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URL: https://www.glueup.com/blog/paypal-for-nonprofits?utm_source=edm&utm_medium=APAC&utm_campaign=April2022newsletter
Submission: On April 19 via api from SG — Scanned from DE

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A GUIDE TO PAYPAL FOR NONPROFITS: ACCOUNT SET UP, ADVANTAGES, DISADVANTAGES &
ALTERNATIVES



Ayesa Lubag,

Marketing Content Specialist

•

Mar 17, 2022

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Nonprofit organizations play a vital role in building and strengthening
communities by offering services that contribute to their growth.

Donors for your nonprofit have a way to give donations–whether online or on
mobile through PayPal. Plus, you can connect with different communities and
reach more donors with the digital payment system.

So, if you’re part of a nonprofit organization that’s looking to start
fundraising on a safer and more secure platform, this article can help you learn
more about PayPal for nonprofits.


QUICK READS

 * What Is a PayPal Nonprofit Account?
 * Why Use PayPal For Nonprofits?
 * Benefits of Using PayPal for Donations
 * Disadvantages of Using PayPal For Nonprofits
 * Ways to Use Your PayPal Nonprofit Account to Increase Donations
 * PayPal Nonprofit Fees for 2021
 * Paypal Nonprofit Account: Frequently Asked Questions
 * What Are the Alternatives to PayPal for Nonprofits?


WHAT IS A PAYPAL NONPROFIT ACCOUNT?

A PayPal nonprofit account lets nonprofit organizations accept donations from
supporters easily. Most users choose PayPal Payments Standard or PayPal Checkout
as their payment solution.

Donors can access and finish their transactions on the PayPal website with the
two options mentioned above. Remember that a PayPal Business account is required
to become eligible to accept nonprofit donations.

We recommend that you confirm your nonprofit status first to get a lower
transaction rate.


WHY USE PAYPAL FOR NONPROFITS?

PayPal offers nonprofit organizations various services to raise money for their
cause. It is a widely recognized brand known to be safe and reliable for
donations.

The digital payment system is a PCI-compliant payment processor that ensures
security–evident each time it automatically monitors donations 24/7 and checks
fraud screenings.

As a reliable payment solution, it reassures users that it will keep and protect
their credit card or bank information from getting stolen online.


BENEFITS OF USING PAYPAL FOR DONATIONS

As a trusted global brand, PayPal has become a popular choice for donors. Here
are the reasons why:


1. A TRUSTED BRAND IN THE INDUSTRY

PayPal is an electronic commerce company that offers fast, safe, convenient
payment solutions globally. It supports more than 600,000 nonprofits with
fundraising and contributes to charitable efforts across the globe.



One example is the GivingTuesday campaign, which the digital platform has
supported since 2012.

In a study of 1,029 consumers in the US who made donations to a nonprofit, at
least 55% of respondents said that they are willing to donate again if PayPal is
an option. In line with this, 77% of respondents believe that it offers secure
payment methods.

Customers with PayPal accounts can transfer online donations without entering
their bank account or credit card information. Adding Express Checkout allows
logged-in customers to view all orders, dispatch details, and check out faster.


2. ONE-CLICK EASY TRANSACTION

Part of PayPal’s fraud and purchase protection is its One Touch feature that
lets you quickly check out with the same device and browser. No need to enter
your email or password. All you have to do next is review your details and pay
at millions of PayPal merchants.


3. A GLOBAL PRODUCT

With global access to more than 200 world markets, donors can customize
currency. Most donors give to organizations outside of their country, which can
support your nonprofit organization’s expansion strategy.


4. PLENTY OF SOFTWARE INTEGRATIONS

PayPal for nonprofits has partnered with other leading online fundraising
platforms for system integration. Different integrations streamline the
transaction processing and help nonprofits manage their donations efficiently.

If your organization has a CRM platform or fundraising software, you can easily
add PayPal as a donation option. This allows you to effectively reach new donors
and add ease of giving for your current donors.

Additionally, you can easily collect donor information from a CRM platform
through PayPal without requiring manual entry.


5. MOBILE-FIRST PLATFORM FOR DONATIONS

As a mobile-first payment platform, you can quickly increase donations using
PayPal for nonprofits, especially online and via mobile.

PayPal is one of the most preferred payment methods in the US. In fact, it’s the
leading mobile app publisher that has reached approximately half of the
country’s mobile users.

It only takes a few steps to add PayPal’s donation button to your website. An
optimized site and mobile experience can have a significant impact on giving.

It means fewer users will drop off in the middle of checkout due to a clunky
online form, missing button, or an annoying amount of scrolling and clicking.

