5 Reasons Your Nonprofit Loses Donations With PayPal

Samantha Ste Marie
PayPal has always been the go-to choice for scrappy fundraisers looking to just "accept payments" from their website, but we all know that connecting with your donors and building long-lasting relationships takes more than a button click.

Basically, chat with anyone who has ever spent money online and they will tell you:

The experience matters with online donations.

Over the last several years, it has become more important than ever before to create a mind-blowing online purchase, or donor experience, simply because it’s easy, and very common, for people to click away when they are faced with something they don’t like.


Whether it’s a button that redirects them to a third-party site to make their donation or 20+ questions in your checkout process, eliminating annoying, and sometimes sketchy, parts of your donor experience can, and does, have an impact on whether or not they actually hit that “donate now” button.

We get it! In a pinch, creating a PayPal donation page does the job. Then again, so does an at-home haircut, which we saw too many of during the pandemic. We bet you’ve spotted a few of those at-home haircuts on the street!

If you’re looking for a quick and scrappy way to accept donations because you have a million other things on the go and you just need to GET. IT. OUT. THERE. Then PayPal can work for you.

It’s a household name that is widely recognized and therefore trusted.

Your donors may not think twice about the safety or security of their donation because you’re using a name like PayPal.

Creating a PayPal donation button is easy.

This means you don’t have to worry about whether or not you know enough coding to embed it. Ain’t no one got time for that.

PayPal connects with a bunch of different CRMS

Having this feature allows organizations to track data and process payments with ease.

Like we said, in a pinch, PayPal can work for you… Just like an at-home pandemic haircut. But, like most people who tried to dye their roots and ended up with a patchy mess, we don’t want you to end up spending more time and money later when you need a solution that is going to connect and build relationships with your donors.

If you’re an organization that prioritizes donor connections, then here are a few things about the PayPal donations system that you should keep in mind:

You Have Limited Customization

Your organization is unique. Your mission is unique. Shouldn’t your donation process be a reflection of that uniqueness?

Through the PayPal donation system, you have very limited customization options, which means you will not be able to truly create a donation process that will inspire and motivate people to donate.

You can add your logo… But that’s pretty much it. You’re not able to add any kind of fundraising pages or create events that you can promote to your donors and audience.

Ultimately, you can add your logo and accept donations, but there is very little you can do to make the donor experience exceptional, which we know you want to do.

PayPal Forces You to Redirect Your Donors


What we mean by this is when your donors are on your website and then click the “donate” button you’ve embedded via PayPal, they are then redirected to PayPal to make a donation.

We know that any additional redirects that someone has to go through to make a purchase, or a donation, means more drop-offs, or donation abandons.

BatMard Institute reasons for abandonments during checkout bar graph.

Source: BayMard Institute

What this graphic tells us is that when you avoid redirects, which have the possibility of being broken, taking a long time, or crashing, you can save more than 13% of the people who stated that “website errors” are the reason they abandon their checkout process. When you combine that with the 22% of people who said they abandon their checkout due to a slow process, that’s a whopping 35%!

Imagine what you could do with a 35% increase in donation completion! Keeping the donation process on one page ensures that more people will actually fill out their information and hit “complete donation”

PayPal doesn’t manage your donors

PayPal doesn’t act as an overall donor management system that will allow either you or the donor to make changes. For example, donors can’t log on to grab tax receipts or make changes to their donor profile on their own.

All they can do is donate, get an email receipt. We know you want a better donor management system.

After all, this limitation doesn’t allow you to gather donor data or build a donor community within your donation system, which means needing to constantly look for new donors instead of looking for new ones while also nurturing existing.

PayPal doesn’t let your donors start fundraisers

Word of mouth is and has been, one of the most powerful ways to spread the word about an organization, a cause, or a sneaky party while your parents are away. We’ve all been there!

When you use a PayPal donation page, your donors can’t set up a peer-to-peer fundraising page and help you spread the word. They can’t become ambassadors and help you create the impact you are looking to create.

Think about events that involve families and friends coming together to donate as a group and then partake in a walk or run in honour of someone they know. This option is completely removed from their experience as a donor, which takes away from the community feel that comes from groups joining together for a cause.

Givecloud shares that 56% of donors attend fundraising events and 35% donate at events.

This means that allowing others to fundraise on your behalf is crucial to getting more donations.

PayPal doesn’t automatically communicate with your donors

Do you have something amazing coming up inside of your organization that you want your donors to know about? Turns out that PayPal can’t automatically communicate with your existing donors.

You need to be able to communicate with them about ways they can continue to get involved and support your initiatives. Not to mention that your donors WANT to hear from you. They want to know how they can continue to help.

Unfortunately, PayPal does not allow you to automatically communicate with your donors when you need to. Think about all the time you spend chasing down donors with expired credit cards. What if your donation system did the communication for you? For example, your donors would get an email saying: “Your card is expiring next month so make sure you update it to continue feeding the hungry families in your community’. Simply put, you can retain more donors with automatic emails.

By using PayPal’s donations system you will need to come up with some other way of getting in touch with your donors versus having a system that hosts their information and therefore allows you to continue building your connections with them over time.

Stop Losing Money With PayPal

If you’re just getting started or need to put something together quickly then PayPal might be a good option for you.

Think of it as the “good for right now” DIY project that I think we’ve all done once or twice in our lives. Maybe it’s using contact paper to cover your kitchen countertops… It doesn’t last long and you’re definitely going to need to redo it sooner than you thought.

If you’re looking for a solution that is going to help you build an exceptional donor experience, which also allows you to build better connections and relationships, then create your donation form with Givecloud Express (our new free-forever plan)!

Did we mention it’s just as easy to install as PayPal?!


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