Update: as of October 31st, 2023 the PayPal Giving Fund will handle all donation processing on Facebook. You can read more about this update, and the actions your nonprofit needs to take to stay in compliance, on our newest blog post here.
When people start a fundraiser or birthday fundraiser on Facebook, Facebook has two ways of distributing funds to nonprofits that were raised through their charitable giving tool: Directly through Facebook Payments, or indirectly through their partner, Network for Good.
Want to lose money? Don’t register for Facebook Payments.
Nonprofits that aren’t registered with Facebook Payments receive their donations through Network for Good’s Donor Advised Fund (DAF), minus a 3% administrative fee. If a charitable organization is registered with Network for Good, they’ll receive donations collected through Facebook (minus fees) by electronic transfer, about six weeks after the last day of the month in which contributions were made. That means waiting up to 10 weeks for funds to come through.
Want to lose even more money? Don’t register with Network for Good.
A DAF is a complicated charitable savings account that is an interesting-making pool of money. Donors have no say where the funds go; they can only “recommend” a grant be made from the fund to a specific charity.
Because Network for Good uses a DAF to distribute funds, they may send funds to a parent nonprofit if you’re not registered with them. If you are a local Humane Society, the funds may be sent to the Humane Society of the United States, for example. If a nonprofit isn’t registered with Network for Good, they’ll get a check in the mail, which takes even longer.
The fastest way to get paid? Sign up for Facebook Payments.
On the other hand, if a nonprofit signs up for Facebook Payments, they’ll get paid on a bi-weekly basis as long as they’ve reached the minimum donation payout of $100. Funds are made by direct deposit, and there are no administrative fees.
Though there’s nothing inherently wrong with getting paid through Network for Good, signing up for Facebook Payments means you’ll get 100% of the donations raised. Plus, there’s no risk of an umbrella nonprofit getting the funds instead, and you’ll get funds about two months faster than you would if you didn’t sign up.
Want to learn more? Read or download The Ultimate Guide to Facebook Fundraisers.