On August 30th Meta announced a new partnership with Paypal to cover the donation processing of Facebook Fundraisers (additional help article). This isn’t just a backend shift, nonprofits will need to agree to new terms and now acknowledge that donation processing fees will be now be deducted. Since it’s launch in 2016, this program has raised over $5 billion.
Key Info about the change to PayPal Giving Fund
- Meta will no longer cover donation processing fees after October 31. Donations will be subject to a fee charged by the payment processor.
- Effective October 31, 2023, Meta will partner exclusively with PayPal Giving Fund (PPGF) to support donations benefiting nonprofits in the US, UK, Canada and Australia.
- Meta will no longer support donations through Meta Payments or Network for Good after October 31.
- Nonprofits must review and accept updated Charitable Donation Terms and switch to PPGF before October 31 to avoid losing access to some fundraising tools.
- After October 31, PPGF will receive and grant donated funds to nonprofits according to their policies and timelines.
- Meta will provide limited transaction reports but no longer issue tax documentation. PPGF will provide donation reports and receipts.
- New recurring donations and campaigns will not be supported after September 15, 2023. Existing ones will be paid out through October 31.
- Payment of funds will move from a max of 45 days to 90 days with PPGF.
Just tell me what Nonprofits need to do
- Nonprofits should take required actions ASAP to avoid disruptions to fundraising. Review emails from Meta and Help Center for full details.
- Update any ads. Nonprofits are currently able to run On-Facebook Donation Ads. Ads that are set up before a nonprofit switches to PPGF will stop delivering on October 31, 2023. Once nonprofits switch to PPGF, they should set up new On-Facebook Donation Ads to avoid disruption.
Why this change to Paypal matters for nonprofits
- The value proposition of getting fees covered while not getting full donor information may change the reason to push this vector of giving.
- Switching payment processors could cause disruptions to donation revenue if not handled properly before the October 31 deadline. Nonprofits rely on this funding.
- The loss of recurring donations and tax documentation from Meta could impact donor relationships and retention. Nonprofits will need to find ways to minimize this.
- Processing fees will now come out of donations, decreasing the net amount nonprofits receive. They may need to adjust fundraising messaging and goals.
- Changes to reporting mean nonprofits will have less insight into Meta donation data and metrics. This could impact decision-making.
- With a new provider handling donations, nonprofits will need to get familiar with different systems, policies, and timelines to ensure smooth operations.
In summary, these are major changes to how donations are handled on Meta’s platforms. Nonprofits will need to quickly adapt to avoid disruptions to their critical fundraising pipelines and donor relationships. The impact could be quite significant if not managed properly.