Supporters giving in-person donations can also enjoy a convenient mobile
experience via PayPal Zettle. You have to purchase a card reader and download
the app to get started.


DISADVANTAGES OF USING PAYPAL FOR NONPROFITS

No platform is perfect, and PayPal comes with a few drawbacks that you should be
aware of before registration.


1. LIMITED FUNDRAISING FEATURES

As a nonprofit organizer, there are other ways to encourage the audience to
participate besides adding the donate button on a website.

PayPal lets you accept online donations, but everything is transactional on a
basic level. It lacks the fundraising experience to attract supporters and
encourage them to come back.



The digital payment platform doesn’t let you build a fundraising page,
contribute to a supporter feed, or set up events. If you’re looking to be
creative in a fundraising campaign, there’s a way for you to add the brand’s
logo to the donation form, but that’s it.


2. VERIFIED NON-PROFIT STATUS IS REQUIRED

Verified non-profit status is a must if you want to lower donation rates.
However, you cannot do this unless PayPal has confirmed you tax-exempt status at
all levels of government.

So if you raise money before the confirmation, you cannot expect refunds on the
higher fee amounts even after the approval. Therefore, it would be best to wait
for confirmation before raising any amount.


3. ELECTRONIC DONATION IS NOT FOR EVERYONE

It is easy to donate with PayPal, but some may not be comfortable with
electronic payments.

Others may want the average amount of donations at work within your programs,
which may be hard to monitor when making this type of donation through the
platform.

To address this issue, create an email subscription form when sending updates.
However, remember that it cannot replace the pleasure of making a direct
in-person donation.


4. LIMITED PAYMENT METHODS



A PayPal nonprofit limits itself to accepting traditional credit card payments,
along with Venmo, or donations via the same payment system.

Credit cards and debit cards have become some of the primary ways consumers pay
for their purchases today. It limits the consumers' payment options since some
have rapidly been using mobile wallets like Google Pay and Apple Pay, which
store payment card information.


5. TRANSACTIONS REQUIRE PAYPAL FEES TO BE PAID

You can expect a 2.2% transaction fee for donations, but a $0.30 per transaction
fee should also be paid. This allows you to see the complete donation details
every time someone donates through PayPal.

On the other hand, you can lose $2.50 out of every $100 amount donated to a
cause. There are special rates available for donations that exceed $100,000.

How to Set Up a Nonprofit Account on PayPal

Creating an account to use PayPal for nonprofit organizations is easy. Make sure
you have your personal information ready and follow the steps below.

 1. 1. Create a PayPal business account for your nonprofit organization.
 2. 2. In the business account drop-down menu, select “nonprofit organization.”
 3. 3. Click Create.
 4. 4. Enter information related to your account, such as business details and
    email address.
 5. 5. Select the category under which your nonprofit operates, whether
    educational or registered charity.
 6. 6. Provide backup documentation to support the nonprofit status. You may be
    required to enter your federal tax ID or the owner’s Social Security number
    if you set up a business account.
 7. 7. Enter bank information to enable ‘donate by bank transfer’ and receive
    money from your bank account.


WAYS TO USE YOUR PAYPAL NONPROFIT ACCOUNT TO INCREASE DONATIONS


ACCEPT AND PROCESS ONLINE DONATIONS VIA PAYPAL

Add a PayPal Donate button to your website to securely accept donations or
contributions. It comes with a low transaction fee every time a donor
contributes to your nonprofit.



It lets you pick the donation button style, choose the preferred currency for
donations, and set recurring monthly donations for donors.



PayPal.Me is a peer-to-peer payment platform you can choose for soliciting
donations online. With it, you can send personalized donation links to donors
and ask for individual gifts from your loyal supporters.


ACCEPT DONATIONS IN PERSON VIA PAYPAL

PayPal mobile POS system enables nonprofits to accept donations in person. With
it, you pay $29 for the first PIN card reader and $79 for subsequent ones.
Getting in-person donations becomes easy, along with a chip and contactless
processing.

If you process transactions via Zettle, they are subject to a 2.29% + $0.09 fee.
Keep in mind that as a nonprofit, there’s no way for you to pay a discounted
processing fee when using Zettle. Transactions are subject to a higher 3.49% +
$0.09 fee.

You can also send free invoices with the PayPal Zettle app. At least 3.49% +
$0.49 rate should be paid for standard PayPal non-donation online transactions.


USE PAYPAL’S MOBILE POS WHEN SELLING



Zettle is PayPal’s all-in-one POS solution to monitor donations and offer
flexible payment options to donors. But if you prefer a different POS system,
PayPal lets you integrate it with the platform.

