Earlier this week The New York Times reported a federal class action lawsuit accusing the PayPal Giving Fund of collecting contributions for groups that may never receive the funds.

According to the Times, “ The philanthropic website by PayPal, the digital payment company, has become a major player in online fund-raising for charitable organizations worldwide, processing $7.3 billion in contributions last year. The Giving Fund site lists over one million organizations that can receive gifts, from well-known international nonprofits like Save the Children to obscure animal shelters like the Yogie and Friends Exotic Cat Sanctuary in Louisiana.

However…” Despite promises that 100 percent of donations go to the selected charities, the gifts are delivered only if the groups register accounts on both PayPal and the Giving Fund site, the lawsuit says.”

The essence of the suit is that many charities listed on the PayPal Giving Fund website are not actually registered.  Consequently, if the charity isn’t registered with a Pay Pal account of its own the donor’s contribution may or may not reach them.  AND…apparently, the donor is NOT informed.

The Giving Fund’s  frequently asked questions section  says that organizations not enrolled will be informed of the donations and be given at least six months to register accounts to claim the gifts. Otherwise, it says, “We may reassign their funds to another charitable organization.”

A word to wise fundraisers.

While we wait for lawyers and courts to sort this out, my advice is that every fundraiser find out the rules of the road for the PayPal Giving Fund and make sure your organization is not only registered to receive contributions made through PayPal, but that you also take advantage of the income-enhancing opportunities presented by PayPal.

Don’t ignore the importance of placing the PayPal option on your own donate page.

Yesterday, Tom’s post Fundraising and ‘Connected Spenders ‘ referenced a piece on the most popular online payment options by Angie Moore in nonprofitPro .

Angie noted: “The top preferred payment options are the same across all generations: Visa is first, and MasterCard is second; it’s the third spot that should make you go check your donation forms.

“According to a BizRate Insights study, there’s a distinct generation gap when it comes to the third most important payment option preferred by consumers. Yep, you guessed it: PayPal is in the third spot for every generation except seniors. In fact, PayPal is only separated from MasterCard by two points.”

Same holds when it comes to donors.  A donor insight study conducted by DonorVoice showed that PayPal came in consistently as the 3rd most used payment option behind Visa and Mastercard.   And that survey included a large number of seniors.

For many nonprofits PayPal is an overlooked payment option.  (It’s built into some CRMs but not in others).  I’m calling this to readers’ attention because not only may you be missing out on contributions but failure to include the PayPal option may be negatively impacting donors’ experiences with your organization.

In another study DonorVoice conducted a statistical text-mining analysis of open-ended comments from 22,000 donors to a range of organizations.  The study was designed to identify donor pain points and better understand donor experiences in ways not possible with transactional data.

Here are the Top Ten Experiences –good and bad—they found.

Many of these top comments are some you’ve no doubt already guessed.  But, one that surprised me, and the reason for including the above summary of the study in this post, was the unexpected (at least to me) insight that online donors want PayPal.  And those who donated through that option praised the nonprofit for providing the option.

In brief, given what I’ve seen from that study on door experiences PayPal may indeed be a real, and helpful pal when it comes to improving conversion  and donation rates on your online giving page.


P.S.   If you’d like a copy of the DonorVoice findings and some additional detail on PayPal’s low expense, high volume (On Giving Tuesday 2016 it set the Guinness Book world record for most donation transactions processed through a platform in 24 hours) and its effect on donor attitude contact Nick Ellinger over at DonorVoice. nellinger@thedonorvoice.com



This article was posted in: Donor acquisition, Donor Centricity - Case Studies, DonorTrends / DonorVoice, Integrated fundraising and marketing, Mobile marketing and fundraising, Research, Uncategorized.
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