PayPal For Nonprofits: How To Easily Accept Donations Online And Other Helpful PayPal Features For Your Organization

We’ve done in-depth testing of each and confidently recommend them.

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I’ll note that PayPal also offers a Virtual Terminal that you can use to process in-person payments (or accept donations over the phone). However, you’ll need a PayPal Payments Pro account to use it, and Payments Pro costs $30/month. Because other platforms offer a virtual terminal for no monthly fee whatsoever, we don’t recommend this as an in-person donation acceptance method. Also, the Virtual Terminal’s 3.1% + $0.30 per-transaction processing fee is higher than PayPal’s standard in-person transaction fee.

Sell Event Tickets

Perhaps your nonprofit holds events, such as annual retreats or charity galas, from time to time. Or maybe you’ve thought about holding a walkathon to motivate donors to give. If so, you’re in luck, as PayPal integrates with Eventbrite for ticket sales. With PayPal’s Eventbrite integration, not only will you be paying a lower processing rate than with a standard Eventbrite subscription, but you can also choose to pass Eventbrite’s fees on to the customer and avoid paying them yourself. Alternatively, you can absorb the fees to keep your donors happy. Your choice!

Eventbrite offers three different subscription packages tailored for event organizers. All three packages include access to the Organizer app for both iOS and Android devices that, when paired with the rental equipment on offer, can transform your mobile device into a box office.

Track Your Income & Improve Your Bookkeeping

PayPal’s reporting tools give you detailed information about the activity associated with your PayPal account and can assist your nonprofit with bookkeeping. Available reports include monthly and annual financial summaries, monthly sales reports, your chargeback/dispute history, transaction history, order fulfillment reports, money management reports, customer agreement details, Payflow gateway reports, and more.

Additionally, if your nonprofit organization processes $20,000 in gross payment volume from sales of goods or services in a single year and processes 200 payments for goods or services in the same year, PayPal will send Form 1099-K to both you and the IRS for that year early in the following year. Your 1099-K will be accessible from your PayPal account as of January 31st of the following year, and it will tally your payment transactions from the preceding year. You can see further details about PayPal’s tax reporting here on its tax information page, including FAQs and a downloadable guide.

Furthermore, PayPal integrates with QuickBooks via the Connect to PayPal data integration app, available from your QuickBooks account.  With this app, you can transfer up to 18 months of PayPal transactions into QuickBooks. You can also import your discounts, taxes, customer data, transfers, and PayPal expenses. View detailed sales information, including your PayPal fees, in your sales transactions. The Connect to PayPal app is free for all QuickBooks users.

Check out this article to see how the services QuickBooks provides can benefit a nonprofit organization.

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Alternatives To PayPal For Nonprofits

Let’s walk through the primary alternatives to using PayPal for nonprofits. Let’s start with online fundraising software:

  • Fundly: Fundly is an online crowdfunding site with particular appeal for nonprofits as a PayPal alternative, as your fundraising page is completely customizable. You’ll have easy social sharing integrations at your fingertips, intuitive management tools, and the ability to offer perks to donors, depending on their level of support. However, you’ll have to contend with a 4.9% platform fee on top of the 2.9% + $0.30 fee charged to each transaction.
  • Qgiv: Qgiv’s online fundraising platform is another PayPal alternative worth your consideration from a nonprofit standpoint. Qgiv’s donation forms are fully customizable (much more so than PayPal’s donation forms) and mobile-responsive. The platform allows for recurring gifts to encourage donors. Qgiv even provides an auction platform and event management capabilities from its app. Qgiv’s pricing and fees both vary depending on the level of service you need.
  • GoFundMe: Most people think of GoFundMe as a platform for personal fundraisers, but did you know that GoFundMe supports nonprofit fundraising as well? With GoFundMe, you can launch an unlimited number of campaigns, access basic donor data, and set up team fundraising pages, all without paying a monthly fee or a platform fee (just a 2.9% + $0.30 processing fee). Alternatively, you can use GoFundMe’s CrowdRise software to enhance your fundraising capabilities further. CrowdRise’s Essential package offers more extensive donor data, ticketing and registration features, deductible email receipts, and more. While the Essential package does sport a platform fee of 5%, this package also lets you pass the fees — both the platform fee and the payment processing fee — on to the donor. Read our GoFundMe review to learn more about the platform.

When it comes to using third-party processors to process your donations, PayPal isn’t the only game in town. Let’s explore the other big third-party processor offering nonprofit-specific benefits:

  • Square: Square has a lot to offer nonprofits as a payment processor. While Square doesn’t offer a discounted processing fee for nonprofits, its 2.6% + $0.10 per-transaction rate for swiped, dipped, and tapped payments through the Square point of sale app is extremely competitive and cheaper than PayPal’s in-person processing fees (Square’s online processing fee is 2.9% + $0.30). Capturing donor information is easily done right from the transaction screen of the Square POS app, automatically adding your donors to your Customer Directory. Team members can accept donations on your behalf via the POS app as well. And that’s only the tip of the iceberg when it comes to Square’s nonprofit-friendly tools. Read our Square review to get the full scoop, and check out our Square VS PayPal piece for a direct comparison of the two.

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Now, what if you don’t like the idea of using a third-party processor and would rather use a traditional merchant account? While merchant accounts don’t normally come with as many add-on software options as a third-party processor, their laser-focus on payment processing means that you’re much less likely to experience an account hold or termination than with PayPal (or Square, for that matter).

  • Dharma Merchant Services: This merchant account provider is quite well-suited to nonprofits, provided your organization takes in more than $10,000 per month. Dharma features transparent interchange-plus pricing, which should see you saving money over a service such as PayPal. And unlike some other merchant account providers, Dharma doesn’t charge account setup fees, annual fees, or early termination fees, nor are there any monthly minimums to worry about. Dharma also provides more comprehensive customer support than you’re likely to get with PayPal. Read our full review of Dharma Merchant Services to see exactly why we like them so much.

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Is PayPal Right For Your Nonprofit?

We can’t guarantee that PayPal is the right payment processing solution for every nonprofit. However, when it comes to accepting online donations, PayPal is the absolute simplest tool out there.

With support for in-person payments, invoicing, reporting, nonprofit-specific discounts, and the fact that PayPal’s massive list of integrations with other platforms means you will almost certainly be able to fill any functionality gaps left by PayPal’s in-house solutions, PayPal is more than capable of powering your nonprofit organization. Alternatively, PayPal makes for a great supplementary payment option if you primarily accept donations via other means.

Check out our article on saving money on payment processing as a nonprofit for more on how to keep your costs down. And if you have experience working with PayPal as part of a nonprofit organization, drop us a comment and let us know about it!

The post PayPal For Nonprofits: How To Easily Accept Donations Online And Other Helpful PayPal Features For Your Organization appeared first on Merchant Maverick.

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