7 Best PayPal Alternatives for Nonprofits (By Category) [Updated 2023]
Many nonprofits rely on PayPal to collect donations. While it can seem convenient, PayPal comes with limitations that hamper your fundraising efforts. In the long run, you’ll be disappointed with PayPal’s many disadvantages, including a lack of fundraising features and branding opportunities. In this post, we’ll explore seven alternatives to PayPal for nonprofits.
While PayPal may seem like an easy option for fundraising, nonprofits looking to grow will find many limitations. In this post, we’ll explore seven alternatives to PayPal for nonprofits.
But before that, let’s have a look at why nonprofits often look for PayPal alternatives.
Why do Nonprofits Look for Alternatives to PayPal?
It’s important to be aware of the pros and cons of any donation processing software before signing up for their services. PayPal has a number of drawbacks when it comes to fundraising for nonprofit organizations.
Disadvantages of using PayPal for nonprofit fundraising
Inefficient for fundraising – PayPal was not created with nonprofit fundraising in mind, therefore it lacks some of the features that many fundraisers would consider industry standard. For example, you cannot expect to create an engaging fundraising page, no way to create event pages and ticketing forms, the donation form is as basic as it possibly can be, and more.
Inadequate recurring donation options – With PayPal, recurring donations are limited to monthly or nothing. There are no options for weekly, quarterly, or annually recurring gifts. This is a big drawback for religious organizations and churches that want to collect weekly tithing donations, as well as membership organizations that wish to automatically renew yearly contributions.
No focus on donor experience – Donors are not able to log in and adjust their recurring gifts, update their information, download their tax receipts, and give on the go. All these features are important for nonprofits to offer their donors some control over their donation plans and receipts, and overall a reliable donation experience.
Lack of tracking and analytics – PayPal does not offer conversion tracking or donor information collection. Tracking campaign data and understanding performance analytics help nonprofits plan their upcoming fundraising campaigns better. It helps them ramp up marketing efforts and more.
No branding opportunities – PayPal’s donation form has very limited customization and does not allow you to express your organization’s preferred branding elements.
No way to avoid processing fees – With PayPal, there is no option to ask your supporters to cover the donation processing fee. Studies show that 50% of nonprofits have enabled this option on their donation forms and about 53.4% of total donations are covered by donors when they see this option.
No option for anonymous donation and donation designation – PayPal does not offer donors the opportunity to make an anonymous gift, or to direct their gift toward a specific project. Many donors prefer to have the control to decide where their donations should go and a drop down like this on the donation form can encourage more donations.
Lack of crowdfunding and peer-to-peer features – PayPal does not offer crowdfunding features such as a landing page, goal meter, donor wall, and updates to supporters. Nor does it have peer-to-peer fundraising features such as letting nonprofits invite supporters, send automatic invites, help create fundraising campaigns of their own, and share on their social media network, etc.
No text-giving option – It doesn’t have text-to-give functionality. Churches, political campaigns, and emergency fund campaigns benefit a lot from the simple text-to-give feature. These days, even other nonprofits have started opting for this feature to make giving easy for their donors.
Pre-approval/ registration process involved – A verification process is required to confirm your organization is a charity in order to access PayPal’s charity features.
Not the cheapest option out there – When you’re a registered charity (and pre-approved by the PayPal team), you get a discounted processing fee of 1.99% + $0.49 for domestic transactions. For receiving international donations, an additional 1.50% gets added to this. This can be a lot, especially when your donors cannot choose to cover the fees.
Visitors are taken away from your website – PayPal is a 3rd party solution. It means your donors will have to leave the donation page/your website to complete the donation. Chances are they will not return to your website and sometimes, even stop the donation process midway and leave altogether.
Non-customizable receipts – PayPal doesn’t allow you to customize donation receipts for your donors and this often hampers their impression of your nonprofit.
Apple Pay is not available as a payment method with PayPal.
7 Best PayPal Alternatives for Nonprofits
As you can see, while PayPal is well-known, it lacks many of the features that allow fundraising professionals to meet donors’ needs and better serve their organizations.
Let’s explore some alternatives with better features and figure out which one might be best for your nonprofit.
Best All-in-One PayPal Alternative for Nonprofits
Donorbox is a seamless all-in-one nonprofit fundraising solution trusted by more than 50,000 organizations from 40 countries around the globe. In just 15 minutes, you’ll be all set to start accepting donations!