There’s a 2.29% + $0.09 PayPal rate for in-person transactions for any POS
partner. You also have to pay additional software fees for the POS system.


PAYPAL FOR TRACKING DONATIONS & EFFICIENT BOOKKEEPING

PayPal has a suite of reporting tools to offer detailed information about
account activity and streamline nonprofit bookkeeping. The payment system has
QuickBooks integration via the Connect to PayPal data integration app that you
can access from a QuickBooks account.


PAYPAL NONPROFIT FEES FOR 2021



PayPal’s standard rates are 2.9%for its processing and $.0.30 for every
donation. You can apply to become an eligible 501c3 nonprofit organization that
can receive the discounted fee of 2.2% and $0.30 per donation.

Interested nonprofit organizations should send their applications to receive a
special reduced transaction rate. Eligible charities will be automatically
enrolled in PayPal Giving Fund.


WHAT ARE THE ALTERNATIVES TO PAYPAL FOR NONPROFITS?

Meet the needs of millions of donors with other payment platform alternatives
that provide trusted payment methods and a sense of ease through the donation
process.


DONORBOX



Donorbox is a fundraising software that allows individuals and 501c3 nonprofit
organizations to set up and receive donations online. It comes with an optimized
donation payment system available in 9 languages and 28 currencies. Moreover, it
supports donations via bank transfers, Apple, Google Pay, and more.

DONORBOX VS. PAYPAL

Donorbox specializes in donations as it caters to nonprofit-specific needs.
However, it doesn’t support some transaction and e-commerce features supported
by PayPal but can process donations in the latter.


STRIPE



Stripe is a unified platform that comes with a suite of payments products. It
helps organizations collect credit cards online with ease without requiring any
merchant account or gateway. With this online payment platform, companies can
send invoices, distribute physical cards, avoid fraud, and many more.

STRIPE VS. PAYPAL

Stripe is more suited for creating a customizable checkout flow. You can
integrate a shopping cart to fit your organization’s branding. However, it will
require developer knowledge to customize its features. On the other hand, PayPal
doesn’t offer the same customization options, but you can easily set it up.


SQUARE



Square helps nonprofits easily process donations whether in person or online.
Accepting credit cards is now fast and safe with no long-term contracts or extra
fees. What’s more, it comes with a free Square POS app that works seamlessly
with other software options.

SQUARE VS. PAYPAL

If you will be doing in-person and mobile transactions, Square is a better
option. On the contrary, PayPal is more suitable for e-commerce and online
payments. And when it comes to the companies’ POS systems, Square comes with
plenty of business tools, including employee management, while PayPal is only
limited to payment.


PAYPAL NONPROFIT ACCOUNT: FREQUENTLY ASKED QUESTIONS

Here are the answers to some questions you may have about using PayPal for your
nonprofit organization.

How can I set up PayPal for my nonprofit to accept donations?

Sign up for a PayPal Business account and then select “nonprofit Organization”
as the business type and “nonprofit” as the category. Enter your organization’s
bank account information to link to your PayPal account. After creating a PayPal
account, you can now add a Donate button to your organization’s website and
start accepting donations.

Is fundraising on eBay available with a PayPal account?

Yes. PayPal users can purchase an online gift for your nonprofit organization
from eBay GivingWorks.

Can my nonprofit organization access PayPal transaction report?

Yes, PayPal offers online reports in a variety of formats so that your
organization can analyze its revenues, automate the bookkeeping process, and
accurately monitor transactions. A real-time transaction log on a PayPal account
for nonprofit is accessible, which displays transaction date, payer name, email
address, transaction amount, and more.

Is there a way to collect PayPal payments on social media?

Yes. Copy the “Donate button URL text” and paste it on any social media site.
Clicking the URL will direct users to a safe PayPal page intended for payment
processing.

Which PayPal product do I choose for my nonprofit organization?

As a start-up nonprofit organization, you can use PayPal Payments Standard or
Express Checkout for online transactions. Donors can complete their transactions
on the PayPal website through them. But if you want transactions to occur on
your own website, you can choose PayPal Payments Pro instead.


GAIN NEW NONPROFIT MEMBERS AND KEEP THEM CONNECTED

Would you like to create a digital place to connect and engage members of your
nonprofit organization? Be sure to book a demo of Glue Up’s Membership
Management software.



With custom online application forms and several membership types, you can
easily encourage prospective nonprofit members or donors to sign up. What’s
more, it allows you to communicate with members everywhere with its mobile
app–helping you manage operations and automate processes while keeping everyone
connected.

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