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All You Need to Know Before Using Paypal for Your Nonprofit


Paypal is a well-known e-commerce company. Consumers frequently use it as an intermediary between the bank cards they use to make purchases online and the websites on which they make those purchases. In recent years, the company has introduced some unique features not only geared toward raising money for nonprofits, but helping them conduct transactions, build their websites, and manage their books as well. Paypal’s point of sale solution has emerged, and it offers some unique features only a brand as commonly known and extensively used as Paypal could offer.

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What Exactly Is Paypal?

PayPal is a nonprofit point of sale solution that allows for the secure processing of transactions across a variety of platforms, both online and in-person. It serves as an external account in which funds can reside, and it can be linked to your charity’s Visa or bank account. It allows people to pay with PayPal in many places that, in the past, you would only be able to use cards or cash. 

This provides a few perks: first, it creates an additional layer of protection for their sensitive information. Next, it makes banking much easier. You can accept money from anyone, with just the touch of a button, and you can use that same account to send funds. 

paypal-nonprofits-what-isDavid is ready to dive into PayPal for nonprofits!

Anytime a purchase takes place, it is important that all sensitive data associated with it is safe. For any transaction to be approved, the card information must be sent to the issuing bank to verify the account. This is what the terminals are doing before you remove your card from the terminal at checkout. And that is the main task of PayPal: to ensure that data is safe as it moves to and from servers.

PayPal uses secure sockets layers (SSL) to encrypt all of the information it sends or receives. It is a standard method of keeping consumers' info safe. It scrambles data into random characters, preventing it from being read as it travels through the airwaves. PayPal nonprofit also checks in with the browsers that users are on, ensuring that they are encrypted with SSL 3.0 or more before approving any purchases.


PayPal Solutions for Nonprofits

While Paypal’s baseline features are impressive to anyone in need of a point of sale solution, what it offers to nonprofits should be especially appealing. Listed below are some of the features created exclusively to benefit charity organizations.

Donate Button

PayPal nonprofit offers a sleek donation button to build into your website that takes supporters right to your donation page. When donations are easy - and not to mention unobtrusively prompted - you get more. If someone donates ten dollars to your cause, for example, they may not hesitate to tick the box that says "make this a monthly donation", triggering an automatic, valuable source of revenue.

Stripe does this differently, allowing you to add donations to your page as products to be purchased. Their buttons are useful, but not quite as sleek or easy to use as PayPal’s, which accepts a few other forms of payment, such as Venmo. 

PayPal Checkout 

This is a tool specially created for online sellers. Integrations with your website are simple, and users will not have to be redirected to the PayPal site to enter their information. It will sync up with their browser, which likely has their data saved, and they are able to send payment with a touch. 

PayPal Payments Pro

With PayPal Pro, you get the same embedded checkout process as with the previous example. However, with PayPal Pro, you can customize the entire experience. It can be configured in whatever way your business needs it to be, and it helps you build a full e-commerce site. 

As a nonprofit payment solution, Paypal is an amazing tool for any nonprofit who is just beginning their online journey. It has an optimized mobile checkout experience, preventing lag or crashes, and the package includes a virtual terminal for you to accept card payments from your phone. 

Invoicing Tools 

PayPal nonprofit invoicing is user-friendly. It does a lot of the heavier accounting work for you, creating the possibility for your employees to collect donations and send invoices from their terminals. It also has built-in software that allows you to store and manage invoices, receipts, or sales. 

Having this invoicing process be automated saves you the time it would have taken to go through them all and ensure the data is correct. That means less mistakes, and more progress on your projects.

This tool was designed to make payments even faster. There are a plethora of ways to transfer funds to suit the needs of any user. When you go to the Profile section in your account settings, you can find your unique link to share with anyone from whom you desire payment. 

You can provide the link online, and more donors can click it to immediately be directed to a page on which they can send funds. They do not need to remember names, numbers, or special tags; they can just click the link. Best of all, it is free with PayPal’s regular services. 

