PayPal Nonprofit Donation Fees & Its Alternatives [Updated 2024]
The PayPal rate business transaction fees is 2.89% + $0.49, but PayPal offers a discounted fee of 1.99% + $0.49 for registered charities. PayPal is a trusted global brand and a popular choice for many donors. In this article, we’ll explain the benefits of using Donorbox to accept PayPal donations and walk you through the steps to set it up.
PayPal is a trusted global brand and a popular choice for donors. Accepting PayPal donations is an easy way to increase donations, but it isn’t a free option. Like most payment gateways, PayPal deducts a fee from donations before funds are deposited in your organization’s PayPal Account.
What are the PayPal donation fees?
We’ll take you through this, explain the benefits of using Donorbox to accept PayPal donations, and much more.
PayPal Nonprofit Fees [Updated 2024]
PayPal has recently made changes to its transaction fees for business accounts. The updated rate for PayPal fees is 2.89% + $0.49 per transaction. But for registered charities, PayPal offers a discounted fee of 1.99% + $0.49. Learn in detail here. Check the PayPal processing fees for specific donation amounts in this handy CheckYa PayPal Fee Calculator.
Please note that the fixed part in the above transaction fee is based on the currency received. Also, there’s an additional percentage-based fee of 1.50% for international donations.
Nonprofits need to confirm their charity status to receive PayPal’s nonprofit fees. Learn more about registering your account on PayPal and confirming your charity status here.
Donorbox partners with PayPal to help nonprofits get rid of the processing fees (as well as Donorbox’s platform fee) on donations. With Donorbox, you can enable donors to opt to cover the processing fees. Donors love to help their favorite nonprofits by choosing to cover these fees. Research further says that 53.4% of donations are covered by donors when organizations enable this option on their donation form as default.
Donorbox also offers one of the lowest platform fees in the market while giving tons of customization options to nonprofits, that aren’t available on PayPal. Through this partnership, you can accept donations via PayPal as well as Venmo, and use all of Donorbox’s other features for your nonprofit!
Before that, let us have a look at the benefits of using PayPal for accepting online donations.
Benefits of Using PayPal for Donations
A few benefits of using PayPal for donations include:
Organizations can easily accept online donations — including in-person donations using PayPal Zettle.
Donors can stay logged in to quickly complete their donations.
Donors can give by credit or debit card, even if they don’t have a PayPal account.
The PayPal Giving Fund helps charities reach new donors on PayPal, eBay, and other technology platforms. You need to enroll to be eligible.
For UK-based organizations, Gift Aid can be secured on eligible donations. This can boost donations by up to 25%.
Donorbox Versus PayPal
PayPal allows your organization to accept online donations but it isn’t optimized for nonprofits. Donor management isn’t possible if you’re only using PayPal and recurring donations are limited to the monthly interval. A customizable donation form and donation page is the basic need for every nonprofit but with PayPal, it is not attainable. Check out what difference it makes to choose an all-in-one online fundraising platform that’s simple and quick, and gives you tons of customization options over PayPal which doesn’t in our blog here.
On top of everything, PayPal charges 1.99% + $0.45 as their processing fee for eligible nonprofits. Their processing fee for other nonprofits remains at 2.89% + $0.45. Donorbox, on the other hand, takes only 1.75% with its Standard plan (no setup fee, no monthly fees, no contract).
The below pricing table will make it easy to understand –
With Donorbox, you can also ask your donors to cover the processing fees.
Here’s what Donorbox’s partnership with PayPal offers your organization:
1. Recurring donations are flexible
Donorbox allows donors to easily set up flexible recurring PayPal donations — these can be weekly, monthly, quarterly, or yearly.
PayPal allows donors to set up only monthly donations. For donors who want to give less often than this, the lack of flexible options can mean they only make a one-time donation.
For churches, weekly tithes can be set up as recurring donations. Your congregation can choose to repeat their donations on a specific day of the month. This makes it easier for people to give their tithes and can increase donations to your church. We’ve written a blog to give you a thorough insight into why PayPal is not the best option for churches and its alternative. Read it here.
The donation form in the below image is a recurring one with monthly and quarterly intervals enabled in addition to one-time donations as per the nonprofit’s research and strategy. You may want to add weekly and annually, too, if that suits your nonprofit needs. This flexibility is what makes the difference.
Yearly memorial funds are another option for recurring giving. Your donors can make regular tribute donations in memory of a loved one. This can be enabled on your Donorbox donation form.
2. Donors can cover processing fees
While the number varies with the platform, the latest stats across websites indicate that more than half of your donors will cover the processing fees when given the option. Because that means they can help you do more good by giving a little extra than they were going to. Not a lot of difference. But for you, it indeed makes a big difference. This can help your organization save hundreds or even thousands of dollars in processing fees each month.
With Donorbox, donations are sent straight to your organization’s bank account. If you’re only using PayPal, your organization needs to transfer donations from your PayPal account to your bank account. Removing this step saves time and effort, and gives you quick access to your funds.