Donorbox is user-friendly and can easily integrate with your existing website with no coding knowledge. It also offers features like crowdfunding, peer-to-peer fundraising, text-to-give, flexible recurring giving, donor management, event ticketing, membership campaigns, and more. Let’s have a quick look at some of the most interesting aspects of this powerful alternative to PayPal!
1.1 Secure payment processing
Donorbox uses Stripe as its main payment processor, which is a trusted, PCI Compliant software. It also utilizes anti-fraud tools and SSL/TLS encryption technology to protect you and your donors. It tokenizes all financial data and does not store your supporters’ credit card or bank account data.
1.2 Donation forms
With effective features like easy branding, multi-currency support, donation tier, donation designation, tribute donations, employer gift matching, customized questions, etc., Donorbox can help you turn your simple donation forms into an all-in-one solution for successful fundraising.
1.3 Recurring donations
Donorbox allows your supporters to set up and manage their own recurring giving plan. This assures your donors that they’ll have a sense of control, flexibility, and security with regard to their giving. They can also upgrade, downgrade, or change the frequency of their giving as they wish. Here’s an example of a recurring Donorbox donation form on Muso‘s website.
1.4 Text-to-give campaigns
Text-to-give fundraising lets your donors give easily to your cause, just by sending a text. With Donorbox, you can set up a text donation campaign in just 60 seconds – and your supporters can give with any iPhone, Android, or Windows phone! You can also choose a short-code plan with a custom keyword. Learn more about Donorbox’s text-to-give features.
1.5 Crowdfunding and peer-to-peer campaigns
These days, your fundraising strategy is incomplete without plans for crowdfunding or peer-to-peer campaigns. These are the best opportunities for you to boost the outreach of your campaigns, acquire new donors, and increase donations. Donorbox lets you create such campaigns very easily with just a few toggling of switches and checking checkboxes. The below example is of a successful crowdfunding campaign by Seeds Wilderness Therapy.
1.6 Automated and customized tax receipts
Your donors will automatically receive an emailed tax receipt from Donorbox for each donation. This saves your team a lot of time by not having to prepare and send tax letters for each gift. Donorbox’s receipt template is completely customizable, so you can add your organization’s information or a special message with utmost ease.
1.7 Donor management
Donorbox allows your organization to easily collect and manage donor information, and sort the records based on donation amount, frequency, date range, location, and more. You’ll have a list of moment alerts every time a donor upgrades or cancels their recurring plan, makes a first-time gift, or completes their giving anniversary. Your donors will have a dedicated donor portal where they can log in and manage their recurring plans and QuickDonate to make a donation on the go.
1.8 Event-ticketing forms and membership campaigns
Your fundraising plan includes events. Donorbox lets you create simple event-ticketing forms, unlimited ticket types, and manage the sold tickets and purchasers’ information at the backend. If you happen to have a membership program, you can also use Donorbox to create membership campaigns and let your members manage their monthly and yearly membership plans on the tool.
Pricing: Donorbox requires no set-up fees, no monthly fees, and no contract. The platform fee is nominal, starting at 1.75% for the Standard plan. This can further be reduced to a flat rate of 1.5% for all fundraising tools if you upgrade to our Pro or Premium plans. These plans are curated to help grow and scale your fundraising efforts. There’s also a small processing fee but guess what – you can save money with Donorbox by empowering donors to cover the processing fee!
Donorbox also offers nonprofits Donorbox Premium – the ultimate fundraising solution to realize their donation potential with a dedicated account manager, fundraising coach, priority support, and tech wizards at the affordable pricing of $399/month (paid quarterly) and $375/month (paid annually).
Here’s a quick comparison video on how Donorbox can better help you with all your fundraising needs:
Bloomerang is a donor management system that also offers payment processing through Stripe and Moolah. With Bloomerang, you can keep track of donor information, collect donations through online forms, design emails, and more. Bloomerang also integrates with a variety of marketing and administrative tools and apps.
While Bloomerang offers some of the same functionality as a tool like Donorbox, its pricing model is different. One drawback is that as the size of your nonprofit’s records grows, your pricing with Bloomerang will increase, too.
Pricing: Bloomerang ranges from $99-$599 per month, depending on how many records or contacts you track in their system. For 60,000 or more records, you will need to get in touch with their team. You’ll have options for more add-ons. Additional payment processing fees also apply.
Best PayPal Alternative for Payment Processing
This payment processor is managed by VISA. Authorize.net allows you to accept global payments by credit card, contactless payment, and eCheck. With advanced fraud detection and the power of VISA behind it, this is certainly a trustworthy payment processor.
