What you need to know about PayPal giving fund for nonprofits

PayPal was founded in 1998, making it one of the oldest and most recognizable online payment systems. 

For nonprofits and their supporters, PayPal continues to be a popular way to raise money. In fact, in 2023 PayPal customers donated over $19.8B to charity using the software. 

But before you jump on the PayPal for nonprofits bandwagon and switch to PayPal Giving Fund, it’s important to understand their controversial Donation Delivery Policy—and how it could potentially damage your fundraising efforts.

What is PayPal Giving Fund? 

PayPal Giving Fund, formerly known as the PayPal Generosity Network, partners with businesses to allow customers to make tax-deductible donations directly to an organization’s PayPal charity account through popular online commerce sites and community hubs. 

This method of giving is popular among well-known nonprofits—organizations like Doctors Without Borders and the American Cancer Society are just a few examples of nonprofits on PayPal’s charity list.  

How does PayPal Giving Fund work?

At checkout, customers are prompted to add a gift to their favorite 501(c)(3) organization to their total (regardless of whether or not they have a PayPal account). Alternatively, customers can visit a charity's PPGF profile page and make a direct donation there.

The fine print 🧐

PayPal Giving Fund is a distinct 501(c)(3) public charity, not just a program of PayPal. This has significant consequences for how the donation and payout process functions. 

For instance, if a donor selects your nonprofit at checkout and contributes $50 toward your mission, that $50 is actually a PayPal charity donation, meaning it’s a donation to PPGF. From PPGF’s perspective, the donor has “recommended” your charity for a $50 grant—yikes! 

PPGF provides the donor with a tax receipt, but before any funds go to your nonprofit, PPGF vets your organization to determine whether the funds will be granted to you. 😵

Is PayPal Giving Fund legit?

In many cases, nonprofits receive their funds in 15 to 45 days without any issues. However, there is a possibility that funds intended for your organization could be given to a different charity. This was one of the reasons behind the PayPal Giving Fund lawsuit a few years ago.

In a 2020 lawsuit settlement, PayPal Giving Fund agreed to display its policy more prominently, so donors are aware of the risk (which could encourage supporters to donate directly on your website or fundraising platform instead). 

Additionally, PPGF now has to make several efforts to notify nonprofits that they must take additional steps to receive their funds. 

How do you enroll in the PPGF?

You don’t have to enroll your charity with PayPal Giving Fund to receive donations through the PayPal platform. PPGF partners with GuideStar to build its directory of charities, giving donors plenty of organizations to choose from.

That said, enrolling has a few benefits, like faster payouts. Nonprofits that aren’t enrolled face additional vetting, receive their funds by check or other means, and could wait up to 90 days for their payout.

Here’s a snapshot of the enrollment process:

• Set up: Sign your nonprofit up for a PayPal Business account.
• Confirm charity status: Verify your tax-exempt charity status with financial and identification documents.
• Collect funds: Enroll with PayPal Giving Fund using your charity’s PayPal account. That’s it!

4 perks of using PayPal Giving Fund

1. No PayPal Giving Fund fees 👏

Normally, when nonprofits use a PayPal donate button or form for donations, there's a 1.99% + $0.49 payment processing fee for each transaction. PayPal Charitable Giving Fund doesn't charge any fees to nonprofits for using its services. It also provides donors with donation receipts, allowing them to write off charitable contributions on their taxes. 

Charities receive 100% of funds contributed by donors. In some cases, however, a PPGF partner (like eBay, GoFundMe, Nextdoor, etc.) may charge payment processing fees for donations made through their e-commerce platforms.

🤔 Did you know? The only way for charities to raise money on GoFundMe now is through PayPal Giving Fund, as GoFundMe Charity shut down in February 2021. 

PayPal Giving Fund has since become the receiving charity for all donations made to verified nonprofits on GoFundMe.

2. Global reach 🌍

PayPal charitable giving powers more than 390 million active user accounts across hundreds of global markets and supports over 100 different currencies. By enrolling with PayPal Giving Fund, your charity has the potential to reach an audience of millions. 

Charities enrolled in PayPal Giving Fund are also eligible to join its newer program, Venmo Charity Profiles. This serves as a campaign hub where donors can explore fundraisers and support their favorites.

Nonprofits enrolled in the PPGF are also eligible to accept grants electronically from verified grant partners through PayPal’s Grant Payments program.

3. Recurring donations 📅

PayPal Giving Fund recurring donations are a huge perk for nonprofits. The platform makes it easy for donors to sign up for recurring donations. 

