Really, your donors – and your organization! – deserve more than a PayPal button when they make online donations.
In a recent coaching session with a client, I jumped on my soapbox and started testifying about the importance of the donor experience. We then discussed why some donors are obsessed with sending a check, while others prefer to make online donations. I admitted that I am one of those donors that generally prefer to send a check versus make an online contribution because many nonprofits use a PayPal button – and that just doesn’t sit well with me.
Donations made directly to a CashApp or Venmo are also not immediately tax-deductible and can be easily embezzled. We know that gifts through GoFundMe or other crowd raising platforms definitely aren’t deductible. The main reason for this is that these apps are connected to individuals and not an organization. So your donation can be sent to the Venmo of Jeff Smith, and then he can forward that money to ABC Youth Center; however, you do not get the tax deduction – Jeff Smith does. (Okay accountant and lawyer friends – you can fight me on this, but that’s technically how it should work from a donation prospecting route).
Sorry, back to why PayPal is a terrible “donation platform”! Here are my top three reasons:
#1 – Anyone can create a PayPal donation button for online donations!
There is nothing special about the PayPal donation button, and you don’t have to be a nonprofit to create one. I prove it here by creating a donation link to support my Diet Coke addiction. For $1.61 a day, you can help keep me caffeinated by sponsoring a Big Gulp from 7/11. I’ve created options for one day, five days, and even an entire year. Please note, this donation is not tax-deductible but is appreciated. Please give generously. 😊
#2 – PayPal makes it challenging to keep in touch after online donations!
Online donors sometimes will give once and never hear from the organization. Your donation page needs to send more than just an automatically generated receipt. PayPal is not the easiest platform to integrate into nonprofit CRMs, so consider using a platform that automatically syncs with your current donor management system. If you don’t have a system, consider starting with a simple CRM like Little Green Light (Sign up and save $75 using the code “coltonstrawser”), DonorSnap, or visit Pond* to explore additional options.
#3 – PayPal isn’t always cheaper!
Many years ago, there weren’t many good products on the market to help with online donation processing – but that’s no longer the case. Now, PayPal is actually more expensive than other platforms and doesn’t have the bells and whistles to wow donors because PayPal was never really created as a donation processing website – unlike other specialized softwares.
- PayPal – 2.2% + $0.30 per transaction (nonprofit rate), regular rate is 2.9% + 0.30
- PayBee.io (A nonprofit donation and auction software) – 2.0% (My favorite if you are just looking for an “online donation button” that can also have silent auctions online! We are happy to refer you directly to the owner if you shoot us a message.)
- DonorBox – 1.5% Fee + Payment Processing Fee
In summary, if your website has a PayPal button – STOP IT! Philanthropic contributions to your nonprofit are important. You and your donors deserve a better online giving experience. Please spend 15-20 minutes creating a better process.
If you need support revamping your online giving, please feel free to drop us a note or schedule a strategy session to discuss how we can help!
By: Colton Strawser, Ph.D.
*Need Nonprofit Tech? Check out Pond – a partner helping nonprofits find solutions to tech problems! If you’re new to Pond – please indicate to Mitch and his team that we referred you.
P.S. This blog post uses some referral links, but we don’t refer awesome people to terrible products! If we receive any monetary commissions, we simply use it to pay to create additional free content like this or donate to different causes like replanting forests, buying books for young readers, or sponsoring nonprofit continuing education events.