Is PayPal Payment Processing Best For Your Nonprofit?

KindfulJanuary 05, 2021

PayPal for nonprofits header image showing person holding iPhone with PayPal logo

One of the best ways to send and receive money while emphasizing security is with PayPal for nonprofits. With its impressive suite of features, PayPal is the ideal payment processor to ensure your donors feel safe giving on your website.

With this in mind, we’ve answered some of the most common questions about using PayPal for nonprofits so you can make sure you have the information you need to make the right decision about which payment processor to use for your organization.

What does PayPal do?

PayPal is an online payment processing software that allows you to send and receive money electronically. PayPal makes accepting donations, processing e-commerce transactions, and invoicing simple and affordable. With PayPal, you can improve your donor’s experience and ensure you have what you need no matter where your mission takes you.

Donate button

One of the most recognizable features of PayPal is the donate button. With PayPal, you can easily create and customize a donate button for your homepage, allowing you to instantly begin receiving donations.

With the donate button, your nonprofit can receive all major credit and debit cards, choose specific donation amounts to offer, create event- or program-specific donation pathways, and allow donors to set up recurring contributions right from your home page.

Demonstration of PayPal donation button feature
Source: PayPal

E-commerce

PayPal allows you to accept all major credit cards, debit cards, PayPal, and Venmo and converts currency with no hassle. With PayPal Checkout, donors can complete their transaction while on your page and add recurring donations as a checkout option. This ensures you don’t miss a moment to connect with your donors and your donors feel comfortable donating on your website.

Demonstration of PayPal nonprofit checkout feature for e-commerce
Source: PayPal

Customized donation process

PayPal’s highly-customizable experience ensures your organization’s marketing and fundraising strategies remain in sync. You can create a custom link with your theme and logo and share it on your website, social media, email, and text messages. PayPal also allows you to request specific donation amounts through your link so you can meet your goals and donors’ expectations.

Demonstration of PayPal custom donation flow
Source: PayPal

Invoices

PayPal’s invoicing tools allow you to collect donations, send your invoices from any device, and automate the invoicing process with no software required. This enables you to stay organized and keep donors in the loop without taking away from your event and mission.

Demonstration of PayPal nonprofit invoicing tool
Source: PayPal

Is PayPal good for fundraising?

PayPal is an incredible tool for online fundraising. With features including donation buttons, donation forms, recurring gift registration, pledge tracking, and invoicing capabilities, PayPal leads the pack in nonprofit payment processing and ticks several boxes on your list of desirable online fundraising software features.

PayPal also offers, possibly, the most important feature: donor comfort. With its trusted brand and emphasis on security, you can be sure your donors will feel safe processing their donation through PayPal at any time or place and in any currency.

Despite this impressive suite of features, PayPal was not designed as an all-in-one fundraising tool. Without features like event registration, peer-to-peer fundraising, crowdfunding, wealth screening, or text-to-give, you might find that PayPal fails to meet your nonprofit’s needs.

This is where integrations come in. Integrations allow you to organize all your donor and fundraising data, so you know where to go to get the information you need. By integrating PayPal with other donor software, you can ensure your nonprofit has everything it needs to complete its mission.

Does PayPal work with other nonprofit software?

Part of the reason PayPal has widespread trust and name recognition is due to their integration potential. With integrations, you can piece together exactly what you need to manage your nonprofit’s business aspects without diverting focus from your mission.

For example, PayPal integrates with Kindful to ensure all of your donor and donation data are organized in one place. Additionally, Kindful’s comprehensive CRM ensures the relationships you gain from events and donations can be categorized and maintained. By integrating Kindful with PayPal, you can maximize your nonprofit’s fundraising and outreach potential.

Screenshot showing PayPal in the Kindful app store

What are the alternatives to PayPal for nonprofits?

When considering which payment processor your nonprofit should use, it’s essential to weigh all the options. Of course, safety and efficiency are top priorities; however, it’s also important to consider where the majority of your donations come from and what might make your donors feel most comfortable.

Additionally, features like donation buttons and e-commerce are not offered by every payment processor and are essential to many nonprofits’ operations.

Below we’ve outlined some of the best alternatives to PayPal so you can ensure you’re making the right decision for you and your donors.

Donorbox

Donorbox is donation processing software designed with nonprofits in mind. With Donorbox, you can easily manage recurring donations and store donor data. Because they specialize in donations, Donorbox caters to nonprofit-specific needs; however, they lack many of the transaction and e-commerce features supported by PayPal or Stripe.

Additionally, Donorbox processes donations through Stripe or PayPal. Though this ensures quick deposit times, nonprofits can choose to cut out the middleman by using Stripe or PayPal on their own.

Even though Donorbox doesn’t have an official integration with Kindful, you can still connect Donorbox and Kindful using Zapier.

Donorbox vs. PayPal

Features PayPal Donorbox
Donation buttons Yes Yes
Recurring donations Yes Yes
E-commerce Yes No
Customizable Yes Yes
Invoices Yes No
Integrates with Kindful Yes Partially with Zapier
Fees 2.9% + $0.30 1.5% platform fee +
processing fee

Stripe

Stripe is one of the payment processors already trusted by many business and nonprofits. It’s well known for its instant payouts and in-person transaction potential. Stripe also allows you to create donor profiles to track recurring givers and update expiring credit cards without contacting your donors.

Stripe integrates with Kindful to seamlessly sync contact data and donation history between your payment processor and CRM.

Stripe vs. PayPal

Features PayPal Stripe
Donation buttons Yes No
Recurring donations Yes Yes
E-commerce Yes Yes
Customizable Yes Yes
Invoices Yes Yes
Integrates with Kindful Yes Yes
Fees 2.9% + $0.30 2.9% + $0.30

Square

You’re probably familiar with Square from their card readers and point-of-sale transaction processors. Square allows you to easily process gifts and donations at events and keep track of donors with an online directory.

Additionally, Square offers customer engagement tools for nonprofits that aren’t ready to invest in nonprofit CRM software. For those who are ready, Square integrates with Kindful to organize your donors into groups, send targeted emails, receive feedback, and track donor relationships.

Square vs. PayPal

Features PayPal Square
Donation buttons Yes Yes
Recurring donations Yes Yes
E-commerce Yes Yes
Customizable Yes Yes
Invoices Yes Yes
Integrates with Kindful Yes Yes
Fees 2.9% + $0.30 2.6% + $0.10

What is PayPal’s nonprofit pricing?

PayPal offers a discounted transaction fee of 2.2% + $0.30 per domestic transaction to eligible 501(c)(3) organizations and maintains a 2.9% + $0.30 per transaction fee for all other organizations. All nonprofits must apply to be considered for the discounted fee.

With PayPal for nonprofits and charities, your donors choose how they want to give. Integrate with Kindful to keep ensure donor data all stays together. Learn more.

Filed Under:   Donor Management