PayPal for Nonprofits in 2020 – Everything You Need to Know

If you are a member of a nonprofit organization to help less fortunate people, the PayPal platform is your partner. PayPal for nonprofits is a program to assist organizations that manage their funds in the simplest way possible online.

paypal for nonprofits

PayPal not only makes receiving money quick and easy, but they also make it sure that you get to transfer the funds to the organization’s bank hassle-free. In fact, everything happens in just a matter of minutes. That’s how convenient the whole operation will be.

Plus, they give fabulous discounts for nonprofit accounts. That means you get more for the price of a premium account. That is if we are talking about ease of service and security.

How Does PayPal Nonprofit Works?

PayPal nonprofit works almost the same way as a typical PayPal account with some adjustments. Since nonprofit organizations are basically charity institutions, PayPal has made all the transactions within the platform seamless.

But before PayPal acknowledges an account as a nonprofit, they have to meet some requirements. This means submitting some documents and whatnots related to the organization. Here is the list of requirements that should be provided.

  • Evidence of a nonprofit registration related to an established regulatory body such as Articles of Incorporation, IRS 501(c)(3) determination letter or even just a documentation of candidacy.
  • A letter of intent and some information that indicates how you plan to use the money or funds.
  • A pre-printed bank statement from the representative’s account. That means it should be from the name that owns the email account that will access the PayPal account. A Starter check does not count and not considered as valid.
  • The bank account linked to the PayPal account should be owned by the organization. A personal bank account does not count and not valid.
  • A letter of the mission of the organization.
  • Submission of a fundraising letter.
  • The PayPal account must be a business account and not personal to avail of other products that are only available on the business account. If the current account is a personal account, go to Profile Settings and upgrade to a business account.

Importance of the information

These requirements are of utmost importance due to many legal reasons. One of those reasons is to prevent money laundering and using the name of the nonprofit organization as a cover for these activities. These requirements are also meant to ensure that PayPal and the involved nonprofit organization meet the regulatory requirements of (for) the government.

Also, to avail of the discounted rate that PayPal is offering to nonprofit organizations, the IRS 501(c)(3) determination letter is a must. This is also to reassure the donors that their money is going straight to the organization and not to a single person.

For registered charities with 501(c)(3) status, a fixed flat rate fee is given with the discount already included. The flat rate is applicable for transactions ranging from 0$ – $100,000. If the transaction exceeds $100,000, please call 1-855-787-1012.

  • In the U.S. – a fee of 2.2% of the transaction amount plus a fixed fee based on the currency.
  • Outside the U.S. – a fee of 3.7% of the transaction amount plus a fixed fee based on the currency.

It does not matter what justified reasoning an individual can use to request for an exemption. These requirements must be submitted and verified to prevent legal bodies from questioning these types of accounts. For more information about PayPal nonprofits, visit PayPal official webpage.

While the PayPal nonprofit policy is a great tool for both donors and the nonprofit organizations, it is not the most optimal tool overall. One of the reasons is the fact that the PayPal donations form does not appeal as donor-friendly in terms of being a fundraising tool.

But if you are new to this kind of field, the PayPal nonprofit program is a good place to start. And while there are other options out there, PayPal still stands out. The security features and the fact that PayPal is generally an accepted payment method, you should fit in easily and feel familiarized with the platform.


What do you think about PayPal? Are you satisfied with all the requirements and the roundabouts when using it? Tell us what you think in the comment section. Or if you think that PayPal is not the right tool for you, what other payment methods you think would work best for nonprofit organizations?

Feel free to share your comments and suggestions down below. We also encourage participation by sharing us your questions about today’s topic. Rest assured that we will try to answer and respond to all of your queries as soon as possible.

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