PayPal Holdings, in a tie-up with National Philanthropic Trust (NPT) and Vanguard Charitable, has announced the launch of Grant Payments, a new product that allows donor-advised fund (DAF) sponsors, community foundations and other grant makers to electronically provide grants to charities through PayPal.

Once the funds are approved by the grantmaker, Grant Payments allows charities to avail the grants.

Through a PayPal dashboard, grantmakers and charities can gain access to the available grant details, such as donor information.

Charities have been vetted based on PayPal’s compliance standards.

PayPal VP of Giving Oktay Dogramaci said: “PayPal is committed to offering safe, secure and seamless products and services that drive efficiency for grantmakers and charities to digitally send and receive grant payments.

 “By partnering with National Philanthropic Trust and Vanguard Charitable, PayPal Grant Payments will enable more than 200,000 PayPal confirmed charities to quickly receive grants electronically, streamlining and simplifying what has historically been a much more manual and drawn-out process.”

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Grants from DAFs to eligible charities totalled an estimated $34.67bn in 2020, accounting for a 27% surge compared with the previous year and was the highest DAF grant increase in ten years.

Last year, Vanguard Charitable sent out $1.78bn, while NPT sent out $6.4bn in grants to charities. These payments were made almost completely by cheques. However, this process can not only be expensive but also slow.

The Covid-19 pandemic accelerated delays in charities getting grant cheques because of disruptions with the postal service as well as the inability of some non-profit organisations to have access to offices to retrieve cheques.

Grant Payments allows both grantmakers and non-profits to save time and resources and focus on meeting their philanthropic efforts.

Vanguard Charitable president Rebecca Moffett said: “We are thrilled to partner with PayPal and NPT to bring modern and effective granting solutions to our donors and non-profit partners alike.

“Charities today need sustainable donor support more than ever. By streamlining the granting process, donors can make an even greater – and faster – impact on meaningful cause areas. We look forward to continuing to bring innovative solutions to the granting space, ensuring that we’re always working to increase philanthropy and maximize its impact over time.”

National Philanthropic Trust CEO Eileen Heisman said: “NPT is always interested in innovation and the pandemic amplified the need for non-profits to receive grant dollars more efficiently.

“This solution does that and more. We believe that PayPal-based Grant Payments will simplify and accelerate how grantmakers can get funds to non-profits for mission-critical programs. The partnership with PayPal and Vanguard Charitable on this sector-wide solution could be a game-changer for other funders as well and has been enormously gratifying.”

National Philanthropic Trust will start the launch of Grant Payments this month, while Vanguard Charitable plans to provide the solution next year.

All US charities with a confirmed charity status with PayPal can avail grants through PayPal from its partner grantmakers.

In June, PayPal has introduced a monthly buy now, pay later (BNPL) offering in the US to expand checkout options for consumers.