Meta & PayPal: A New Era of Fee-Free Charity Support
The digital landscape is evolving rapidly, with significant players like Meta (formerly Facebook) and PayPal constantly seeking innovative ways to connect users and charitable causes. A recent development has seen the two tech giants join forces to facilitate charitable giving on social media platforms. While this partnership offers new opportunities for nonprofits, it also comes with significant changes that charities must adapt to.
Meta’s Decision to Stop Covering Payment Processing Fees for Charities
One of the critical changes in this partnership is Meta’s decision to cease covering payment processing fees for charities fundraising through its platforms, including Instagram and Facebook. This alteration, which will take effect from November onwards, marks a substantial shift in how donations are handled.
Previously, Meta absorbed the third-party processing fees, ensuring that charities received the total amount of each donation. However, moving forward, Meta will partner with PayPal Giving Fund (PPGF), which will charge a processing fee of 30p per donation plus 1.4%. To address this, donors will have the option to increase their donation amount to cover these fees.
Charity sector consultant Zoe Amar expressed disappointment in Meta’s decision, especially given the challenges many charities face due to the cost-of-living crisis. Amar emphasised the importance of charities diversifying their income sources to reduce dependency on social media platforms for fundraising.
The Meta and PayPal Giving Fund Partnership
On a positive note, the partnership between Meta and PayPal Giving Fund opens up new avenues for charitable giving. Starting on October 31, 2023, charities in the U.S., U.K., Australia, and Canada will be able to receive donations through Facebook and Instagram with the assistance of PPGF. This move aligns with PayPal Giving Fund’s mission to support charities by enabling them to benefit from new forms of giving.
Charities will continue to raise money through fundraisers and donation buttons on social media platforms, with donations being processed by PPGF and granted to benefiting charities following its policies. PPGF also plans to provide detailed donation activity reports to enrolled charities and issue donation receipts to donors.
The collaboration between Meta and PPGF aims to streamline the donation process, allowing charities to receive donations more quickly and gain additional exposure to millions of potential donors through the PayPal website and app and other PayPal Giving Fund partners.
The Impact on Charities
Charities need to be aware of several fundamental changes and deadlines resulting from this partnership:
1. Accepting Updated Charitable Donation Terms: To maintain eligibility for Facebook fundraising, nonprofits must review and accept Meta’s updated Charitable Donation Terms by October 31, 2023. Failure to do so could result in losing access to Facebook Giving Tools.
2. Switching to PayPal Giving Fund: Charities should transition to PPGF for donation processing before the October 31, 2023, deadline to avoid disruptions in fundraising operations.
3. Payout Timelines: For nonprofits that switch to PPGF, the fund will distribute funds within 15-45 days for enrolled nonprofits and within 90 days for unenrolled ones. Meta Payments will still process donations made before September 15 and recurring contributions.
4. Transaction Reports and Donation Receipts: PPGF will provide detailed donation activity reports and official donation receipts for tax purposes, while Meta will offer limited transaction reports and confirmations of donations.
5. Fundraisers and Donate Buttons: The handling of donations made to fundraisers and donate buttons will differ depending on whether they were created before or after the switch to PPGF.
The Role of PayPal Giving Fund (PPGF)
PPGF is a registered charitable organisation that collaborates with PayPal, eBay, Meta, and other technology platforms to facilitate online philanthropic giving. Users can select from a list of registered charities to donate to, receive tax receipts, and benefit from transparency and ease of use.
PPGF will play a crucial role in this partnership, handling donation processing, providing reports, and ensuring charities receive the funds they need to continue their vital work.
In conclusion, the collaboration between Meta and PayPal Giving Fund offers new opportunities for charities to raise funds and connect with donors on social media platforms. However, charities must be proactive in adapting to the changes, ensuring compliance with updated terms, and understanding the implications of the partnership. By embracing these changes, nonprofits can continue their mission of positively impacting the world through online charitable giving.
