Important Update: Good news! Nonprofits that maintain low chargeback rates are not required to comply with the new recurring payment rules.
History of this issue:
On September 22, 2022, Mastercard’s new requirements for recurring transactions went into effect. The language in the regulations as they were written, specifically the definition of subscriptions resulting in “delivery of physical products or digital goods” appeared not to include nonprofit recurring donations. However, in August, Mastercard confirmed that they intended for these new rules to apply to nonprofit sustainer donor programs.
On September 2, after actively working on behalf of nonprofits to clarify the new recurring transaction requirements from Mastercard ahead of the September 22 effective date, TNPA had very good news to share, that Mastercard “will be extending the effective date of these requirements for nonprofits until March 21, 2023.” This extension is an acknowledgement that the new requirements as written caused considerable confusion among nonprofits and their processing platform partners, delaying steps toward compliance. While TNPA recognized this as a significant step in the right direction, we continued our work building a coalition of US and international umbrella groups to clarify with Mastercard the details of compliance, and assess the impact of the new processes on nonprofit organizations.
Now, we are very happy to learn that Mastercard is exempting nonprofits and charities from this rule, and will follow up only with those who have excessive chargebacks for 4 consecutive months. You can read the new regulations here.
Thank you to everyone who has participated with us in this process, providing data, making connections, and signing onto the letter to Mastercard (below). Together, with our members, our allies, and our coalition partners, we made the voice of nonprofit sector clear, and Mastercard listened. Thank you to all.
Community Letter to Mastercard
Thank you to the 215 nonprofit organizations that signed onto this letter to Mastercard, helping to ensure that nonprofit voices were heard.
To whom it may concern:
We write to you today to express concern about the new Mastercard regulations related to recurring transactions. We would like to meet with you to discuss in detail the impact these regulations would have on the work of nonprofit organizations across the United States if applied to our recurring charitable donations.
It is nonprofit organizations that the world relies on to feed the hungry, house the homeless, care for the sick, save animals both domestic and wild, support communities in crisis, protect the environment, promote human rights, and lead the charge on achieving diversity, equity, and inclusion across our society.
We rely on donations from generous individuals to make our work possible. Recurring donations are a crucial part of that support. Required compliance with Mastercard’s new recurring transaction regulations would create an undeserved operational and financial impact on our work.
We understand Mastercard’s intention with the new regulations is to mitigate negative practices associated with the utilization of a subscription billing model and/or a negative billing option. Our research across a broad swath of nonprofit organizations shows that nonprofit donations do not result in substantial chargebacks. These regulations, if applicable, could put an undue burden on nonprofits and would not move the needle on Mastercard’s goal of reducing chargebacks.
Right now, after two years of the Covid-19 pandemic, increased calls for racial and social equity, and an unusual number of natural disasters wreaking havoc in our country, nonprofit organizations are facing pressure to not only maintain, but also to increase, our missions’ reach and impact.
At the same time, we are facing daunting external pressures that make it ever more challenging to achieve our missions. Facing staffing shortages, supply chain issues, a looming recession that will impact financial support from donors, and the current financial and socioeconomic climate, our industry is already under programmatic and operational pressure.
We hope that you will agree to meet with a representative group of us to better understand how nonprofits use recurring donations in our fundraising, our commitments to ethical fundraising, the impact these regulations would have on nonprofits, and the research that we have gathered.
Together, we can forge a path forward that supports Mastercard’s intention to protect the consumer and reduce chargebacks AND avoid additional undue stress on our charitable organizations.
|Advocate Charitable Foundation
|American Cancer Society
|American Children’s Home
|American Federation for Aging Research
|American Lung Association
|American Red Cross
|Animal Humane Society
|Animal Outreach of Shelby County
|Animal Rescue League of Iowa, Inc.
|Animals Asia Foundation USA
|Arizona’s Children Association
|Arkansas PBS Foundation
|Beaver County Humane Society
|Best Friends Animal Society
|B’nai Shalom Synagogue dba B’nai Shalom Day School
|Boys & Girls Clubs of Greater Salt Lake
|Boys & Girls Clubs of South Alabama
|Boys & Girls Clubs of Wichita Falls
|Cal Farley’s Boys Ranch
|Calumet College of St. Joseph
|Champion Ministries dba Groundwire
|Chattanooga Area Food Bank
|Chautauqua County Humane Society
|Cherokee Home for Children
|Children’s Hospital Foundation
|Church of Our Saviour
|Cleveland Zoological Society
|Coal Creek Meals on Wheels
|Coastal Arts League
|Community College System of NH
|Community Volunteers in Medicine
|Conservation Voters New Mexico
|Cooperative for Education
|Creation Ministries International
|Cristo Rey San Jose
|Cure Alzheimer’s Fund
|Dakin Humane Society
|Defenders of Wildlife
|Diocese of Charleston-Stewardship office
|Doctors Without Borders/Médecins Sans Frontières
|Dogs for Better Lives
|Ellie’s Rainy Day Fund
|Esquires Music Foundation
|Family Services of Northeast Wisconsin
|Feeding America Riverside and San Bernardino Count
|First Step, Inc.
