How Nonprofits Can Accept Recurring Donations with PayPal

Donations are the lifeline of nonprofits. They keep their mission going. And while one-time donations are valuable, recurring donations are even more significant. They derive consistent value for the nonprofit, help it reach its goals faster, and makes its operations more sustainable.

PayPal is the number one choice of nonprofits when it comes to donations. We’ll come to the ‘why’ later. But can PayPal also be used to process recurring donations? With SubscriptionFlow, the answer is yes.

By turning donors into committed members, nonprofits can definitely benefit from their generosity—repeatedly. Let’s find out how SubscriptionFlow helps them do that.

Why are Recurring Donations Important?

Recurring donations for nonprofits provide the opportunity to stay connected with their donors. They are more valuable than one-time donations due to the strong and consistent cash flows they create. One-time donations, on the other hand, are unpredictable and spontaneous.

If nonprofits focus on retaining their donors, they can build long-lasting relationships with them. The best way to do that is by offering membership. Encouraging donors to become permanent members makes things easy for both the donors and the organizations.

By becoming members, donors can easily make donations every month without having to search for the nonprofit again. Nonprofits, meanwhile, can reduce the marketing effort required to chase one-time donations adequate to reach their goals. They can receive a steady flow of donations from their members every month.

In this way, recurring donations make fundraising more convenient, and predictable. Plus, nonprofits can encourage their members to gradually increase their donation amounts, and participate in urgent one-time fundraising events too.

Why PayPal is a Great Candidate for Recurring Donations?

There’s a number of reasons why nonprofits prefer accepting donations through PayPal:

• Global accessibility

PayPal is used in over 200 countries. Because of its international reach, nonprofits prefer to offer it as the primary payment option to customers. It is typical for nonprofits to accept funds from around the globe—without geographical restrictions. That’s because they can onboard donors from anywhere as long as they resonate with their mission.

PayPal is already widely available. So instead of setting up a bunch of payment methods targeting different regions, sometimes offering PayPal only suffices.

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• Multiple currency support

PayPal supports 25 currencies, allowing customers to donate in their local one. This makes their donation experience more user-friendly and transparent, and prevents the element of surprise that comes with currency conversion.

• Donor convenience

Customers can store multiple payment methods in their PayPal account. For example, their bank accounts for direct transfers, credit and debit cards, PayPal balance, etc. They can simply select one payment method out of all as their preferred one. After that, they can easily make each donation using the selected method, without having to re-authorize.

• High security

PayPal protects customers’ billing information through its data encryption feature. In case of recurring donations, it requires the donor to enter their billing details once, and enter into the recurring payment agreement. After that it enables automatic payment processing, and also ensures that the merchant cannot access the customer’s actual payment data.

• Integration with subscription billing platform

To reap most of PayPal’s benefits, nonprofits need to have a reliable billing platform. PayPal integrates with billing software like SubscriptionFlow. So PayPal is already available in this software as a payment option, and can easily be offered to customers at checkout.

Organizations don’t have to worry about working on their PayPal setup themselves. They can simply sign up with SubscriptionFlow, and get a ready-made integration. This allows them to start accepting recurring donations with PayPal with minimal effort.

Limitations of Native PayPal Setup for Recurring Donations

Let’s now come to why nonprofits need an adept billing system to manage recurring donations. It’s because PayPal primarily acts as a payment processor. It can be offered to donors as a payment option, and donations can be accepted through it.

But to make recurring donations automated, determine payment cycles, retry failed payments, and much more…a billing software is needed in place. This is how using only PayPal falls short for recurring donations:

• PayPal mainly supports monthly donations

The donate button on PayPal’s native checkout page only supports monthly donations. While PayPal does offer quarterly and annual payment cycles, it does that through its subscribe button. Donors cannot be asked to subscribe to choose a cycle other than the monthly, because that doesn’t seem very professional, and relevant to charity.

• There are very limited branding tools

PayPal’s checkout is mostly generic, and doesn’t offer many branding tools. This means that your donors are taken from your vibrant website to a plain looking PayPal payment page. This can be visually disrupting, and may dilute the donors’ trust as well.

