Alternative recipient &1 not characterized in table TE016

What causes this issue?

You have attempted to select a customer payment for an alternate
recipient (charity organization, stock savings plan). However, the
alternate recipient that you specified (business partner &v1&) is not
allocated to a category in Table TE016.

System Response

The system cannot continue processing.

How to fix this error?

Maintain the category for the business partner.

Error message extract from SAP system. Copyright SAP SE.