Confused about the new Mastercard regulations?
4 Key takeaways

You’ve likely heard about the new Mastercard regulations on recurring charitable donations, and you may be unsure about how they’ll affect your organization.

As a company that’s in the business of helping charities and non-profits solve administrative and strategic problems, we know the last thing you need in the current climate is more uncertainty. So, we’ve pulled together a 101 on what the Mastercard changes will mean for non-profits.

First, some good news: you have time to figure things out and/or secure expert help in navigating the regulations. On September 2, 2022, Mastercard extended the policy’s effective date for all non-profits from September 22, 2022 to March 21, 2023.

To lay the groundwork, let’s start by reviewing the basics of the new regulations. They’re all about subscription billing, which translates to monthly donations in our non-profit world. When they come into effect, the regulations will require all charities to:

Clearly state the donation terms (essentially the amount and frequency) at the first point of Mastercard payment, and secure positive confirmation of those terms in a separate email.
EXAMPLE: “You will be charged CA $30 per month until you cancel the monthly donation”

Send an email receipt every time a donor makes a recurring donation using Mastercard.
EXAMPLE: “You have been charged CA $30 today for your monthly donation”

Send an email prior to processing any recurring donation using Mastercard that has a 6 month or 1 year frequency.
EXAMPLE: “You will be charged CA $30 on (your monthly day of processing example October 1) for your recurring donation”

Include clear instructions for canceling the recurring donation with each receipt.
EXAMPLE: “To manage or cancel your monthly donation, click here”

We understand how critical recurring donations are to charities’ success and stability. If you’re concerned that the monthly donation receipt emails may lead to increased gift cancellations, you’re not alone.

Leaders in the non-profit industry are using Mastercard’s extension to continue advocating for potential exemptions from the new regulations. In the meantime, however, there are practical things you can do to prepare for the changes and mitigate the risk to your organization. Here are the top four things your organization needs to know:

1. You can time your compliance with the effective date of the regulations.

If you need to take the next six months to assess the impact of the upcoming changes, either internally or with an external partner, it’s perfectly within the rules. You just have to be ready to fully comply on March 21, 2023.

2. You only have to provide monthly receipts to donors who have provided their emails.

The regulations don’t apply to any legacy donors you might have who have only ever provided their mailing addresses.

3. You can add a customized thank you to the monthly email receipts.

Adding a tailored thank you to the monthly receipt – and maybe even updating the message each month – is a creative, compliant way to preserve a positive donor experience.

4. You can offer donors the choice of opting out of the monthly receipts.

Your donors may be happy to have one fewer email land in their inboxes every month, and you can give them this option.

The prospect of additional regulations in an already complex environment isn’t welcome news for any non-profit or charity. But if you take a proactive, strategic approach, you can keep your monthly donors happy, maintain reliable funding and still comply with the new rules.