PayPal donate button – pros and cons
Safe. Convenient. Easy. Fast.
These are all reasons why over half a million nonprofits choose to plug-in the PayPal donate button to their websites and fundraising pages. After all, PayPal is one of the most recognizable and trusted payment processing options.
And while that all may be true, every platform has its pros and cons. In this article, we will break down the PayPal donate button’s strengths, weaknesses, and alternatives for nonprofit organizations.
The Pros of Using a PayPal Donation Button
1. PayPal’s brand recognition increases the likelihood of donations. If a supporter is on the fence about giving to your organization, and they see the PayPal button, it may increase their chances of donating by up to 28 percent. While it’s convenient if donors already have a PayPal account, they don’t need one to go through with a transaction.
2. The PayPal plug-in is easy to set-up. In a matter of four clicks, you can create a PayPal donate button. Plus, embedding the PayPal donate button to your website is as easy as copy and pasting an HTML code snippet the company gives to you.
3. PayPal is known to be safe and reliable. Like most payment processors, PayPal is PCI-compliant to ensure security. Additionally, PayPal runs automatic fraud screenings and monitors donations 24/7. Donors love this - 75% of donors say they would give again if PayPal were a payment option. Reliability reassures supporters that their credit card information is safer.
4. PayPal connects with a handful of third-party systems. PayPal has teamed up with some of the most popular CRMs and fundraising platforms to include PayPal as a check-out option for charities. These partners include Givebutter, Blackbaud, Network for Good, Classy, FundRazr, and more. This integration makes it easy for nonprofits to process payments and collect donor data right into their CRM system.
5. PayPal is only available to verified 501(c)3 nonprofits. This isn’t as well-known of a fact, but it’s definitely a pro of using PayPal donation buttons. This is because it improves security and provides peace-of-mind to new donors.
The Cons of Using a PayPal Donate Button
1. PayPal takes donors to a third party site. What’s the risk of creating a PayPal button as a donation option? Likely, a higher drop-off rate. This is because sending supporters away from your website to donate may feel less secure without your branding or too time-consuming - even if it is just a few more clicks.
The Fix: Make sure your donation page stays on your website by partnering with a fundraising platform that includes a custom form embed code.
2. PayPal was not built for nonprofits. The PayPal button itself was created for individuals, e-commerce, and small businesses and is not optimized for nonprofits. There is a fundamental difference between making a transaction for a product or service and making a donation to charity. The psychological process is different; simply put, one is about getting, and the other is about giving. PayPal does not offer the ideal donor experience to bring donors back, again and again, to improve donor retention.
The Fix: Consider selecting a fundraising platform with payment processing built for charities (like Givebutter!) so that you can raise more funds in the long-haul.
3. PayPal includes limited branding options. You can include your organization’s logo and custom donation amounts but that’s about it. You cannot customize the check-out experience with your brand’s fonts, colors, pictures, or videos, which makes it less personal and may turn some donors away.
The Fix: Create a customized donation page with your branding so that it matches your website.
4. PayPal does not send automatic receipts from your organization’s email. It’s excellent that PayPal immediately sends donors receipts, but it’s not great that donors aren’t getting that directly from the charity’s email. Nonprofits with PayPal buttons have to send emails to donors with tax-deductible information manually. Not only is that a time-waster, but it also takes away from the donor experience. That’s one less immediate touch-point. Fewer touch-points lead to an increase in donor drop-off rates.
5. PayPal’s fees are not transparent. According to Paypal, over half a million nonprofits used the PayPal button in 2019 to raise billions of dollars. Of these funds raised, PayPal charges 2.2 - 3.9% + $0.30 per donation depending on the select plan, which is unclear on the website. PayPal offers access to funds of multiple currencies (and varying fees), usually within two business days to deposit directly into a nonprofit’s bank account.
However, for instant access, PayPal charges an additional 1% for all transfers with an eligible linked debit card or bank account. The bottom line is, many nonprofits end up paying 5% + $.30 per donation in transaction fees - not exactly what they thought they signed up for. Finally, PayPal does not allow donors to cover transaction fees, which leaves money on the table. At Givebutter, more than 99% of donors cover transaction fees!
The Fix: Choose a payment processing option with transparent fees and includes the check-out option that allows supporters to cover your processing fees.
6. PayPal offers limited payment methods. Unfortunately, with PayPal's limited payment options, supporters can only give manually with credit cards. That is, unless a supporter has a PayPal account they can link to. PayPal does not offer more convenient credit card integrations such as Apple Pay or Google Pay. Sadly, Venmo is hidden behind the PayPal donate button.
The Fix: Select a fundraising platform that includes stronger integrations for payment methods like Apple Pay, Google Pay, and Venmo.
7. PayPal has limited support. In fact, it is quite difficult to get in touch with support from PayPal at all. Most of the time, users are directed to website links.
The Fix: Be sure to ask your current fundraising platform or potential candidates more about their support. How much, if at all, is included in your membership? Will you be connected to actual humans? How soon do they promise to get back to you?
PayPal Donate Button - Is It Worth It?
PayPal is a well-recognized and trusted brand that donors feel is safe and convenient for them to donate. Using PayPal a viable option for nonprofit organizations. However, the PayPal plugin is not optimized for nonprofits, which leaves funding on the table. New and potential donors miss out on a donor-centric experience that builds recognition and trust with YOUR nonprofit over time - not just PayPal’s brand.
Learn more about Givebutter’s secure, easy-to-use, and transparent all-in-one fundraising platform built for nonprofits.