How do I provide a button for donations, where the user can enter the amount of donation. I am already set up with PayPal on my form.
You will not be able to add a button to achieve this. You could add a Number or Currency field and then set this field as a payment field. In Options/Collect Payment, select 'Purchase Fields' subtab, select the Number or Currency field in the 'Purchase Field' drop down, and in 'Price' set it to User Input.
For more information on how to set your fields as payment fields please check this FAQ: http://forums.adobe.com/docs/DOC-1632