Why are donations made using PayPal classified as goods or services?
PayPal's API only permits entry of transactions as purchases.
Historically, there have been two ways to allow people to make donations through PayPal; either sending them to PayPal's on-site donation flow, which entails a great number of clicks, logins, and places to lose conversion, or using their up-to-date API to write transactions in as purchases.
We chose to build our PayPal payments around the API-based option where PayPal's interface is only exposed for the approval of the payment, as it secures you more donations and higher donations compared to the redirect-to-PayPal method.
Moreover, once you have a volume of PayPal donations through us, PayPal will stop prompting you to act upon any "purchases", and will understand that your transactions are donations.