During checkout, donors can simply check a box to switch their one-time donation to a monthly contribution.

4. Mobile-first platform 📱

Did you know that 57% of nonprofit website traffic comes from mobile devices?

Using a mobile-optimized charitable giving fund like the PPGF ensures that your donors' payment process is smooth and stress-free. PayPal is particularly attractive to younger demographics, like millennials and Gen Zers, who prefer mobile giving.

3 problems with PayPal Giving Fund

1. Donations can be redirected away from your charity 😱‍

As mentioned earlier, PayPal Giving Fund has the power to decide whether to ultimately award funds to your nonprofit. They might withhold donations if there’s an issue vetting your organization or due to any number of other factors described in their Donation Delivery Policy. 

2. Long waits to receive payments ⏰

If your charity is enrolled in PayPal Giving Fund, it takes anywhere from 15 to 45 days to receive your funds. If your charity isn’t enrolled, the wait can be even longer—up to 90 days for PPGF to grant funds.

3. PPGF donation pages are lackluster 💤

PayPal Giving Fund donation pages offer limited customization options, resulting in a forgettable giving experience. PPGF pages for organizations like St. Jude Children's Research Hospital and Save the Children look and feel the same. In addition, donation levels are pre-set at $25, $50, $75, and $100, with no explanation of what each level will accomplish. This makes it challenging for nonprofit supporters to understand exactly how their donations will be used 

The bottom line: PayPal Giving Fund is legit but unreliable

The PayPal charity fund may broaden your nonprofit’s audience, help your organization save money through fee-free giving, encourage recurring donations, and be mobile-savvy.

On the other hand, accepting donations with PayPal Giving Fund often results in delayed payouts and donation denials, and doesn’t offer enough customization options for their donation pages. That’s why so many seek alternatives to PayPal for nonprofits.

Dive Deeper

See a full side-by-side comparison of Givebutter vs PayPal →

Reap the benefits of PPGF without the drawbacks 🙏

Most nonprofits will receive donations from PayPal Giving Fund whether they enroll or not. So, it’s worth signing up for PPGF to make receiving these funds as hassle-free as possible. But, PayPal Giving Fund (and its related programs) shouldn’t be your nonprofit’s main revenue stream, given the drawbacks.

Instead, let Givebutter be your fundraising hub: one platform to raise money, engage with donors in real time, and track progress through our free nonprofit CRM. At Givebutter, we know the importance of beautiful, interactive fundraising pages. That’s why we give you tons of options to highlight the unique aspects of your brand and mission—images and GIFs, in-depth descriptions, and live supporter feeds.

I like how Givebutter can accept donations via pretty much any form of payment, like PayPal, credit card, Venmo, and Google Pay. We are always surprised by how often someone opts to use one of these various payment methods. All of these methods vastly improve the user experience for making a donation on a mobile device. — Givebutter review, Andrew H. 

With Givebutter, you can do everything a PayPal nonprofit account can and more: embedding donation forms, creating social fundraising pages, hosting memorable fundraising events, organizing donor data, and accepting a variety of payment methods. 

‍Sign up for your free Givebutter account in less than five minutes and start building a steady stream of donations today.

FAQs: Top questions on Paypal Giving Fund

Is the PayPal fund legitimate?

Yes, PayPal Giving Fund is a legitimate fundraising tool used by many nonprofits. However, it does come with some drawbacks, including longer wait times for payments and limited donation form customization features. 

What is the difference between PayPal and a PayPal giving fund? 

PayPal is an online payment system. PayPal Giving Fund is a registered 501(c)(3) that only accepts charitable contributions. Nonprofits can create their own PPGF account to receive donations. 

Who is eligible for a PayPal giving fund? 

If your organization meets the following criteria, you’re eligible for PayPal Giving Fund: 

• You have an active PayPal business account
• You’re a 501(c)(3) public charity, private operating institution, religious institution, or Indigenous tribe
• You’re in good standing with the IRS

What is Meta PPGF? 

As of October 31, 2023, Meta partnered with PayPal Giving Fund to accept online donations in the U.S., Canada, Australia, and the U.K. Meta PPGF simply refers to Meta’s partnership with PayPal Giving Fund.

What is Paypal Giving Fund (PPGF) processing fee structure? 

PayPal Giving Fund does not charge fees to charities or donors. PayPal covers 100% of these party payment processing fees. However, if a supporter chooses to donate to PayPal Giving Fund through a partner site, the partner’s processing fee will apply.