If you were along for the confusing Mastercard ride as it evolved last fall, you know that nonprofits got a bit of a scare thinking they were going to be subject to extensive rules around monthly subscriptions.
To skip to the punch line, there was a lot of behind-the-scenes lobbying and the requirement was not extended to nonprofits.
CharityEngine was part of the behind-the-scenes lobbying on behalf of our clients, and we immersed ourselves in these regulations, the rationale behind them, and the overall benefit to consumers.
And we’ve been counseling our clients that it makes a lot of sense to comply with the regulations, if you can, to benefit your donors.
A Summary of the Rules
By spring of 2023, Mastercard began enforcing a requirement that states that consumers who pay for monthly subscriptions using a Mastercard credit card must be sent receipts each month that include simple and clear ways the consumer can cancel the subscription.
The worry for nonprofits was that the sending of receipts would place an undue burden on often-overburdened staff. And, we argued, monthly donations are not subject to rules governing traditional e-commerce transactions.
Mastercard clarified their position and agreed that nonprofits are exempt from sending receipts to every monthly donor.
But (you knew this was coming) it’s not a bad idea to comply anyway. Why?
Why Monthly Receipts Are a Good Idea
The donor experience is key to your nonprofit’s success. When your donors feel appreciated, invested in your mission, and part of your wider family, the chances of them withdrawing their support are diminished...and the chances of them jumping in and volunteering or increasing their donations go up.
We believe that the essence of these regulations can greatly enhance the donor experience.
Let’s look at six big benefits of your nonprofit offering monthly receipts and easy unsubscribing:
- Transparency. Mastercard implemented this requirement because they were losing a lot of money. Consumers would forget they signed up for a subscription, or it was difficult for the consumers to cancel. Either way, they were disputing charges, and Mastercard was paying the financial price. Transparency builds trust, and while nonprofits tend to do well with this, implementing regular communications around monthly gifts will enhance that trust.
- Convenience. When you’re saying to your donors, “Hey, here’s how you can easily change your gift or even cancel support,” you’re demonstrating goodwill and showing your donors you care about improving their experience, even if it doesn't benefit you.
- Stewardship: If you’re contacting your donors monthly and wrapping it in gratitude for their donation, you’re nurturing them.
- Data hygiene: If your CRM offers a donor portal, it’s a great tool to keep your data clean. As donors update their gifts and/or information, you ensure all data – not just an email address – is current.
- Promotion: We said that monthly communications are a great avenue for nurturing, but they’re also good for announcing improvements to your donor portal or upcoming campaigns. The impetus for the communication might be a receipt, but you can wrap a lot of benefits into monthly outreach.
- Future-proof: Mastercard has thrown down a gauntlet with these recommendations, and nonprofit inclusion was carefully considered. If you think your nonprofit could ever be affected by this or another regulation, it’s better to get started now and stay ahead of the curve, particularly when there are so many additional benefits.
Should Your Nonprofit Send Monthly Receipts?
Yes, unless there are a few circumstances:
- You’re not going to use it to improve your donor experience.
- If your CRM and/or payment processor doesn’t make monthly receipting easy.
- You don’t have the bandwidth or technology to implement a positive process.
In those cases, consider monthly receipting and/or communications to be goals for the future. As a more general rule for now or a goal for the future, anything that improves your donor experience is well worth serious consideration.
It’s important to note, though, that you must implement receipting thoughtfully and for the benefit of your donors. If you have a platform of disparate systems, this might not be possible, and it might behoove you to wait for a mandate.
And, just to throw all our cards on the table, we’ve got a completely unique nonprofit CRM with an advanced donor portal. And industry-leading payment processing. So if your CRM vendor can’t accommodate your requests or you’re just interested in seeing what we’ve got under the hood, just book a demo, and we’ll be happy to show you!