PayPal launches a new crowdsourced fundraising platform, the Generosity Network

PayPal is expanding its fundraising efforts with today’s launch of the Generosity Network. Unlike the PayPal Giving Fund, which helps people support charities through online donations, the new Generosity Network lets people raise money for themselves, other individuals in need, or organizations like a small business or a charity. This puts the network more directly in competition with other crowdsourced fundraising platforms, like GoFundMe or Facebook Fundraisers, for example.

At launch, the Generosity Network will be open to PayPal customers in the U.S. only and will allow them to create fundraising campaigns of up to $20,000 over a 30-day period.

The company says it was motivated to create the new service after seeing the growth in the peer-to-peer fundraising market following the coronavirus outbreak. It also noted the pandemic has made it difficult for traditional charitable organizations to raise as they had before. More than half of charities in the U.S. now expect to raise less money than in 2019 as a result of the economic hardships driven by the pandemic, PayPal said, citing a survey (PDF) by the Association of Fundraising Professionals.

In addition, over 65 million Americans filed for unemployment at some point over the course of the pandemic, PayPal says, which often led to them turning to family, friends and their community for extra support.

This isn’t the first product PayPal has developed that focused on social fundraisers. A few years ago, it launched Money Pools, which would let friends and family donate towards a shared expense — like a surprise party, group gift, travel fund, and more. The Generosity Network is an expansion on that earlier effort.

The new Generosity Network fundraisers can be created directly from PayPal’s website and donations are deposited directly into the organizer’s account for them to distribute as needed. The campaigns are also more broadly shared on the Generosity Network platform, which allows them to reach millions of more people than the organizer may have been able to reach through their own posts and shares across social media and the web.

Already, PayPal users are raising funds for disaster relief, funeral expenses, medical expenses, community efforts, and other organizations.

Like other fundraising platforms, PayPal’s Generosity Network will include fees. But, at launch, the website says it’s waiving those fees for donations made through credit and debit cards for a limited time. Cross-border fees and currency conversions fees will still apply, however.

For comparison, Facebook doesn’t charge fees for donations to charitable organizations, but does for personal fundraisers. (In the U.S., it’s 2.60% + $0.30). GoFundMe’s U.S. transaction fees are $2.9% + $0.30.

We’ve asked PayPal to disclose its fees schedule for the new platform, but the company said it can’t provide details until early 2021.

The website offers no information about fees, in fact — its FAQ even links to the Money Pools FAQ, which seems to imply this Generosity Network is not yet a fully-fleshed out product. In addition, customers who navigate to the Money Pools platform in the PayPal app and on web are now given the option to create a Generosity Network campaign instead.

PayPal is likely hoping to acquire users during the increased fundraising that generally occurs over the holiday season, and believes that a platform that waives fees will give it an edge against the established competition.

The company does not appear to be involving itself heavily in the vetting process. Instead, it said that in addition to its Acceptable Use Policy, it has also introduced Generosity Network Campaign Content Standards, which are found in the Generosity Network Terms. However, these are guidelines about what customers must agree to in order to use the services, including agreeing to send PayPal information or documentation, if asked. They don’t detail proactive vetting procedures.

“From collecting money for grocery deliveries to high-risk populations to fundraising campaigns in support of teachers and frontline workers, we’ve seen an outpouring of generosity from the PayPal community using our platform to help one another during this unprecedented year,” said PayPal VP of Giving, Oktay Dogramaci, in a statement. “The Generosity Network was designed to provide an accessible, easy and secure way for our customers to raise money on behalf of causes, and connect them with millions of PayPal customers who can offer their support this holiday season and beyond,” he said.