Verdict: PayPal's charity rate (1.99% + $0.49 per transaction) costs a typical nonprofit $1,245 on every $50,000 raised. Zeffy charges $0 — no platform fees, no transaction fees, ever.
What works: PayPal's name recognition, Venmo integration, and Giving Fund access make it easy to get started.
What doesn't: Fees stack fast, account holds hit without warning, and the Giving Fund delays disbursement while stripping your donor data.
Best for: Nonprofits that already have PayPal set up and process very low donation volumes.
Worth considering if: You raise more than $10,000 a year — at that volume, switching to a zero-fee platform starts saving real program dollars.
Every dollar PayPal takes is a dollar that doesn't reach your mission. The PayPal fee for nonprofits starts at 1.99% + $0.49 per donation — fees feel small until you do the math on a full year of fundraising. This guide shows you exactly what PayPal charges nonprofits, what those fees cost in real program dollars, and what your options are if you want to keep every cent you raise.
Table of contents
How much does PayPal charge nonprofits?
Nonprofits that qualify for PayPal's charity rate pay 1.99% + $0.49 per domestic transaction. That's the discounted rate for confirmed 501(c)(3) organizations. Without it, you pay the standard business rate of 2.89% + $0.49.
Here's how the charity rate breaks down on common donation amounts:
|
| $10 | $0.69 | $9.31 |
| $25 | $0.99 | $24.01 |
| $50 | $1.49 | $48.51 |
| $100 | $2.48 | $97.52 |
| $250 | $5.47 | $244.53 |
| $500 | $10.44 | $489.56 |
| $1,000 | $20.39 | $979.61 |
The per-transaction $0.49 flat fee is what really punishes small donations. A $10 gift loses nearly 7% before it reaches your cause.
International donations cost even more. PayPal adds 1.50% on top of the domestic rate for cross-border transactions, and fixed fees vary by currency.
PayPal fee calculator — how much is your nonprofit losing?
What PayPal fees really cost in program dollars
Percentages feel abstract. Real program losses don't.
|
| $10,000 | ~$249 | 83 meals at $3 each |
| $25,000 | ~$623 | 12 months of tutoring stipends |
| $50,000 | ~$1,245 | A part-time program assistant for a month |
| $100,000 | ~$2,490 | 415 hygiene kits for a shelter |
| $250,000 | ~$6,225 | 25 full youth scholarships |
On $50,000 in annual donations, PayPal takes roughly $1,245. That's money your donors intended for your mission, not for a payment processor.
Matt Payne from Outer Circle Foundation put it plainly:
We were disappointed and frustrated with the experience with the other platforms; getting responses from support was not easy, and then the fees they charge a nonprofit is disappointing. As a nonprofit, we work so diligently to raise money to support our veterans and first responders, it's disheartening that such a large portion had to go to technology platforms.
— Matt Payne, Outer Circle Foundation
Outer Circle Foundation paid thousands in PayPal fees. With Zeffy, they raised $29,000+ for free.
Full PayPal nonprofit fee chart (2026)
PayPal's fee structure has multiple layers. The charity rate is the starting point, not the whole story.
|
| Charity transaction fee | — | 1.99% + $0.49 | — |
| International charity transaction | — | 1.99% + fixed fee by currency | +1.50% |
| Payments Pro | $30.00 | 1.99% + $0.49 | — |
| Payments Pro recurring billing | $10.00 | — | — |
| Payments Pro recurring payment tool | $30.00 | — | — |
| Payflow Pro | $25.00 | — | $0.10/transaction |
| Payflow recurring billing | $10.00 | — | — |
| Donate Button | — | 2.89% + $0.49 | — |
| Zettle (card present) | $30.00 | 2.29% + $0.09 | $29 first reader / $79 additional |
| Zettle (QR code) | — | 2.29% + $0.09 | — |
| Zettle (manual card entry) | — | 3.49% + $0.09 | — |
| Account Monitoring Service | $19.95 | — | — |
| Advanced Fraud Protection | $10.00 | $0.05/transaction | — |
| Buyer Authentication Service | $10.00 | $0.10/transaction | — |
| Card Verification | — | $0.30/transaction | — |
| PayPal Fundraisers (listed) | — | 2.99% | — |
| PayPal Fundraisers (unlisted) | — | No fee | — |
Note that the Donate Button — the most common integration for nonprofit websites — charges the standard 2.89% + $0.49, not the charity rate. You need to use PayPal's specific charity checkout flow to access the 1.99% rate.