However, any system that isn’t designed with nonprofits and donors in mind is going to lack some of the functionality that development professionals need. In this case, Authorize.net doesn’t offer options for crowdfunding or text-to-give campaigns. Plus, language like “billing subscription” rather than “monthly gift” can feel generic, cold, and off-putting to donors.
Pricing: Authorize.net has 2 plans – the all-in-one option where they set you up with a merchant account as well as a payment gateway and just a payment gateway option. They charge a monthly gateway fee of $25, plus transaction fees that vary depending on the plan you choose. Know more about their pricing here.
Cybersource is also powered by VISA. This PayPal donation alternative offers a focus on global compliance and security. As a result, this is a flexible and convenient option for international organizations that have a global donor audience.
Cybersource’s worldwide payment acceptance network allows you to accept donations in up to 50 currencies from supporters in more than 190 countries and territories. You can also accept money from digital wallets and alternative payment methods.
Stripe is a well-known global payment processor that partners with many other software systems (including Donorbox!) It’s a reputable processor and you can embed its donation forms directly into your nonprofit’s website.
However, Stripe lacks some of the features that make other systems ideal for nonprofit fundraising. For example, donors aren’t able to log in and manage recurring gifts. And, its customization options are more geared toward people with coding knowledge.
While Stripe does offer a “recurring payment” option, it’s set up under their Billing tool, for businesses that are billing customers with subscriptions or monthly invoices. They focus their services on traditional corporations selling products and services, rather than nonprofits working to raise funds and manage donor relationships.
Pricing: Stripe’s standard pricing is a 2.9% credit card processing fee plus 30 cents per successful card charge. For better understanding, quickly calculate the Stripe processing fees for specific donation amounts in this handy CheckYa Stripe Fee Calculator. However, if you apply and qualify, it offers a reduced rate for nonprofits. Know about their terms and conditions here. Other fees apply for ACH bank transfers, debit payments, and additional payment methods.
Venmo is a digital wallet suitable for individuals as well as nonprofits. Nonprofits can create a business profile to get started. On the other hand, users can download the Venmo app on their Android or iOS phone, create an account, and link their bank accounts, credit/debit cards to it to start using the payment service. Alternatively, users can also put money in their Venmo account to make payments at any point in time.
For nonprofits, the best feature would be the advantage of social proof. People can share their transactions and comments with their friends on Venmo’s “friends feed”. That increases your chance of reaching their network and more people. Moreover, for your supporters, it’s convenient. It will take them only a minute to complete the donation process right from their wallet or the linked bank account.
Venmo can be an alternative as well as an additional option. Choose a fundraising tool that easily integrates with Venmo. Donorbox lets your supporters donate via Venmo digital wallet both on mobile and desktop via PayPal Checkout. It is hugely popular, giving your donors a quick, trendy payment option to give.
Pricing: A business profile is charged a nominalfee of 1.9%+$0.10 for every payment they receive that’s $1 or more. This means that if your nonprofit receives a $100 donation, $2 of it would be deducted as a transaction fee and you would receive $98.
7. iATS Payments
Unlike some of the other options mentioned above, iATS was specifically created with nonprofits in mind. Its mobile app allows you to securely accept payments on the go at fundraisers and events. It also allows your donors to opt to cover the processing fee for their transactions. 15,000+ nonprofits trust them with their payment processing.
iATS’ online donation forms are uncomplicated and easy to set up. That is because they have built their forms to be a “basic and affordable” option. But this also means that you won’t be able to create a donation form with a ton of customization and special functionality without coding knowledge or a third-party partner.
When choosing a payment processor, it’s important to consider a variety of factors. Think about which system will allow your nonprofit to best connect with your donors in the years and decades to come. Also, consider whether your payment processor offers enough customization and features you need. For example, the ability to create a beautiful, trust-inspiring donation page with flexible recurring gift options may perform better than a generic page that only allows for monthly giving. It is always advisable that you choose a system that takes care of everything in one place while also keeping it affordable for your nonprofit.
With a streamlined, affordable, and user-friendly solution like Donorbox, you can put your organization’s best foot forward and focus your time and energy on the work that truly matters. Sign up here for free. If you want to take time to go over our features, visit our website here.
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Heather is a writer, business owner, and nonprofit professional. She is a Certified Fund Raising Executive (CFRE) with more than a decade of experience leading fundraising efforts and creating communication materials for arts, education, and social services nonprofits.