Process to set up PayPal donations for a nonprofit:

Business Procedure Overview:

Create a PayPal business account:

Select “nonprofit” as the business type;

Provide contact, banking, and other information including Federal Tax ID.

Technical Procedure Overview:

Log into the PayPal business account

Click on the Merchant Services tab

Click on the Donations link

Specify the name, amount (optional; if you leave amount blank, your donor will be asked to choose a donation amount), and other details of the donation

Add more optional information such as a customized button graphic and the ability to include a note with the donation

Click Create Button Now and the Button Factory will generate HTML code.

Paste the HTML code on your website to create your Donate button.

When a buyer clicks the Donate button, he will be taken to a secure PayPal payment page, where he can log in to an existing PayPal account or sign up for a new one, and quickly complete the transaction.

Sources:

Info from PayPal on how to set up a PayPal account for non-profits: https://www.paypal.com/us/webapps/mpp/donations

Info on setting up a PayPal account to receive donations from WikiHow: http://www.wikihow.com/Set-up-a-Paypal-Account-to-Receive-Donations