• Donors cannot be segmented

PayPal offers no dashboard where donors can be segmented into different groups based on their donation or membership level. This can be bad for nonprofits needing segmentation tools to personalize outreach for each donor group. Having different donor segments is important to give out personalized offers, loyalty rewards, and so on.

• Donors have to be engaged manually

PayPal is a payment processor, not a donor management system. So it cannot be used to communicate with donors, such as through automated messages. This means that nonprofits have to send donation confirmation messages, donation receipts, thank you emails, donation reminders, etc. manually. 

• Self-service for donors is very limited

If nonprofits rely on native PayPal setup for recurring donations, their donors get limited self-service options only. And a donor can only access these options from within their PayPal account, not the nonprofit’s website. This can make the self-service experience feel disconnected.

• Only basic reporting available

Nonprofits miss out on their key performance insights. PayPal only offers them basic reports, such as when a customer made a donation, and how much they donated. They also struggle with tracking their donors’ activity across campaigns. And also the changes donors make using their PayPal portal, including cancellations.

How SubscriptionFlow Enables Elegant Recurring Donations with PayPal

SubscriptionFlow combines its donor management and advanced billing features with PayPal’s global payment processing capabilities. Together, the two make your recurring donation operations frictionless and donor-friendly.

This is what nonprofits get by using PayPal with SubscriptionFlow:

• Smart donor management

SubscriptionFlow provides you with advanced management features, that include donor segmentation. Donors can be segmented by their donation amount level, and other custom labels. Nonprofits can store all their donor data in a secure database, and view each donor’s comprehensive profile on the dashboard.

• Custom donation cycles

Donation cycles don’t have to be monthly only. Nonprofits can set up custom cycles and encourage bi-monthly, quarterly on annual donations as well. Donors can choose any cycle of their liking and start donating. The software collects their donations via PayPal automatically whenever their cycles renew.

• Automated communication

There’s no need to send separate messages to each donor manually. Nonprofits get to automate communication. For example, they can send thank you emails, and donation receipts automatically, and instantly. Moreover, they can customize messages according to different donor segments too.

• Deeply customizable checkout page

To give the most visually appealing and branded donation experiences, nonprofits can use SubscriptionFlow’s customizable checkout. It can be fully re-branded to suit the nonprofit’s appeal and campaign themes.

Moreover, nonprofits can also implement multi-step checkout forms that are popular in the donations niche.

• Native checkout support

If nonprofits already have their own checkout pages in place, there’s no need for implementing an external checkout. Because native payment pages are embedded, provide smoother checkout transition, and are designed to align best with the organization.

SubscriptionFlow can easily integrate with the native payment pages too, to fetch donor data from there. It stores this data, and sets up the donors’ billing cycles automatically.

• Payment retry logic

PayPal and SubscriptionFlow make a powerful duo to combat payment failure. Suppose you have a customer making recurring donations using PayPal. But due to the shortage of funds or card expiration, their due donation fails.

In this case, you can rely on SubscriptionFlow to make multiple payment retries. These retries are supported by PayPal too, and are charged to the customer’s preferred method in PayPal. If they fail, then PayPal automatically charges a backup payment method stored in it to make the next retry successful.

This ensures that the donation reaches your account without unnecessary delays, and that the donor remains retained.

• Donor engagement tracking and advanced reports

Nonprofits can track their donors’ activity, such as their overall donation performance, event participation, account changes, churn, and so on. They are also able to view advanced reports to track metrics such as total recurring revenue at any given time, donor lifetime value, etc.

• Advanced self-service options

Your donors can make changes to their donation amounts, change donation tiers, change payment method, view past receipts, and do much more via their self-service portals. These portals are hosted by SubscriptionFlow, and can be customized to match your brand.

If donors feel like making any changes to their account, they can simply head to your website, and access their service portals from there.

If you want to accept recurring donations with PayPal in the smoothest way possible—consider signing up with SubscriptionFlow. PayPal’s global acceptance paired with SubscriptionFlow’s automation takes your fundraising campaigns to the next level.