If you don't have a paypal account yet,.. you can get a Free Paypal account here.
so,let's see how to put a Paypal donation button in your blog...
1.First,Log in to your Paypal account.
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2.Click on the 'Merchant Services' tab (see at the top of the page).
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3.Scroll down the window and you will see an option "Donations" in the right sidebar.Click on it!
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4.Now,you will see some options like Donation name/service ,donation id,etc etc...
The first field (Donation name/service) is the only thing that is required and all the remaining fields are optional.
Enter that first field,choose a button style,scroll down the window and click on "Create a button Now"

5.Now,you will see some html code... Copy it and sign in to your blogger dashboard »» Click on the layout »» Add a Page element »» html/javascript »» and paste that html code and SAVE THE CHANGES.
Here is how the button will look in your sidebar