Instant Payment Notification (IPN) is a message service that notifies you of events related to PayPal transactions.
If you have chosen to allow Soapbox Donations and Soapbox Events transactions to be made with PayPal, It is also the service that these tools use to confirm payment with PayPal once your visitor has been directed to PayPal's website to complete a transaction.
You do not need to specifically enable IPN for your account when using this option. Soapbox communicates all needed information to PayPal so that confirmation of payment can be sent back to Soapbox.
To allow visitors to pay through PayPal in addition to the option of paying with a major credit card without leaving your website, turn on this option in the Soapbox Donation or Soapbox Event in question.