|Florida Springs Council
|Food Finders Food Bank Inc.
|Fort Bend Seniors Meals on Wheels
|Fort Wayne Children’s Zoo
|Friends of the Public Garden
|Georgia Public Broadcasting
|Glen Ellyn Children’s Resource Center
|Global Outreach International
|Golden Gate National Parks Conservancy
|Gospel for Asia
|Guardian Angel Basset Rescue, Inc
|Habitat for Humanity International
|Hepatitis B Foundation, Baruch S. Blumberg Institu
|High Country News
|Holbrook Indian School
|Holy Family Passionist Retreat Center
|Horses for a Change
|Humane Society of Charlotte
|Humane Society of the Pikes Peak Region
|InstaBeacon Arts & Consulting
|International Crane Foundation, Inc.
|Iowa FFA Foundation
|Iowa Humane Alliance
|KENW PBS New Mexico
|LeSEA Global Feed The Hungry
|Lindsay Family Foundation
|Lubbock Meals on Wheels
|Make-A-Wish Foundation of Wisconsin
|Meals For The Elderly
|Meals on Wheels Association of Texas
|Meals on Wheels Central Texas
|Meals on Wheels Metro Boise
|Meals on Wheels Metro Tulsa
|Meals on Wheels of Alameda County (MOWAC)
|Meals on Wheels of Albuquerque
|Meals on Wheels of Boulder
|Meals on Wheels of Syracuse
|Meals on Wheels of Syracuse, NY Inc.
|Meals on Wheels of Texoma
|Meals on Wheels of Wake County
|Meals on Wheels Spokane
|Meals on Wheels West
|Meals on Wheels Western South Dakota
|Mennonite Central Committee
|Metro Meals on Wheels
|Miami Valley Women’s Center
|Mission of Mercy Arizona
|Mount Carmel High School
|Napa Valley Child Advocacy Network Inc aka Parents
|National Association to Prevent Blindness
|National Shrine of St. Jude
|Northeast Animal Shelter
|NYS Council of Trout Unlimited
|One Hope United
|Options Pregnancy Resource Center
|Oshman Family JCC
|People for the Ethical Treatment of Animals
|Pink Ribbon Girls Inc
|Planned Parenthood Federation of America
|Pride Center San Antonio
|Radio Training Network
|Rappahannock Area YMCA, INC.
|Reading Is Fundamental, Inc.
|Regions Hospital Foundation
|Rescue Ministries of Mid-Michigan
|Saratoga Springs Preservation Foundation
|Save the Children
|Sea Shepherd Conservation Society
|Second Chance Pet Adoptions
|Second Harvest Food Bank of Central Florida
|Second Harvest Food Bank Santa Cruz County
|Semper Fi & America’s Fund
|Senior Citizens Activity Center of BUrkburnett
|Shady Hill School
|Share Our Strength
|Sheboygan County Interfaith Organization
|Sisters of Charity of New York
|Sisters of Providence
|SLO Food Bank
|Smithsonian Institution, NMAI
|Social Advocates for Youth
|SOS Children’s Villages USA
|South Dakota Public Broadcasting
|Southeast Missouri Food Bank
|Southside Girls Club of Wichita Falls Texas
|SSND Educational Center
|St Labre Indian School
|St. Gabriel Catholic Radio
|St. Gabriel Radio, Inc.
|St. John’s Preparatory School
|St. Louis University High School
|State University of NY College at Brockport, Inc.
|Support Our Aging Religious, Inc.
|Tails Humane Society
|Temple of Joy SOPPFM
|Texas Tech Public Media
|The ALS Association
|The Arc – Jefferson, Clear Creek & Gilpin Counties
|The Arrow Fund
|The Health Trust
|The Nature Conservancy
|The Public’s Radio
|ThinkTV and CET Public Television Stations
|Tupelo Children’s Mansion
|Unitarian Universalist Association
|United Way of Pierce County
|United Way Quad Cities
|University of New Haven
|University of Northwestern – St. Paul
|Vermont Law School
|Washington Trafficking Prevention
|Water For People
|WFUV Public Radio
|Wichita Adult Literacy Council
|Wildlife Conservation Network
|Wisconsin Council of Churches
|Wolf Trap Foundation for the Performing Arts
|Women’s Lunch Place
|World Animal Protection
|World Evangelical Alliance
|WVPE Public Radio