For this experiment, I decided that I would sign up for a PayPal account and give people the option to donate to this blog.
PayPal experiences vary by country, so what I am describing may not be exactly identical to what you will find.
Which Type of PayPal Account To Choose?
When I signed up, my first dilemma was determining which type of account to choose from. PayPal offers three different account types: Personal, Premier and Business. I couldn't find anything that clearly outlines the differences between each account type.
I did find out enough information to let me make my decision.
Personal accounts aren't able to accept credit cards and I wanted to be able to offer the convenience and security of donating by credit card, so the Personal account was ruled out.
Business accounts are geared more towards organizations that require a Paypal account. This seemed to be more than I needed.
That left the Premier account type, and this is what I signed up for.
Hooking Up PayPal To My Bank Account
After creating my PayPal account, the first thing I did was to link it up to my bank account. This was easy to do, and I actually made 63 cents doing it! When you link up your bank account, PayPal will make two small deposits to your account as part of the account verification process. They deposited 22 cents followed by 41 cents. 2241 became the code that I used to confirm to PayPal that the account was mine.
Creating My Donate Button
The next step was to create a button to include on the website. PayPal has a wizard for doing this which was extremely easy to use. Here is the donation button that I created. You can also see it in the right hand panel of this blog.
Fees
I was impressed to see that if I wanted to transfer funds from my bank account to another person within my country that there should be fees involved. So if somebody donates $1 to me from their bank account or their PayPal account, I would get the full dollar.
If somebody donates from their credit card, PayPal takes a small percentage and they also charge a transaction fee. The fee works out to be approximately 30 cents plus 3% of the transaction amount.
So for $100 dontation, PayPal would take something like $3.30 leaving you with $96.70.
For a $1 donation, PayPal would take 33 cents, leaving you with 67 cents.
I started to wonder...
What would happen if someone made a 10 cent donation via credit card? Would PayPal take the remaining 20 cents from my bank account?
I had visions of thousands of people donating 10 cents and draining my bank account.
I looked into ways to enforce a minimum donation. This definitely seems possible with Javascript and PHP validation.
That seemed a bit difficult for this experiment, so instead I did a test. I donated 10 cents to myself through my credit card. I found that PayPal informs me of the donation, but they don't actually put any money into my account for it. The good news is that they don't take any money out either!!
How Much Do I Expect To "Raise"
To be honest, I don't expect that my donate button will contribute much to the total earnings of this blog - of course it is completely within your power to prove me wrong :)
Time will tell, and as the total money earned in my scoreboard increases, I'll provide a detailed breakdown of all the sources.
At the time I'm writing this post, the scoreboard shows a whopping $5 earned. 63 cents of that is from linking PayPal to my bank account. The balance is money earned from Google AdSense.
If you're a non-profit with a cause people want to contribute to, this is a handy mechanism to allow it. Certainly donations do work for some organizations.
Before PayPal suspended Wikileak's account, it had accumulated over $700,000 in donations.
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| Julian Assange - Founder of WikiLeaks |
Here's a cautionary quote I came across "avoid adding PayPal donation widgets on your website if it’s new or is not popular in its niche as that will only show your greediness for money".
Hmmm, I wonder if a 14 day old blog counts as "new"?
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