the instructions on how to connect it, see this guide. If you have a personal account and do not have a business setup for your newsletter, follow these instructions for the personal account.
If you have a business entity for your newsletter, but do not yet have a PayPal business account, the best thing to do is to go to PayPal and apply for a free business account, or upgrade your current account to a business account.
Outpost integration's with PayPal is far superior with a business account, and having a business account will make your accounting and taxes easier. See it in action below.
It doesn't take PayPal very long to approve a business account once you give them the required paperwork, but if you really want to set up the Tip Jar before they approve that, you can follow the instructions for personal accounts and then update it to a business connection when you are approved.