Be Cautious When You Transition to a Different Sustainer Processor

There is an important new trend I’m seeing where nonprofits have to or want to transition from one recurring donor processor to another. And I’ve heard horror stories about the number of sustainers a nonprofit can lose if the organization doesn’t do it right. 

The transition can be from one donor database, or constituent relationship management (CRM) platform, that’s charging the payments, or it can be from one payment platform to another. Sometimes it’s a combination of the two.

Nonprofits have been left scrambling when payment platforms, like GoFundMe Charity, have shut down within months of announcing their closure. Other nonprofits have been charged lots of money to transition their credit card information when the new donor database is unable to even accept them. 

While a transition is not the end of the world for one-time gifts, as you’ve already recorded these gifts and the payments have happened, it can be disastrous for recurring gifts. I’ve heard statistics like 20 to 30% of sustainers drop after a nonprofit transitions. Sometimes that means thousands of sustainers are lost.

That is a lot of money, considering that the average monthly gift is $25. Losing 100 recurring donors means losing $30,000 a year! So, when you think you must transition, take your time to do your research and ask the important questions: 

• Will your new provider help with the transition or are you on your own? 
• Can your new system import the information? 
• Can all of this be done automatically, or do you have to go in and manually set up the recurring gift information?

Here are eight more important tips to remember when you decide to transition your donor database and/or payment platform.

1. Know Your Donation Data Is Yours 

This includes information about recurring gifts (or “subscriptions,” as some payment platforms call them), such as credit/debit card information, payment dates, amounts and frequencies.

The reason why I’m making this point is that your current payment platform or donor database must cooperate in transitioning this information to another processor. Does this always happen? Not necessarily. That’s why I’m still surprised how some processors claim that no contracts are needed. That’s not a good situation if you ask me. Again, for one-time gifts, this is not as important, but, with recurring gifts, this is crucial. Otherwise, what’s your recourse?

You have no agreement with the payment processor, yet you’re asking the donor to make that agreement online or offline as a recurring donor. In essence, the donor trusts you with their information and trusts that you’ll charge their card, process their payment through PayPal or deduct their recurring gift from their bank account to help your mission for as long as they’d like you to do this.

2. Do the Right Thing With Your Donors’ Data 

Donors don’t want to worry about how you’re handling their payments. They want their payment data to be secure and their recurring gifts to be charged when you say they will. They assume that you’re doing the right thing. 

3. Be Aware How Your Sustainer Gifts Are Processed

Map out the sources of your recurring donors. For example, PayPal may or may not be an option in the new platform. You may still have some sustainers giving from a prior platform. Who does what, when and how?

4. Be Absolutely Sure That You Must Transition 

I see way too many charities that get excited about a new platform because it has a cool dashboard and hipper forms than what they have now. Think long and hard before you make the move. Sometimes you don’t have a choice because your donor database may not be supported any longer or you might really need to move to a cheaper solution.

5. Give Yourself Time to Transition Recurring Gifts

Make sure you don’t get caught having to rush into moving to a new platform when you won’t have time to check and recheck everything. Don’t assume things without doing the research. If you can have two systems side-by-side temporarily, that’s ideal and ensures the smallest number of lost sustainers due to a transition. 

Just because a processor has a long track record, doesn’t mean everything or anything is automated or seamless. Be prepared for some surprises during the process.

Case in point: I recently worked with a nonprofit transitioning its data from one processor into another. The importing of the credit card information went well and was done quickly, but then the nonprofit had to manually go into the new platform to set up the recurring gift amounts, frequencies and upcoming payment dates. The organization also then had to remap those gifts to feed into its donor database.

The new platform does not update recurring gift information. Also, PayPal gifts were handled in the previous platform but cannot go through the new platform, so a separate process had to be developed to update all PayPal recurring gifts in the nonprofit’s donor database. Fortunately, this organization didn’t have that many recurring gifts in the old processor and there was time to do everything.

6. Allow Time to Ask Current Donors to Opt into a New Donation Form 

If you must do this, try to do this as soon as you have your new system up and running and processes in place. But don’t give up too soon.

It may take multiple emails, phone calls and letters. Try to offer this move to the donors as a way to help you do more with their gifts, so you can support more animals, clients, children and mission. This approach will result in the smallest number of lost sustainers. And if your new system allows for electronic bank transfer, try to have your recurring donors switch to that option so it will benefit retention in the long run.

7. Have Recurring Donor Retention Processes

Now may also be a good time to reach out to donors whose cards had expired but you didn’t notice. What do you have to lose by doing a reactivation campaign by having them opt into your new system? Follow up with those donors whose recurring gift payments stopped or those who are not going through now for some reason. While email is great, it’s not the only way to reach out to recurring donors. Pick up the phone and send a letter as soon as you realize that recurring gifts are not coming in. And never assume that the recurring donor wants to cancel just because their payment didn’t come in.

8. Don’t Make Assumptions When a Payment Is Declined

If you’re transitioning because you worry about payments being declined, tread lightly. It may not be the processor’s fault, and it’s most certainly not the donor’s doing.

A company that’s focused on optimizing the number of payments for subscriptions as well as nonprofit recurring gifts indicated that often decline decisions are made by banks that often “score recurring subscription payments as a risk transaction with an increased chance of fraud. False declines occur when banks score transactions from legitimate cards and customers as fraudulent, which occurs a surprisingly high 24% of the time for recurring payment submissions.” 

I’ve personally seen this happen a number of times myself, where my gifts are not being processed because of a banking issue the organization and donor has no control over. Ultimately, we get it resolved, but only because the nonprofit stays on top of it.

Published originally by NonProfit PRO on September 8, 2022.