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Implementing Mastercard’s New Sustainer Rules

You’ve probably heard that Mastercard is changing its standards for Subscription/Recurring Payments—monthly sustainers in our world, and the lifeblood of so many organizations.  

These new standards have caused much confusion among nonprofits and their processing platforms—especially Mastercard’s definition of a “subscription,” so Mastercard recently informed The Nonprofit Alliance (TNPA) that the standards won’t take effect until March 21, 2023. This extension gives nonprofits the chance to make the necessary changes in our programs to reach compliance, without having to focus on this at our busiest time of the year. 

Mastercard also backed off on its most costly and time-consuming new rule for nonprofits—that each monthly gift must be acknowledged, even for donors who haven’t shared their email addresses. Now the acknowledgments are only required for sustainers with an email address on file. 

While implementing these new standards will take some time and diligence, we see this as a terrific opportunity to ramp up sustainer stewardship, and more fully engage with our monthly donors through the increased mandatory contacts and transparency.  

a terrific opportunity to ramp up sustainer stewardship, and more fully engage with our monthly donors

Some of the key requirements are probably already part of our stewardship, and the rest represent best practices that will enhance the sustainer’s experience, which can only be a good thing. Let’s review some of Mastercard’s “must do” directives. Going forward, we must: 

  • Send a confirmation email at the time of enrollment that outlines how the sustaining giving will work—e.g., when the donor’s credit card will be charged every month, how much will be charged, as well as instructions on how the donor can cancel at any time.  
  • Email a receipt after every sustainer gift is charged, that also includes instructions for how to cancel the sustaining membership. 
  • Provide an easy cancellation method (similar to unsubscribing from emails), but this can also be a donor services number if your systems don’t have DYI giving management capabilities (or they aren’t setup yet). 
  • Collect email addresses from anyone making a recurring gift. This should already be a required field online, but if you are actively recruiting sustainers offline, think about creative ways to drive email address collection—and make sure these emails get recorded with this gift! 
    • You can even encourage prospective sustainers to scan a QR code and make their gift online instead! 
  • For sustainers who are charged less frequently than every six months, send a notification at least seven days before the credit card is charged, reiterating the terms of the sustaining membership and how to cancel.  

Mastercard’s goal with these requirements is to reduce the number of chargebacks and disputed charges that the company has been seeing. While chargebacks and disputes aren’t rampant throughout the nonprofit industry, some bad actor organizations have taken advantage of sustaining donors and misled them about the terms of their recurring gifts. 

The most egregious and unethical example was the Trump campaign’s fine-print, pre-checked opt-in for WEEKLY sustaining gifts. Of course, outraged donors cried fraud and credit card companies had a real mess on their hands issuing $122 million in refunds, while the campaign used the money for its last-ditch media blitz pre-Election Day in 2020. Made us all look bad.  

Writing in Non-Profit Pro, Erica Waasdorp sees these new requirements as undue burdens on nonprofits, and encourages us to support a letter to Mastercard asking for nonprofits to be exempted from these new rules.  

She believes that the requirements might make sustaining gifts less about a philanthropic relationship with a nonprofit, and more about the transaction. While recognizing that some of Waasdorp’s points have merit, we can definitely see the benefits of these kinds of donor contact becoming industry standards.  

Some guidelines for implementing Mastercard’s changes:  

  • No matter how our sustainers make their recurring gifts (e.g., offline, ACH, Visa, Discover, Mastercard, etc.), put these changes into practice across the board, since they truly are best practices in terms of sustainer stewardship. And increased contact is a win-win.  
  • Review all recurring gift confirmation language to ensure that we are aligned with the information necessary to be in compliance with these rules. 
  • Make sure that there is a clear and easy way for sustainers to cancel their commitment. Provide a direct line to donor services and a simple form linked in all sustainer related emails—that active sustainers can fill out to cancel. Of course, both require staff time to speak to donors, and to reconcile form submissions with active/canceled sustaining gifts in a timely manner, but both are a good interim step while a more robust donor portal is being deployed.  
  • Create a recurring monthly gift receipt—ideally an automatic one—for all sustainers by setting up an autoresponder that will contact the sustainer every time their recurring gift is processed. Staff or your agency-partner (like us) will have to audit active donation forms and enable this setting on each form, as well as setup standards for all new forms.  
  • For sustainers without an email address, try to collect email addresses whenever possible. Review your assets. Are you asking for email on your reply? How about on the acknowledgment for the initial gift? You are also do special outreach to active sustainers to collect emails, and/or conduct an eAppend, which is a data append specifically designed to add emails to postal records.  
    • SMS is another great way to send receipts! And collect emails, so if you have cell phones on file, this is another great touchpoint to add into your sustainer stewardship program! 

Remember, Mastercard’s deadline to get this all implemented is March 21, 2023, and as much as we all love a good deadline in fundraising, don’t let it sneak up on you, spring will be here before we know it, LOL. 

At CCAH, we’re looking on this as a great opportunity to really button up our sustainer programs with improved systems to keep these loyal donors informed, and allow them to opt out—but still think positively of our clients’ organizations—by making it easy—and we’d be happy to help you too! So, reach out, if you are interested in talking to our digital and systems specialists about how you can come into compliance before the deadline.

Mastercard’s deadline to get this all implemented is March 21, 2023

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