4. Customized receipts
Your organization can send a customized thank-you receipt to your supporters after they’ve donated. The template, as shown in the image below, can be easily customized by your staff and updated at any point in the future to include more details. It is automated and is sent after every donation you receive. Sending customized receipts helps build stronger relationships with donors. It also helps your organization to be tax-compliant. But this isn’t possible if you only use PayPal.
5. A quick checkout process
Donorbox connects with PayPal Checkout to let you give your donors a quick checkout experience.
It also integrates with PayPal One-Touch, which allows donors to stay logged into PayPal and move quickly through the checkout process. Here’s how –
Your donors can fill out the necessary information, select PayPal for payment, and click the ‘Donate’ button.
If they’re already logged into PayPal, the payment can be made with just one click, as shown below.
PayPal Checkout also allows your donors to use other quick payment options like Venmo. Donors can simply choose the option as shown in the image below to make a quick donation to your nonprofit using their Venmo digital wallet. Even donors using the desktop to make a donation can use this option to make a donation. They’ll be shown a QR code that they can scan on their Venmo app to complete the payment.
6. Access to the Donorbox platform (+ its powerful fundraising & donor management features)
With Donorbox, you don’t just get a simple and fast checkout process but also a plethora of fundraising and donor management features and multiple payment methods (other than PayPal). Getting started requires 4 simple steps – signing up for free, creating a donation form, connecting with your payment processor, and going live!
Company donation matching to double/triple your donors’ donations.
Crowdfunding campaigns with the power of shareability to reach more people online.
Text-to-give to let your donors quickly give through a text. Custom keyword and shortcode number.
Peer-to-peer fundraising to boost campaign outreach, turn supporters into advocates, acquire new donors, and raise more funds.
Online event ticketing forms to sell tickets online through unlimited ticket levels.
Creating monthly/yearly membership campaigns, and managing members and membership payments data at the backend.
Seamless integrations with MailChimp, API/Zapier, and Salesforce.
Readily available integration with web platforms, including Weebly, WordPress, Squarespace, and Wix.
Credit/debit card payments, UK Direct Debit, Canadian PADS, low-fee ACH, Apple Pay, and Google Pay donations via Stripe.
Donorbox UltraSwift™ Pay – makes giving a breeze with the power of digital wallets like Venmo, PayPal, Apple Pay, and Google Pay.
Donorbox Premium – lets you unleash your donation potential with the help of expert fundraising coaching, high-performance tools, and priority tech support.
These features aren’t available if you’re only using PayPal.
Accepting PayPal Donations With Donorbox [3 Simple Steps]
It’s easy to accept PayPal donations on Donorbox — we’ll walk you through it here.
Step 1: Go to your Donorbox account
Once you’ve logged into your Donorbox account, head into your “Account”, and click Payment Methods.
Step 2: Add PayPal under Payment Methods
Add your organization’s PayPal account email and click “Connect”.
Step 3: Log in to PayPal and connect
You’ll be taken to PayPal where you’ll enter your account email again, country/region, and login credentials. All that’s left is to click “Agree and Connect” to authorize PayPal to connect with Donorbox.
That’s it! You can now accept PayPal donations.
Note: Donorbox automatically upgrades all their new PayPal users to PayPal Checkout unless they’ve failed to complete the signup process or their country doesn’t support it.
Frequently Asked Questions (FAQs)
1) Does PayPal waive fees for nonprofits?
Yes, they do offer discounted rates for nonprofits. It is 1.99% + $0.45 per transaction with no monthly fees.
2) How do I avoid PayPal fees?
To avoid PayPal fees, you can sign up on Donorbox which has affordable pricing of 1.75% platform fee (which can be even lower if you opt for one of our Pro or Premium plans) and gives your donors an option to cover the processing fees. Know more about Donorbox’s plans and pricing here.
3) Can I let donors cover my processing fees if I use PayPal?
No. You can’t cover processing fees if you use PayPal for the donation system. But if you use Donorbox, you can always ask your donors to cover your processing fees.
4) Do I get year-end tax receipts with PayPal?
You don’t get year-end tax receipts with PayPal. With Donorbox, you can get one-off & recurring donation receipts as well as year-end receipts.
5) Can I integrate recurring donations with PayPal?
Donations on PayPal are one-time and monthly. With Donorbox, nonprofits can accept one-time, weekly, monthly, quarterly, and annual recurring donations.
Over to You
If your organization is eligible for the lower PayPal nonprofit fees, a fee of 1.99% + $0.45 per transaction will apply to donations. If you’re not eligible for this, the standard processing fee of 2.89% + $0.45 per transaction applies.
With Donorbox, you can ask your donors to cover PayPal processing fees and maximize donations. We have helped 50,000+ nonprofits across the globe make a greater impact through online fundraising and efficient donor management. Our features are easy to activate and simple to use, so you can focus on your mission and keep the good work going.
Take a look at our nonprofit blog for more tips on maximizing donations and creating better relationships with donors.