Abstract: Participatory budgeting (PB) is a democratic process where citizens jointly decide on how to allocate public funds to indivisible projects. In this work, we focus on PB processes where citizens may provide additional money to projects they want to see funded. We introduce a formal framework for this kind of PB with donations. Our framework also allows for diversity constraints, meaning that each project belongs to one or more types, and there are lower and upper bounds on the number of projects of the same type that can be funded. We propose three general classes of methods for aggregating the citizens’ preferences in the presence of donations and analyze their axiomatic properties. Furthermore, we investigate the computational complexity of determining the outcome of a PB process with donations and of finding a citizen’s optimal donation strategy.