PayPal for Nonprofits in 2021 – Everything You Need to Know

If you are a nonprofit organization member to help less fortunate people, the PayPal platform is your partner. For nonprofits, PayPal assists organizations that manage their funds most simply possible online. It allows organizations to raise money through online transactions. Be it one-time online donations or regular donations, PayPal’s digital payment platform is the right place for non-profits.

paypal for nonprofits

PayPal not only makes receiving money and the donation process quick and easy, but they also make 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 and reasonable transaction rates 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 nonprofits 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. There are online donation forms to fill out for donors, but here is the list of requirements that should be provided by nonprofits.

  • 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 candidacy documentation.
  • 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 to access the PayPal account. A Starter check does not count and is not considered valid.
  • The organization should own the bank account linked to the PayPal account. 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 only available on the business account. If the current account is personal, go to Profile Settings, and upgrade to a business account so that you can accept nonprofit donations.

Setting Up Non-Profit Account On PayPal

Setting up a nonprofit account is not so difficult. If the user intends to raise funds through online transactions, they can have a ‘Donate Button’ on their site. This will help the contributors to direct deposit the amount they are donating, allowing a smooth donation process. 

  • To add a donate button to your site, first, log in to your PayPal account. 
  • From the drop-down list on the home screen, select ‘Non-Profit.’ Scroll down a little to find fundraising methods. Select ‘Online Fundraising.’
  • On the next page, click on the ‘Learn More’ to add a button. Make sure to be logged in to your PayPal account. Click on ‘Create Button’ and continue. 
  • You will find several button types on the next page. Select the ‘Donate’ button from the list.
  • You need to select the Country or Region, Language, and button style. 
  • Next, enter your email and the purpose of the donations, and click on continue. The buttons will be created, and you will get a code. 
  • That code must be added to the Donation button on your website. You can also customize the button by adding other images. 

During the checkout process, you will be asked about donation amount options. Select ‘any amount,’ or you can fix a certain number. 

There will not be any fees for setting up your nonprofit account. Depending on the payment volume, you will be charged a fee. The fundraisers can use any major credit card to accept the payment. 

PayPal Mobile App

The fundraisers can use the PayPal app to raise funds. The app is available on Google Play Store and Apple App Store. People can download and log in to the app to use it on their mobile devices. It offers several user-friendly tools like online fundraising tools, reporting tools, among others.

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 to use the nonprofits’ name 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 offers to nonprofits, 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, the fee structure is clean. 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 customer service on 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 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’s official webpage.

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

But if you are new to these types of businesses, the PayPal nonprofit program is a good place to start. And while there are other options out there, PayPal still stands out. With 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.

PayPal nonprofit rate are lower than standard PayPal fees for online transactions. There are different fees for foreign currency conversion, in-person donations, and more, so it’s important to understand the fee structure for the services you’re planning on using to avoid any costly surprises. 

Conclusion

PayPal, being one of the leading online payment solutions, allows all users to take up different payment methods. Users can use their debit cards or credit cards for credit card donations or PayPalCash plus accounts, nonprofit accounts, and so on for online transactions. It is easy and handy. There are standard transaction fees to be paid, but PayPal would give discounts for donations for nonprofits regardless of donation amounts. 

PayPal helps you to maintain personal accounts as well as nonprofit accounts for donations. Entrepreneurs can use PayPal for all types of business and receive/make all types of payments. If you have queries regarding online payment service provider, payment processing fee, Payment providers, supplementary payment option, PayPal Giving Fund, donation payment gateway, mobile payments, payment processing solution, base transaction rates, domestic rate, nonprofit transaction rate, regular processing rate, PayPal Business or any questions regarding paypal, use the comment section below.

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