Insights Charity

Does your charity own its Direct Debits?

If not, when is it the right time for your charity to start owning them?

Strange question? Are Charity Direct Debits a bit of a mystery to you? If so, you are not alone. In this blog, we’d like to demystify some aspects of Charity Direct Debit management and payment processing in the not-for-profit sector, starting with who actually owns them. And we explore how you can take back some control so that you can optimise your charity payment processing.

Many UK charities set up their Direct Debits via a ‘Facilities Managed’ (FM) account. With this type of account, the payment Bacs Bureau (which your supporters signed up to) will own the Service User Number and not the charity in question.

This FM system for supporter Direct Debit processing is a quick, effective way for some charities to access the power of Direct Debits for their fundraising, memberships, and lotteries. It has also helped many smaller and medium-sized charities offer a Direct Debit facility when they would otherwise not have been approved by their bank to do so.

However, with FM accounts, the lack of ownership of your own SUN does have several drawbacks! Read on to find out more.

How do I know if I have a FM account?

There are 2 different types of FM accounts: firstly, where the Direct Debit is set up using the commercial Payment Service Provider’s name; the other is where the FM-accredited Bacs Bureau will create a Direct Debit Service User Number (SUN) unique to you.

In both cases, your charity does not own the SUN, and money from your supporters gets deposited directly into the Bacs bureau bank account and then paid out to your charity – sometimes with the Direct Debit bureau’s fees deducted.

So, when is the right time to review this?

This will depend on a number of factors, and there is no ‘one size fits all’. The first thing you might want to consider is how important Direct Debits are to your charity as a payment processing method, also how many Direct Debits you process each month.

If the volume is over 200 per month, we suspect it might be worthwhile to have an initial chat with your Bank Manager to see if they would consider allowing your charity to take ownership of its own Service User Number.

Just making this initial enquiry will not impact your current DDs and would at least give you an indication of whether your charity could own its own SUN, with the advantages outlined below.

Why should my charity own its own SUN?
  • Because your charity would own it fully! In practice, this means that you can use any Bacs Approved Bureau or even process in-house. This gives you so much more control and choice.
  • Flexibility – you can easily add collection dates, change Direct Debit guarantee days, and decide what value limits to set for your supporters’ Direct Debits. By contrast, some FM providers place limits on how much you can process.
  • Brand control and brand recognition– your supporters will see your charity’s name and your name only, when signing up. They’ll also see your name again on their Bank statements. This repeated brand exposure reinforces brand recognition and recall, important given that supporters who donate via third-party giving platforms can find it hard to recall the charity’s name because the platform’s name and not the charity’s can be the most dominant and memorable feature.
  • Money – as soon as Direct Debits are taken, they go into your designated charity bank account. No delays – money deposited immediately.
  • Fees – You can negotiate fees with your bank. Fees for Bacs Bureaux to process and manage tend to be reduced when a charity owns its own SUN, this however may depend on the services required so check with your provider.
We think we need our own Direct Debit SUN but it seems complex and time-consuming. Help!?

The upsides of owning your own SUN are clear from the five points above, but it is true that some time and effort will be required initially to navigate the process and set it all up.

If your charity needs some help with setting up its Direct Debits, we can help you make a start

If you’d like to discuss your current setup and understand what options might be available to you, but you don’t know where to start, we can help. Contact us for an initial no-obligation chat. There is no hard sell – just plain and simple advice from non-salespeople who have helped lots of charities navigate this area over the past 20 years! We would love to help you get started and we promise to speak in plain English.

Also, discover more about our Direct Debit management service.

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