You can verify current rates directly on PayPal's fee page.
Is PayPal Giving Fund really free?
PayPal Giving Fund processes donations with $0 fees, and it sounds like an easy solution. But there are real costs that don't show up in the fee column.
What the Giving Fund actually does
When a donor gives to your nonprofit through PayPal Giving Fund (through eBay listings, Facebook fundraisers, or PayPal's own charity search), the donation goes to PayPal Giving Fund first, not to your organization. PayPal Giving Fund is its own registered 501(c)(3) that then regrants the money to you.
The real catch
- You lose donor data. The donor relationship is between the donor and PayPal Giving Fund, not your nonprofit. You may never receive the donor's name or contact information, which makes stewardship and retention nearly impossible.
- Disbursements are delayed. PayPal Giving Fund batches and releases funds on its own schedule. You don't control when the money arrives.
- PayPal controls eligibility. If your charity status lapses or PayPal decides your organization doesn't meet its criteria, donations can be redirected to other causes.
- You can't opt into Giving Fund directly. Enrollment requires confirmed charity status with PayPal, and PayPal shares your organization name, email, address, and EIN with each grantmaker.
For grant funding through the Giving Fund portal, that's a different use case. But if you're treating Giving Fund as your "free PayPal" workaround for regular donor giving, you're trading fees for something arguably more valuable: your donor relationships.
How much does PayPal take from donations?
The short answer: at the charity rate, PayPal takes 1.99% plus $0.49 on every domestic donation. On a typical $50 gift, that's $1.49. On a $25 gift, it's $0.99.
That seems small. Here's what it adds up to:
- At $10,000/year raised, you lose ~$249 to fees.
- At $50,000/year, you lose ~$1,245.
- At $100,000/year, you lose ~$2,490.
And that's only the charity rate. If you're processing manual card entries through Zettle, the rate jumps to 3.49% + $0.09. If you're using the Donate Button without the charity flow configured correctly, you're paying 2.89% + $0.49.
Real users notice:
PayPal does not allow flexibility when it comes to recurring donations. Since we are a church, many members like to pay their tithes and offerings online and several have asked for automatic giving through PayPal and they do not allow as many options as some other platforms out there. We also dislike the tighter fees when cards are processed manually.
— Katelyn C., Executive Administrative Assistant"The thing I dislike about PayPal is in order to use their button on our website, you have to pay for a monthly service plan to have this option, otherwise you can add a link to your page, and the donor has to click the link to leave your page to go to PayPal to complete the donation. That is too many clicks." — Will S.
The hidden costs most nonprofits don't expect
The fee chart tells you the rates. It doesn't tell you about the situations that catch nonprofit finance teams off guard.
Account holds on large gifts
PayPal's fraud systems flag unusual activity, including major gifts. Nonprofits report having accounts frozen after receiving a large bequest or a spike in donations following a campaign. While PayPal reviews the activity, your funds are inaccessible. That's a cash flow crisis at the worst possible moment.
Chargebacks
PayPal's Seller Protection doesn't cover donations. If a donor disputes a charge, you absorb the chargeback fee on top of losing the donation amount. Nonprofits that receive donations from unfamiliar donors (think viral campaigns) are especially exposed.
No donor segmentation
PayPal wasn't built for nonprofits. You can't segment donors by program interest, giving capacity, or engagement history. That limits your ability to send targeted appeals and costs you in retention over time.
Manual card entry costs more
If a board member takes a phone donation and manually enters the card through Zettle, that transaction hits 3.49% + $0.09, not 1.99% + $0.49. And manual card entry payments are not covered by Seller Protection.
Tax receipts aren't included
PayPal sends transaction confirmations. It does not send tax-deductible donation receipts with your EIN and the deductibility breakdown that donors need for their tax filings. You have to handle that separately.
How can nonprofits avoid PayPal fees?
You have a few options, depending on how much you're willing to change your setup.
Option 1: Confirm your charity rate
If you're using PayPal and haven't enrolled in the discounted nonprofit rate, start there. You need a PayPal Business account, your 501(c)(3) determination letter, and your EIN. The review takes up to three business days. This gets you from 2.89% + $0.49 down to 1.99% + $0.49 — meaningful savings, but not zero.
