7 Reasons Why PayPal is Not the Best Option for Churches (& Its Alternative)

PayPal might be a popular way to accept donations to your church but it is not the best! PayPal for churches has a number of drawbacks and limitations that will stop you from boosting your donations, retaining donors, and turning one-time givers into long-term supporters. Learn in this article how you can use an alternative like Donorbox which has a dedicated pillar focused on church giving to help churches keep the funds flowing all year round.

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7 Reasons Why PayPal is Not the Best Option for Churches (& Its Alternative)

If your church or religious organization is considering using PayPal to accept donations, it might be worth thinking again. PayPal is a widely used payment method for many purposes. But, using PayPal for churches can have some disadvantages.

In this post, we’re sharing 7 reasons why PayPal online giving isn’t the best option for churches. Among higher processing fees, longer set-up times, and limited branding options, there are better options than PayPal for churches.

Consider using a solution like Donorbox that was designed specifically with the church and nonprofit fundraising in mind. More than 35,000 organizations from 40 countries use Donorbox to process gifts. Its customizable donation form, powerful features like text-to-give, and low platform fees have helped thousands of churches across the globe. Here’s a short 1-minute video to show you how – 

Donorbox’s gift processing software and fundraising tools were created to help you increase donations to your cause. Plus, your supporters will enjoy a friendly, seamless donation experience.

7 Reasons Why PayPal is Not the Best Option for Churches

  1. Longer setup process
  2. Higher processing fees
  3. Rigid recurring donation options
  4. Slower to receive funds
  5. Disjointed donation experience
  6. Nonprofits foot the bill for processing fees
  7. Cannot send customized receipts

1. You’ll have to go through a longer setup process

Setting up a PayPal “donate now” button for your church can be a complex process. First, you’ll need to set up an account.

Creating a PayPal for churches is a process that requires providing a wide variety of legal and contact information about your business and yourself. You’ll also be asked for details like your EIN, your social security number, business and home address, a bank account, and more.

Only then can you begin the process of even creating a PayPal donation button to begin processing donations and tithes for your church.

With Donorbox, you can create a customized donation form and start fundraising within just a few minutes. Learn how!

Donorbox Church Fundraising

2. Your church will pay higher donation processing fees

Donation processing fees are a normal part of online fundraising and to be expected. But, most churches, nonprofits, and donors would rather the money go toward their cause than be eaten up in fees.

PayPal’s standard processing fee is 2.9%, plus $0.30 per donation. Eligible 501c3 charities can apply to receive a discounted nonprofit rate of 2.2%, plus $0.30 per donation.

Knowing that some donors prefer to use PayPal, Donorbox has partnered with PayPal. This allows churches and other organizations to accept PayPal donations while also taking advantage of Donorbox’s fundraising tools for churches.

Plus, Donorbox gives your donors an option to cover donation fees themselves as well as set up and manage their own recurring gifts and tithes.

3. Recurring gift options are rigid

When asking donors to support your church with a recurring gift, it’s best to make the options flexible.

Some supporters might want to give monthly. Others may wish to set up a recurring weekly tithe. Or, church members might wish to make a recurring annual donation in the loving memory of someone who has passed.

While PayPal online giving allows your church to accept recurring monthly donations, they do not offer options for weekly, quarterly, or annually recurring gifts. This “monthly-or-nothing” recurring gift option can be extremely limiting.

Donorbox allows you to offer one-time, weekly, monthly, quarterly, or annually recurring gift options. You can even highlight your most preferred recurring donation interval.

paypal church donations

Get Started With Donorbox

Plus, donors can log in and manage their recurring plans. You’ll receive a notification when a supporter upgrades, changes, or cancels their recurring donation. That way, you can engage all of your donors in meaningful ways. 

4. It’ll take a bit longer to receive funds

If you’re using PayPal to process tithes and donations, you’ll need to transfer money from your PayPal account into your church’s bank account.

With Donorbox, contributions are sent straight to your church’s bank account without delay. Removing this step saves your church time and effort while giving you quick access to your funds.

This can be especially valuable for churches operating on lean budgets that rely on regular contributions to keep the lights on. And, quick donation transfers can also help more established churches leverage their cash to jump on unforeseen opportunities and needs.

5. Your supporters might have a disjointed donation experience

When you use PayPal for churches, you’re limited to few customization options. For example, PayPal does not allow you to customize donation receipts (more on this in list item #7). This can be problematic if you are trying to present a modern, polished aesthetic to your supporters.

In fact, many churches choose donation pages over the PayPal donation button

And, PayPal does not allow people to designate where they want their donation to go. This is an issue if you’re trying to raise money for a specific initiative, such as a mission trip or building project.

As a result, donors may need to reach out separately to share how they’d like their donation allocated, creating an additional step in the donation process. With PayPal, it’s also cumbersome for people to make a gift in honor or memory of someone.

Donorbox allows seamless options for fund designation and tribute gifts. When donors can clearly articulate their giving preferences, they feel empowered to support your cause.

And, when donors receive confirmation about their gift details in a beautiful, custom receipt, they can rest easy.

6. Nonprofits foot the bill for donation processing fees

As mentioned above, donation processing fees are to be expected in the world of online fundraising.

