PayPal Nonprofit Donation Fees in 2021 & Its Alternatives | Donorbox

PayPal Nonprofit Donation Fees in 2021 & Its Alternatives | Donorbox

Paypal nonprofit donation fees

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.


PayPal Nonprofit Fees for 2021

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.

PayPal for nonprofits


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.
  • Express Checkout allows donors to 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 can help your organization 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.

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:


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 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.

Also read: Why Paypal is not the best option for churches (& its Alternative).

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

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.


3. Funds Can Be Received Quickly

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

emaildonorreceipt

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.


5. A Quick Checkout Process

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.


6. Access to the Donorbox Platform

hosted donation page demo 43101363ae7dd0af40ffa300bb996199e6d6ec5be26689f0c34438ee194759e4

You can also access Donorbox features, including:

  • Customizing your donation page and using donation tiers to boost donation amounts.
  • Integrating with MailChimp, API/Zapier, and Salesforce.
  • Readily available integration with web platforms, including Weebly, WordPress, Squarespace, and Wix.
  • Accepting Stripe, ACH, and SEPA, Apple Pay, and Google Pay donations.
  • Company donation matching — companies can match donations made by their employees.
  • Sending year-end tax receipts to donors.
  • Access to Donorbox’s Text-to-Give & Crowdfunding feature.

These features aren’t available if you’re only using PayPal.

Get Started With Donorbox


Accepting PayPal Donations With Donorbox

It’s easy to accept PayPal donations through 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 settings, and click on Payment Methods.


Step 2: Add PayPal in Your Payment Settings

Add your organization’s PayPal account email and click Connect.

paypalaccountsettings


Step 3: Log In to PayPal and 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.


FAQs


1) Does Paypal waive fees for nonprofits?

Yes, they do offer discounted rates for nonprofits. It is 2.2% + $0.30 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 a very affordable pricing of 1.5% (Platform fee). Know more about Donorbox’s pricing here


3) Can I cover my processing fees if I use Paypal?

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.


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 limited to one-time and monthly. But 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 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.

Raviraj heads the sales and marketing team at Donorbox. His growth-hacking abilities have helped Donorbox boost fundraising efforts for thousands of nonprofit organizations.

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