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.
Along with 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 talk you through this and explain the benefits of using Donorbox to accept PayPal donations and reduce fees.
The standard rate for PayPal processing fees is 2.9% and $0.30 per donation.
Eligible nonprofit organizations can apply to receive the discounted nonprofit fee of 2.2% and $0.30 per donation.
PayPal says this about their donation fees for charities:
“PayPal offers discounted transaction rates for 501(c)(3) charities for most products, and consistently low rates for all other nonprofits. No extra fees for setup, statements, withdrawals or cancellation.
2.2% + $0.30 per transaction and no monthly fee for charities.”
Organizations need to apply to receive PayPal’s nonprofit fees. Otherwise, the standard PayPal donation fee applies.
A few benefits of using PayPal for donations include:
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.
On top of that, PayPal charges 2.2% + 30¢ as their processing fee for 501(c)(3) nonprofits. Their processing fee for other nonprofits remains at 2.9% + 30¢. Donorbox, on the other hand, takes only 1.5% (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.
There are many reasons why nonprofits choose donation pages over PayPal donate buttons. The primary reason is the lack of customizations available for PayPal donate buttons. Hence, to offer you the best of both, we’ve partnered with PayPal to allow organizations to accept PayPal donations and take advantage of our donor management features.
We have put together an in-depth comparison video on how Donorbox is a better solution for your fundraising needs than PayPal:
Here’s what Donorbox’s partnership with PayPal offers your organization:
Donorbox allows donors to easily set up flexible recurring PayPal donations — these can be weekly, monthly, quarterly, or yearly.
PayPal allows donors only to set up 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.
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.
According to a recent study, in 2020, 53.4% of total donations were covered by donors where nonprofits enabled ‘cover processing fees’ as a default option.
With Donorbox, you can ask donors if they’re happy to cover credit card processing fees to maximize their donations.
They can choose to cover the 2.2% + $0.30 processing fee for PayPal donations, and the 1.5% Donorbox platform fee, as shown in the image below.
This can help your organization save hundreds or even thousands of dollars in processing fees each month.
Bonus Resource: Learn more about nonprofit donation processing in this guide.
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.
Your organization can send a customized thank you receipt to your supporters after they’ve donated. This isn’t possible if you only use PayPal.
Sending customized receipts helps build stronger relationships with donors. It also helps your organization to be tax-compliant.
Donorbox connects with PayPal Express to give 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.
You can also access Donorbox features, including:
These features aren’t available if you’re only using PayPal.
It’s easy to accept PayPal donations through Donorbox — we’ll walk you through it here.
Once you’ve logged into your Donorbox account, head into your account settings, and click on Payment Methods.
Add your organization’s PayPal account email and click Connect.
You’ll then 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.
Yes, they do offer discounted rates for nonprofits. It is 2.2% + $0.30 per transaction with no monthly fees
To avoid Paypal fees, you can sign up on Donorbox which has a very affordable pricing of 1.5% (Platform fee). Know more about Donorbox’s pricing here
No. You cant 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 fee.
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.
Donations on Paypal are limited to one-time and monthly. But with Donorbox, nonprofits can accept one-time, weekly, monthly, quarterly, and annual recurring donations.
If your organization is eligible for the lower PayPal nonprofit fees, a fee of 2.2% and $0.30 per transaction is deducted from donations.
If you’re not eligible for this, the standard processing fee of 2.9% and $0.30 per transaction applies.
With Donorbox, you can ask your donors to cover PayPal processing fees and maximize donations.
Take a look at our nonprofit blog for more tips on maximizing donations and raising more funds for your organization.