Option 2: Use PayPal Giving Fund for specific campaigns
For campaigns where donor data isn't critical (a one-time giving day, an eBay charity listing), Giving Fund's $0 fee is useful. Just understand that you won't own the donor relationship. Don't use it as your primary donation channel.
Option 3: Switch to a zero-fee platform
This is the only option that eliminates fees entirely. Zeffy charges $0 in platform, transaction, or credit card fees. It's funded entirely by optional donor tips. More than 100,000 nonprofits have raised over $2 billion through Zeffy with $0 going to fees.
With Zeffy, you get:
- Customizable donation forms
- Automatic tax receipts with your EIN
- Tap to Pay for in-person donations
- Accepts all major credit cards, Apple Pay, Google Pay, ACH, and checks
PayPal vs. Stripe fees for nonprofits
This comparison comes up constantly in nonprofit communities, so here's a clear side-by-side.
|
| PayPal | 1.99% + $0.49 | $0 (basic) | Must apply for charity rate; Donate Button charges 2.89% + $0.49 without proper setup |
| Stripe | 2.2% + $0.30 | $0 | Discounted from 2.9% + $0.30 for verified nonprofits; no flat fee waiver |
| Zeffy | 0% + $0 | $0 | No platform, transaction, or credit card fees. Ever. |
PayPal's charity rate is slightly lower than Stripe's nonprofit discount on percentage. But the $0.49 flat fee hurts more on small donations. A $15 donation costs $0.79 with PayPal (5.3%) and $0.63 with Stripe (4.2%). Neither is $0.
For organizations raising $50,000+ annually, the difference between PayPal and Stripe is a few hundred dollars. The difference between either and Zeffy is $1,000–$2,500 or more.
What Zeffy users say about switching
Zeffy has been great, especially the customer service. After I signed up, a member of Zeffy emailed and called to check in to see if I had any questions. I've had much follow-up since and if I ever have a question, they respond very quickly!
— Chase C."Customer support was very responsive to my questions and put me at ease before we launched our registration form." — Carrie B."Overall, we are happy with our experience with Zeffy. From a customer service standpoint, they are very responsive when issues are raised, generally within 24 hours or less." — Cheryl D.
Zeffy keeps every dollar in your mission. No platform fees, no transaction fees, no credit card fees. Funded entirely by optional donor tips.
FAQs
Is PayPal free for nonprofits?
No. PayPal offers a discounted charity rate of 1.99% + $0.49 per domestic transaction for confirmed 501(c)(3) organizations, but that's not free. International donations add another 1.50%. Several services like recurring billing and virtual terminal features also carry monthly fees.
How do I apply for PayPal's nonprofit charity rate?
Sign up for a PayPal Business account, provide your organization's EIN, bank account statements, and your IRS 501(c)(3) determination letter. PayPal reviews the application in up to three business days. Once approved, your transaction rate drops from 2.89% + $0.49 to 1.99% + $0.49.
Does the PayPal Donate Button use the charity rate?
Not automatically. The standard Donate Button charges 2.89% + $0.49. You need to configure your account to use the charity checkout flow to access the 1.99% rate. This is a common source of confusion that costs nonprofits money.
What happens if PayPal puts my nonprofit account on hold?
PayPal can freeze your account if its systems flag unusual activity — including large gifts or a sudden spike in donations. During the hold, you can't access your funds. PayPal reviews the account before releasing money, which can take days or weeks. This is a real cash flow risk for nonprofits.
Is there a completely free alternative to PayPal for nonprofits?
Yes. Zeffy charges $0 in platform, transaction, and credit card fees. It's built specifically for nonprofits and funded entirely by optional donor tips. Over 100,000 nonprofits have raised more than $2 billion through Zeffy with zero fees taken from donations.
How does PayPal compare to Stripe for nonprofits?
PayPal's charity rate (1.99% + $0.49) is slightly lower on percentage than Stripe's nonprofit discount (2.2% + $0.30), but PayPal's higher flat fee makes it more expensive on small donations. On a $15 gift, PayPal takes $0.79 and Stripe takes $0.63. Both take far more than Zeffy's $0.
Does PayPal provide tax receipts for nonprofit donations?
No. PayPal sends transaction confirmations, not tax-deductible donation receipts. Your organization has to generate and send receipts separately. Zeffy automatically sends tax receipts with your EIN and deductibility details after every donation, ticket sale, or raffle purchase.
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