Why do my PayPal donations show up as goods/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.