4 things schools should know about processing recurring donations

shutterstock_367136834There are a lot of reasons for schools to prioritize recurring donations from their alumni. They can help produce stability and create new opportunities for advancement impact.

If recurring donations are a goal for your institution in the year ahead, there are some things to know that you may not have considered:

Recurring donations require additional security measures

If your cause is already processing single gifts online, you’re likely aware of some of the required security steps. The PCI (payment card industry) standards help ensure that proper steps are taken by your payment processor to handle credit card information with no risk to alumni.

With recurring gifts, you must be able to charge the card every month without exposing its information. This, naturally, adds some complexity. You will need to ensure that the payment gateway you work with is equipped to handle this requirement.

The receipting process is different too

With single gifts, receipting needs are straightforward. When a donor submits a gift and their credit card is successfully charged, you must provide them a tax-compliant receipt promptly. Here too, things are different with recurring donations.

Depending on your region, you may be required to send a consolidated receipt at the beginning of each year for the previous year’s gifts. This should reference the date and amount of each donation throughout the year. Even in cases where this isn’t required, it is often preferred by your donor to simplify their record keeping.

Plan for expiring credit cards

A clear benefit to recurring donations is that they provide stable, monthly revenue to your organization. They also maintain your relationship with a donor indefinitely. This can be challenged, though, by credit card expiration dates.

An important part of any recurring gift initiative is to create a plan for handling expiring credit cards. Some payment gateways are better equipped at handling them than others, so be sure to do your research. Also, think about what you will do when a payment is declined because the card has expired. Who will reach out to the donor? Will you be able to update their gift with the new card details?

Read More: Learn all about the best practices for long-term donor retention

Think about your acknowledgments

When a single donation is made, the best practice is to provide a thank you note by email or physical mail in a timely manner. With recurring gifts, you have more options.

It is still best practice to send a quick acknowledgment of each new payment to avoid surprises on a credit card bill. Whether it should be a one-line email or a longer ‘thank you’ can be dependent on the voice of your organization and other goals. In some cases, you may worry that a lengthy email each month can be a burden on your supporters. In other cases, though, getting a monthly update on progress may help them feel appreciated.


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