How to Find the Best Alternative to PayPal for Your Non-Profit

How to Find the Best Alternative to PayPal for Your Non-Profit

how to collect donations online for non-profits

Non-profit organizations are a vital part of our society. There is always a need to support the less fortunate, and we should all be willing to take care of those who have fallen on hard times. However, small non-profits often face challenges when it comes to accepting donations because they don’t have the same access as larger charities have to banking services such as PayPal. The good news is that there are several other options out there for non-profits looking for alternative payment processing services. Here are some pros and cons of PayPal along with some tips you can use to find an alternative solution.

Step 1. Find out what your organization needs from a payment processor

online payment processors
alternatives to PayPal

The payment processor you choose for your non-profit organization will depend on what kind of payments you want to take.  For example, many non-profits rely on donations and so you will likely want to provide an easy means for website visitors to donate to your cause.

You may also want to sell items on your site such as e-books, digital products, even physical products.  You might sell these at cost for promotional purposes or pledge the proceeds to go back into your charity or organizational needs.Under any of those scenarios you will need some kind of online payment processing system unless you are taking payments offline. You can handle the sale of products with just about any online processing system, including PayPal, Stripe, Square, Shopify payment processing, and many more.  It’s simply a matter of researching the costs, ease of use for customers as well as for you, the Administrator.

Donations can be handled like a product too – for example, you could give your site visitors a choice of donation amounts – $20, $100, or $200 as an example, without the complication of allowing visitors to set their own donation amount. PayPal and others are aptly suited to this scenario.  You could even provide a choice of subscription amounts as a monthly or annual recurring donation.  A downside of using PayPal with this method is that donors must have their own PayPal account to pay for subscriptions. In most cases however, you’re going to want to allow your visitors to donate whatever amount they want.  In addition, you may want to allow any amount to be donated, but with a minimum amount as a required donation.  With this in mind, now is the time to start researching the best options for your online donation requirements.

Step 2. Research the best options for your non-profit’s needs

PayPal payment processor for non-profits

PayPal is certainly a viable option for any donation scenario.  PayPal even offers a slightly reduced transaction fee rate for non-profits: 2.2% + $.30 instead of 2.9% + $.30.  Keep in mind you must be a registered 501(c) charity in the United States to take advantage of this rate.  PayPal is fairly easy to use on any website.  If the platform you are using is not integrated with it, you can still set up PayPal Donation buttons on your site. The user experience can be somewhat jarring, though, as the donor is taken off your website and is prompted to sign into PayPal immediately upon clicking the “donate” link.

Stripe payment processor for non-profit organzations as an alterative to PayPal

Stripe provides a more streamlined user experience, as usually the donor will see a popup or will be directed to a nicely laid out donation form which makes it obvious where to include credit card or debit card information. 

The user does not feel like they are being whisked away from your website, and from which they may never find their way back. Stripe also offers a discounted transaction fee for non-profits, with an additional caveat: Your organization must have nonprofit status and be processing 80% or more of donation payments on Stripe.

Donorbox platform integration with Stripe for non-profit organizations

Stripe has an additional benefit due to its integration with a product called DonorBox.  This platform allows the flexibility to present your donations pitch in a way that is best for your organization.  You can set a minimum donation amount, allow recurring donations with Stripe, donation tracking and reports and more.

If your website is a SubHub membership website, you can use Stripe or Paypal or both as the platform is integrated with both processors.

Fundraising using events as an alternative to PayPal

Another type of payment structure is to couple donations with an event.   Eventbrite is an event platform that lets you sell tickets at a set price, but also provides a way to donate a voluntary amount in lieu of admission sales. Eventbrite might be a good solution for raising funds through a virtual event.  While they don’t offer a reduced transaction fee rate, you do have the option of passing the fee on to the donor, which in a charitable scenario, your donors may not object to doing.

Crowdfunding as an alternative to PayPal for non-profits

Yet another option for taking donations online as an alternative to Paypal or Stripe, is to utilize one of the crowdfunding platforms such as Indiegogo or Kickstarter.  These are a good option if you have a particular financial goal you need to meet or a particular project related to your cause that you need to raise funds for within a particular time period.  Kickstarter charges a fee on the entire amount you collect in addition to transaction fees, so it’s not the least expensive choice.  But because it’s based on pledges, you will only pay fees on donations that are successfully collected.  In addition, if your campaign is unsuccessful, meaning your target was not met and all donations were returned to the donors, you won’t pay any fees.

Step 3. Choose the best option and sign up with them

At this point, you should be ready to choose a fundraising model, whether it’s an event ticket scenario (Eventbrite), fundraising campaign or project (Crowdfunding), selling products or requesting either set or voluntary donation amounts (Stripe or Paypal).

Now it’s time to test out your choice.  If you’re using the SubHub platform for product sales, ticket sales or straight donations, Stripe and DonorBox or Paypal are going to be the easiest to implement as the integrations are built-in.  On SubHub, you can also utilize the membership and course functionality to augment your donation collections.

You could offer a free course or membership subscription with a donation or sell event tickets via the e-commerce store. Other platforms including WordPress allow plugins for those integrations too.

Whether PayPal is still your method of choice after weighing all the options or not, there are plenty of online possibilities for donations and for non-profit organizations to keep the funds coming in.

To try Stripe with DonorBox or PayPal’s payment processors with SubHub, sign up for a free trial today: https://subhub.com/trial

Is PayPal a good payment processor non-profits?

PayPal offers a non-profit rate that is slightly lower than their normal transaction fee – 2.2% + $0.30 instead of 2.9% + $0.30. However, visitors are taken away from the main website to sign up with or pay using a credit card with PayPal, which is not the smoothest user experience.

Is Stripe a better alternative to PayPal for non-profits?

Stripe offers the same transaction discount to non-profits as PayPal, so there’s no difference in price. However, Stripe is integrated with product called DonorBox that allows a great deal of flexibility in how your donations are requested and collected.

What is the best way to raise funds for non-profits online?

There are many different ways to raise money online: sell a product, put on an online event, sell tickets to an event, start a crowdfunding campaign, sell membership content, or simply ask for donations. Both Stripe and PayPal have a mechanism for soliciting donations.