Recurring donations for NPOs: set up monthly giving that lasts

Monthly giving is the most valuable income stream for most non-profits because it's predictable and donors tend to stay for years. To set it up well in South Africa, offer a simple online form where donors choose an amount and pay by debit order or card, thank them immediately, issue Section 18A receipts correctly if you're approved, report to SARS through the IT3(d) process, and look after donors so they don't cancel when times are tight.

Payment options for recurring donations

For a comparison of the methods, see EFT vs debit order vs card.

Designing a monthly giving sign-up

• Suggested amounts (for example R100, R250, R500) plus a custom amount.
• Clear impact statements: "R250 a month provides ...", written honestly.
• Choice of debit date, especially for debit orders.
• Details needed for 18A receipts (name, address, tax reference or ID for individuals, as required).
• Consent for communications, separate from the donation itself (POPIA direct marketing rules apply).
• A mobile-friendly form, since most donors sign up on their phones.

For debit orders, use a proper electronic mandate signed by the account holder rather than a tick-box. See the mandate checklist.

Section 18A receipts

If your organisation is approved under section 18A of the Income Tax Act, donors can claim a deduction (within limits) for qualifying donations, but only with a valid section 18A receipt. SARS's requirements, updated through Public Notice 3082 with effect from 1 March 2023, include details of the organisation, the donor, the donation amount and nature, the date(s) of receipt and a certification that the donation will be used for qualifying activities.

For monthly donors, many organisations issue one receipt per donation, or a consolidated receipt covering a period, as long as it meets SARS's requirements including the breakdown of individual donations and their dates. Check the current requirements on SARS's Section 18A and IT3(d) page.

IT3(d) third-party reporting

Section 18A-approved organisations must submit IT3(d) data to SARS disclosing the 18A receipts they've issued. SARS describes a bi-annual submission due by 31 October (for 1 March to 31 August) and an annual submission due by 31 May (for the full year of assessment). That means your donor records must be accurate and complete:

• Every receipt must link to a donor record with the required identifiers.
• Donation amounts and dates on receipts must match what you actually received.
• Reversed or disputed donations must be handled correctly (a reversed debit order is not a donation).

Plan the data you capture at sign-up around these requirements.

Handling failed and reversed donations

• Unpaid debit orders: send a gentle message, not a demand. A donor who had no funds this month may be embarrassed. Offer to change the date or amount. See unpaid debit order reason codes.
• Disputes: EFT debit orders can be disputed within 60 days. Don't issue 18A receipts for amounts that were reversed, and contact the donor to understand why.
• Expired cards: ask donors to update their card through a secure link.

Keeping donors giving

Retention is where monthly giving programmes win or lose:

• Thank immediately after sign-up, and again after the first donation.
• Report impact regularly, with specific stories and numbers you can verify.
• Offer a pause or a lower amount instead of cancellation when donors face hardship.
• Recognisable statement name so donors don't dispute a debit they don't recognise.
• Annual summary with total giving and their 18A receipt(s).

Reports for NPO finance teams

• Active monthly donors and monthly recurring donation income.
• New donors, cancellations and pauses per month.
• Failed and reversed donations.
• 18A receipts issued, by period, reconciled to donations received.
• Income by campaign and payment method.

Privacy and trust

Donor data includes names, contact details, ID or tax numbers and bank details. Limit access, secure mandates and card data (using tokenisation, never storing card numbers yourself), and respect communication preferences. See our colleagues' guide to POPIA payment data compliance.

How CentraPoint helps

CentraPoint lets NPOs create monthly giving plans and hosted donation pages where donors choose an amount and pay by Netcash debit order (with online mandate signing) or by card through gateways such as PayFast, Paystack or Peach. Once-off appeals can use payment links. Each donor has a record with their full giving history, failed donations trigger follow-up emails you can word gently, and reports and the report builder show donors, income and failures by period, giving your 18A receipting and IT3(d) processes accurate data to work from. See subscriptions in the docs or contact us.

Frequently asked questions

What is the best way to collect monthly donations in South Africa?

Debit orders are the most cost-effective for donors with South African bank accounts, and card on file works well for online and international donors. Many NPOs offer both.

Do monthly donors need a Section 18A receipt for each donation?

The receipt must meet SARS's requirements, including a breakdown of individual donations and their dates. Some organisations issue a receipt per donation and others a consolidated receipt for a period; confirm your approach against SARS's current rules.

What is IT3(d) reporting?

It's the third-party data submission in which Section 18A-approved organisations report the donation receipts they've issued to SARS, bi-annually and annually.

Should we issue an 18A receipt for a donation that was reversed?

No. If a debit order is disputed and reversed, the organisation did not receive the donation, so it shouldn't be receipted, and any receipt already issued needs to be corrected.