PayPal Giving Fund

Charities who enroll with the Giving Fund will be listed on a variety of online platforms that are partnered with PayPal. At the checkout of any purchase a buyer is going to make with their PayPal account, they will be asked if they would like to round up their total, or make some donation to your charity. There will be a few others on the list, but it is still ups the ante, so to speak.

paypal-nonprofits-solutionsSadie is impressed with all these solutions!

Donations are granted directly to your charity’s Paypal account. As another bonus, PayPal nonprofit matches user donations to certain organizations, and they can do so for up to $2,500 a year. Speak to a representative to find out if your organization is qualified! 


Paypal Payment Processing Fees

PayPal for nonprofit does offer discounted processing fees for your organization. The rate is 2.2% + $.30 per domestic transaction for all eligible 501(c)(3) organizations. In comparison, organizations that are not charities pay 2.9% + $.30 per transaction. Transaction fees are higher for keyed-in transactions, which is when someone types a bank card number into a terminal instead of swiping, tapping, or chip-reading that card. 

Pro Tip: Paypal does not charge any additional fees for setup, withdrawals, or cancellations. 

In contrast to Paypal, here is what some alternative point of sale solutions have to offer. 

Processor Name


Square for Nonprofits

2.6% + $.10

iATS Payments

Between 2.4% and 3.2%


2.2% + .$30

Of the three, Square for nonprofits caters the least to them in terms of their rates. They do not offer discounted transaction fees to charities, and their rate is subject to change based on the form of payment, or transaction processing. iATS Payments are, on the contrary, a little more transparent. Their rates usually fall somewhere between 2.4% and 3.2%, and are geared toward nonprofits (along with all of their features). Stripe nonprofit fees are discounted for charities who apply. 


Setting Up Your Nonprofit’s PayPal Account

The setup process for a PayPal nonprofit account is very easy. 

  • Navigate to PayPal’s website, and sign up for a business account. 

  • Select "nonprofit organization" as the type of business, and select "nonprofit" again as the category. 

  • Next, you’ll be prompted to enter all of the important information associated with your organization, including your banking information. Once everything is verified, your accounts will be linked, allowing you to accept funds from anywhere. 


Verdict: Is Using PayPal for Your Nonprofit a Good Idea?

While PayPal has a lot of great features, there are some things it lacks as a fundraising platform. They are not necessarily an all-in-one tool for nonprofits. They do not have any tools to help with fundraising, text-to-donate campaigns, or managing customer relations. When it comes to nonprofits, it is important to consider solutions that offer more of what you need. 

Pro Tip: Springly (that’s us!) is a true all-in-one solution where you have a payment solution automated into all of the tools your nonprofit needs: membership campaigns, donations, communication tools, and a full accounting suite, in which a CRM is bundled. With our partner, Ayden payment, we also accept currency forms Paypal does not, like Venmo.


Final Thoughts

For many nonprofits, PayPal is the payment processor. They have very useful tools for charities with solid data encryption, and easy navigation. They provide physical terminals for storefront use, and discounts for most charities. Paypal proves to be solid competition for Google Pay for charities or Adyen for nonprofits, and it definitely has an advantage in the e-commerce world. However, for other nonprofit organizations, it simply will not cut it. Not when there are so many alternatives to PayPal for nonprofits. Many of them are all-in-one payment solutions that are specifically designed to help nonprofits succeed. If you want to know more about what an all-in-one option can do for you, chat with us over at Springly!

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💡What are the different nonprofit solutions offered by PayPal?

A donate button, discounted transaction rates, and the Giving Fund. Find out more. 

🔑 How much is PayPal for nonprofits?

2.2% + $.30 per domestic transaction. Find out more. 

📝 Is PayPal actually adapted to good solution for a nonprofit?

Yes! But there are a few better solutions. (Springly!) Find out more.  

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