You do make a good point. In the past this was not an issue as probably 1000's of people currently have donation buttons on their web sites and blogs and they are not nonprofits, just individuals. Seems now, there's new tax laws to deal with, accounts must be verified, etc.
As stated by PayPal.
"This button is intended for fundraising. If you are not raising money for a cause, please choose another option. Nonprofits must verify their status to withdraw donations they receive. Users that are not verified nonprofits must demonstrate how their donations will be used, once they raise more than $10,000."
So. what's work a around for another option. One option is to use a Buy Now item button. You can code it so an amount can be entered right on the PayPal Screen. You can also use the the Shipping Overrides so as not to charge any shipping if you have a shipping method setup for other purposes. Using a Buy Now type button allows people to give you funds without having a PayPal Account. Note, you would still pay the transaction processing fees same as would for selling any item and you have to have either a Premier or Business Account, a Personal Account won't work.
Another option would be to have people use the send money feature. Of course they would have to have a PayPal Account and if they send the funds as a gift assuming they don't use a credit card, there would be no fees.
Below are two examples of how to use a Buy Now item button. One is a text link and the other is an HTML Form. Both should give you a few coding ideas.
<!DOCTYPE html>
<html lang="en">
<head>
<meta charset="utf-8">
<meta name="description" content="">
<meta name="keywords" content="">
<title></title>
</head>
<body>
<!-- Start Buy Now Text Link Form -->
<a href=
"https://www.paypal.com/cgi-bin/webscr?cmd=_xclick&business=your email address&item_name=Widget Game Support&item_number=WGS-1001&amount&no_shipping=1&on0=Donation&os0=Game Server &return=http://www.yourwebsite.com/ThankYou.html&cancel_return=http://www.yourwebsite/Cancel.html&shipping=0..." &target="paypal">Donate - Support our Game Server</a>
<!-- End Buy Now Text Link Form -->
<br><br><br><br>
<hr align="left" width="40%" noshade>
<br><br><br><br>
<!-- Start of Buy Now Form -->
Donate - Support our Game Server
<br><br>
<form target="paypal" action="https://www.paypal.com/cgi-bin/webscr" method="post">
<!-- If using a Business or Company Logo Graphic, include the "cpp_header_image" variable in your View Cart code. -->
<input type="hidden" name="cpp_header_image" value="https://yourwebsite.com/logo.jpg">
<input type="hidden" name="cmd" value="_xclick">
<!-- Replace "business" value with your PayPal Email Address or Account ID -->
<input type="hidden" name="business" value="your email address">
<!-- -->
<input type="hidden" name="item_name" value="Widget Game Support">
<input type="hidden" name="item_number" value="WGS-1001">
<input type="hidden" name="on0" value="Donation">
<input type="hidden" name="os0" value="Game Server">
<!-- Allows you to enter Amount on Checkout Screen -->
<input type="hidden" name="amount">
<!-- -->
<input type="hidden" name="no_shipping" value="1">
<input type="hidden" name="shipping" value="0.00">
<input type="hidden" name="tax" value="0.00">
<!-- Replace value with the web page you want the customer to return to after a successful transaction -->
<input type="hidden" name="return" value="http://www.yourwebsite.com/ThankYou.html">
<!-- Replace value with the web page you want the customer to return to after item cancellation -->
<input type="hidden" name="cancel_return" value="http://www.yourwebsite.com/Cancel.html">
<input type="hidden" name="currency_code" value="USD">
<input type="hidden" name="lc" value="US">
<input type="hidden" name="button_subtype" value="products">
<input type="hidden" name="bn" value="PP-DonationsBF:btn_donateCC_LG.gif:NonHosted">
<input type="image" src="https://www.paypalobjects.com/en_US/i/btn/btn_donateCC_LG.gif" border="0" name="submit" alt="PayPal - The safer, easier way to pay online!">
<img alt="" border="0" src="https://www.paypalobjects.com/en_US/i/scr/pixel.gif" width="1" height="1">
</form>
<!-- End of Buy Now Form -->
<br><br><br><br>
<hr align="left" width="40%" noshade>
<br><br>
NOTES:
<br>
In order to test the code, you must replace the "business" value variable with your PayPal Email Address or Account ID.
</body>
</html>
