Payment processing is a critical element of any fundraising software. If the platform is unable to process payments very well, the nonprofit may not be able to carry out its primary purpose – to raise funds through online donations.
Some nonprofit fundraising software has its own payment processing features, while others use third-party plugins to handle this process.
If you are using classy.org, Paypal processing is how they choose to go about it.
How does Classy.org work with nonprofits for Paypal donations?
Many nonprofits use Paypal to raise money with a personal account through their website. However, managing and keeping track of all the donations received can be a tedious task if there isn’t a staff member specifically assigned to it.
Classy.org offers the facility of being used as an agent for receiving and processing online donations. This means that the nonprofit can assign the task of collecting and remitting online contributions to Classy.org. Any money that is donated to the nonprofit is received by Classy.
These funds are held in a separate account from Classy’s own business funds, and the nonprofit in question remains as the equitable titleholder to the money. The funds are transferred to the nonprofit twice a month: on the first and sixteenth. This money will include all the donations the nonprofit has received up to that point since the last transfer, minus the fees Classy will charge for their services.
Of course, nonprofits also want to know who is donating and details of all the transactions that have occurred. These reports are provided on the Paypal website, detailing the contributions that were received as well as smaller details like the fees applicable to each transaction and any chargebacks that were initiated. There is also an Account Statement Report that summarizes the total amount of money that Classy has to transfer and what fees are payable for the services.
The nonprofit has to bear the responsibility for any chargebacks or refunds that may occur. Since Classy will be handling the account for the nonprofit, the nonprofit has to approve that Classy has the authority to issue refunds and chargebacks on their behalf. Any fees that are incurred as a result are the responsibility of the nonprofit, and Classy requires that the nonprofit keeps reserves in their account to protect against chargebacks, reversals, fees, etc. Any liabilities are to be paid off through other means.
There is other nonprofit fundraising software that allows such services as well. For example, Givingloop also enables you to set up an account on their website and have all the benefits of Paypal without needing a Paypal account. The money you receive through donations will be transferred straight to your bank account.
Salah Hamwi
Sally Nasr