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PayPal: Friend or Foe to Fundraising?

Online donation forms are a vital part of 21st century fundraising. But online payment processing can be complicated, especially for nonprofits. In particular, small-staffed nonprofits that have little time to manage it. Too often these nonprofits select a service like PayPal, thinking this is the less expensive approach and that, “Everyone uses PayPal, right?”

But there are substantial and hidden costs for nonprofits who take in donations and other online payments via PayPal. Did you know:

    • Conversion rates for PayPal donations forms are approximately 20% lower than other forms. One likely reason for this is your donors are required to log in if they’ve previously used a credit card or email address via PayPal. Any extra work for donors on an online form is a no-no, but imagine your supporters clicking a link to donate to your mission, but being stymied because they can’t remember their log in credentials for PayPal. Plus PayPal forms are presented shopping cart style, and are often inconsistent with your website which further confuses donors. This is especially true for older people (the average age of a donor is 65!) who do not use or understand PayPal.
    • Donation amounts are lower when made via PayPal. One reason is that there are restrictions to how you can donate via PayPal, and fewer options for customized payments.
    • PayPal has no customer service – everything is handled via email. Resolving an issue via email can be very time consuming vs. having the ability to speak with a support or account representative via phone.

Now PayPal is a fine product for many applications and markets, but nonprofits really need to consider if it’s right for them.

I urge any nonprofit professional who wants to plan for long-term donor base and revenue growth to consider a well-established product that is designed specifically for nonprofits. We offer many online payment options that help nonprofits avoid all the PayPal pitfalls and would be happy to discuss them with you.

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