However, many supporters are willing to cover donation processing fees themselves if given the option. This helps donors feel good knowing that 100% of their gift goes toward your church, ministry, or nonprofit’s work.

However, PayPal church donations do not allow donors the option to cover donation processing fees. This can make it difficult for your church or nonprofit to fully reap the benefits of online fundraising.

Donorbox allows your church-goers to help cover their gift processing fees seamlessly. At the end of the donation page, your supporters will see an optional checkbox to cover the donation processing fee.

This can help your church cover all your donation fees and put more money toward the mission. Donorbox allows supporters to cover the 1.5% Donorbox platform fee, and/or the 2.9% and 30-cent credit card fees from Stripe or PayPal (these fees can also be reduced for registered nonprofits).

Check out our step-by-step guide on how to ask your donors to cover the processing fee.

paypal processing fees

7. PayPal does not allow for customized, branded receipts

PayPal online giving will send donors an automatic receipt. But, there aren’t options to customize the receipt with your church’s information and branding.

Donorbox provides extended support, even after the gift transaction has been completed. With Donorbox, you can customize donation receipts (see image below).

Donorbox allows you to add text, images, and hyperlinks to your donation receipts. You can also change fonts, colors, and sizes.

paypal church donations

Customizing your donation receipts can help your church present a polished, organized look. This can help build trust and a sense of community among your supporters.

Check out our complete guide to donation receipts for nonprofits.

Other Areas Where PayPal Falls Short for Churches

There are instances when PayPal can be an excellent payment processing tool. But, churches can bypass higher donation processing fees, receive donations faster, and streamline the entire fundraising process with a dedicated platform like Donorbox.

Additionally, churches and nonprofits get access to a valuable set of tools and features critical to fundraising, crowdfunding, donor, and tax management.

1. Churches are unable to customize donation forms with PayPal.

A customized donation page and donation form which mirrors the rest of your church’s website and branding can help build trust, but it’s not possible with PayPal.

Donorbox allows you to create beautifully designed donation pages and customize the forms – no coding skills required!

Here’s a good example of a well-branded donation page and form powered by Donorbox.

donation page for churches

2. Churches are unable to set donation tiers with PayPal.

You can set up a Donorbox donation page with suggested gift amounts. Plus, you can list the specific items or programs that a gift of that amount can support.

Here’s an example of how the customization works on the tool. You can easily add/remove a donation tier with suggested amounts and supporting context. This particular feature gives donors more insight into how their smallest donation will help the beneficiaries. 

why donorbox is better than paypal for churches

3. Churches are unable to set employer matching with PayPal.

Unlike PayPal, Donorbox integrates with Double the Donation to support gift matching. With this feature, your donors can easily search for their company in the database and go through a simple process at their end to help you double the received donations. 

The best thing is that you can double the impact of your mission without any dedicated effort from your end. Here’s how it looks on the Donorbox-powered donation form.

church company matching donation

4. Churches are unable to manage text-to-give campaigns with PayPal.

Donorbox offers text-to-give tools that are easy, fast, and flexible. You could text your church-goers a link to tithe at the end of each service. Or, create a special holiday text-to-give campaign.

Text-to-give fundraising for your church can be especially effective during the rise of virtual church services. Text-to-give is a convenient option when passing a collections plate isn’t possible. With Donorbox, you get lots of great text-to-give features. Firstly, our short code plan offers you a shorter number that’s easier for your donors to remember and type in, and a custom keyword for one of your campaigns. Then comes our repeat donation feature – it ensures your donors can anytime repeat their donations without having to fill out any form or input details. Our basic plan is equally effective with a little less customization but the best results nonetheless.

5. Churches are unable to automate year-end tax receipts with PayPal.

With Donorbox, you can easily send year-end tax receipts to all your donors with details of the donations they’ve made during the year (sample template below).

why donorbox is better for churches

6. Churches are unable to segment donors with PayPal.

Work smarter, not harder. Donorbox captures donor information and allows you to filter your donors. Sort based on the number of donations, amount, frequency, location, and more.

Powerful data sorting allows your church’s staff to work more efficiently and prioritize outreach. You can export your data, too!

7. Churches are unable to customize donor emails with PayPal.

Donorbox allows you to customize your gift and tithe receipts with your church’s logo, colors, fonts, and messaging like shown in the image below.

Reasons Why PayPal is Not the Best Option for Churches

8. Churches Can Accept PayPal Donations with Donorbox

Do your supporters love donating through PayPal, even though you’d like to start using a system like Donorbox?

Good news! You can integrate your Donorbox account with PayPal to get the best of both worlds. That way, your congregation members can still make PayPal church donations if that’s what they prefer.

In addition to PayPal, your supporters can also give through Apple Pay, Google Pay, and ACH bank transfers if you choose Donorbox. It also easily connects with web design and payment platforms like Stripe, Wix, Squarespace, Weebly, and WordPress. This can make it a breeze to embed the Donorbox donation form/button on your church’s existing website.

With Donorbox, you can even choose to integrate with useful tools like Salesforce and MailChimp. These integrations make it easier than ever to keep your donor records up-to-date and keep donors informed about your work.

With all this information at hand, you can now set up a customized donation experience for your church on Donorbox, and start fundraising within minutes – no set-up fees, no monthly fees, and no contract!  

Avatar photo

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.

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