What Does PayPal Offer to Nonprofits?

One of the finest methods to raise money for NGOs while maintaining security is through PayPal. The robust payment processor PayPal makes it easy for your donors to feel secure making donations on your website thanks to its outstanding features.

Paypal allows charities to accept donations online and in person. It manages their expenses and provides access to the funds on the go. PayPal also offers discounted transaction rates for confirmed 501 (c) (3) charities and connects them with more donors through PayPal Giving Fund, an IRS-registered public charity that receives and grants donations through PayPal and other partner platforms.

In this blog, we’ll get into the nuances of Paypal for non-profits. If you are an NGO, Paypal might be your best bet. Skeptical? Let’s get into the details: 

What Is the PayPal Nonprofit Program?

Nonprofit organizations can collect donations from supporters by setting up a PayPal nonprofit program account. The two most popular payment options for users are PayPal Payments Standard and PayPal Checkout. Donors can use the two aforementioned methods to access and complete their purchases on the PayPal website.

How Does PayPal Benefit Nonprofits?

  1. Low Transaction Fees

PayPal levies a fee for collecting credit and debit cards for payments, but it provides a discounted rate for verified charities and organizations that are recognized as 501(c)(3) organizations. The discounted fee is 1.99% + $0.49 or 2.2% + $0.30 per transaction, based on the nonprofit1234’s eligibility and monthly volume, as opposed to the usual charge of 2.89% + $0.49 per transaction. 

  1. Greater Global Reach

Expanding the audience and potential contributor base beyond local borders is a benefit of PayPal nonprofits having a larger worldwide reach. It enables NGOs to communicate with supporters all over the world, boosting their capacity for fundraising and growing public awareness of their cause, encouraging international cooperation, and having a bigger global influence.

  1. Improved Brand Image

PayPal is an excellent option for NGOs looking for a payment processor because it integrates with a variety of venues for fundraising. Donor support and contributions to nonprofit organizations are more likely as a result of their increased credibility and trust. Since partnerships and collaborations are attracted by a brand’s excellent reputation, there is more potential for growth and influence.

What Are the Drawbacks to PayPal for Nonprofits?

Though there are significant benefits associated with Paypal for Non-profits. There are certain drawbacks that you must be aware of before signing up with Paypal:

  1. Limited Payment Options 

As a nonprofit organizer, you have more options besides just placing a donate button on a website to encourage the audience to take part. You can receive donations online using PayPal, but everything is purely transactional. It doesn’t have the fundraising expertise to draw in supporters and entice them to stick around.

  1. Rigid Terms and Conditions

Rigid terms and conditions may impose severe rules that restrict the organization’s flexibility in receiving or using specific donations, which can be a disadvantage for PayPal organizations. These intricate standards may be challenging for nonprofits to understand and follow, which could impair their operations.

  1. Payment method challenges  

Customers having the option to select different payment methods such as credit cards and debit cards can hurt PayPal nonprofits because it increases the possibility that donors will select payment options with more expensive fees or complicated processing requirements, which could hurt the organization’s financial performance and administrative burden.

  1. High Fees for International Donations

A transaction cost of $0.30 should also be paid in addition to the 2.2% transaction fee you might anticipate for donations. But for every $100 donated to a cause, you stand to lose $2.50. Donations that are more than $100,000 are eligible for special rates. The amount of money available for the nonprofit’s mission may be diminished as a result of these fees eating into donations received. 

How Does PayPal Compare to Other Nonprofit Payment Solutions?

With the support of PayPal, nonprofit organizations may accept donations, control spending, and receive payments more quickly online. It makes it possible for charities to accept donations in more than 200 different currencies from donors worldwide. Compared to competing charitable payment systems, PayPal offers discounted transaction rates for accredited 501(c)(3) nonprofits for the majority of products with no monthly fees. They also provide all other nonprofit organizations with customary cheap rates, along with no additional setup, statement, withdrawal, or cancellation costs. This is how PayPal differs from its rivals.

What Are the Alternatives to PayPal for Nonprofits?

Though Paypal is a widely used platform for sending and accepting payments by non-profit organizations globally, there are a few alternatives that may suit different organizational needs: 

  • Stripe

The well-known global payment processor Stripe collaborates with numerous different software platforms, including Donorbox! You can incorporate its contribution forms straight into the website of your nonprofit organization. It is a trusted processor.

  • Square

Providing services for both businesses and consumers, Square is a corporation that processes payments. For non-profit organizations, it also provides services for payment processing and donor data collection. 

  • WePay

Payment processing services are offered by WePay to both businesses and consumers. Additionally, it provides non-profit organizations with services for donor data collection and payment processing. For NGOs looking to increase donations, WePay is a PayPal substitute. 

  • Authorize.net

Using the well-known payment processor Authorize.Net, you can accept contributions for your cause from supporters worldwide. It’s easy for donors to make donations because they can pay right there on your website.

What Should Nonprofits Consider Before Choosing a Payment Provider?

Before you sign up for an account on Paypal, consider the following factors associated with Paypal for Non-profits: 

  1. Security

Over time, cybercrimes and data thieves have changed. Hackers are constantly developing new techniques to undermine the procedures and systems that organizations use to safeguard their donor data. Having a secure payment processor is crucial since it lowers the possibility of fraud and data theft. 

  1. Effortless Use

You want to pick a payment processor that will be simple for your charity organization to use, manage, and accept payments from supporters. 

  1. Service Charges

When contributors donate through a payment processing tool, organizations are charged payment processing fees. Giving contributors the choice to pay these costs is a popular practice among NGOs. By doing this, your organization will spend less money and make the most of each donation. 

  1. Inside Support

There is nothing better than knowing that the staff behind the product your company utilizes will be there for you when you need them the most.  The most important services to obtain from your payment company are top-notch support, first-rate care, and opportunities for continual learning.