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Giving on PayPal has bucked the recent downward trends for philanthropy

What can we learn from a platform where giving is up this year, while overall giving is trending downward?

Giving on PayPal has bucked the recent downward trends for philanthropy
[Source Image: Peacefully7/iStock]

In 2018, Americans gave away a total of $428 billion. That may sound like a lot, but it decreased about 2% compared to 2017 levels when adjusted for inflation, driven in large part by a reduction of individual giving. But recent data from PayPal shows the online payment platform has bucked that trend.

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People using PayPal may not be making donations that are quite as large as they have in the past, but they’re making far more of them overall. The smaller gifts are happening often enough to channel more money toward charities—and perhaps offer a lesson for how to help boost giving overall, by making it a more seamless process.

In 2018, more than 55 million people globally used the service to give $9.6 billion to at least 665,000 nonprofits. That’s up from $8.4 billion in 2017, and far more than the $7.3 billion PayPal helped raise in 2016. Globally, users made 115 million individual gifts though the service in 2018. That too is far more than the 95 million from 2017 and 82 million from 2016. The analysis is part of the company’s just-released 2018 Global Impact Report.

Although it didn’t disclose exact numbers, the company reports that ratios for the U.S. are roughly the same as in the wider world. The total amount per donation recently decreased by 7% here, but the frequency of gifts rose 8%—more than making up for the difference.

[Source Image: Peacefully7/iStock]
Experts have speculated last year’s tumultuous stock market, combined with tax code changes that doubled the standard deduction without a need to itemize charitable contributions, has led to less middle-class giving. That may be true for the average gift size for PayPal givers, but the company’s data shows that those in the lowest income brackets still tend to give a higher proportional share of their net income, something that’s fairly common across the giving world.

PayPal has several ways that it encourages online giving. Those include providing charities with online “Donate” buttons for websites and emails and PayPal Here, which let fundraisers collect in-person contributions via smartphone or tablet. It even has its own giving fund to allow users to direct money seamlessly to the charities of their choice. In May 2019, the company enabled a new service for Airbnb hosts to share a portion of what they make on rentals with organizations that support temporary housing for those in need.

The average American currently uses the service a little more than twice per year, with an average gift of about $84. PayPal’s data shows that women traditionally give more often than men. The states with the most generous people on average were Maryland followed by Alaska, Washington, California, and Massachusetts. The company saw significantly more interactions occur through its mobile services, which were up 24% year-over-year.

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About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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