Rapidata releases Charity Direct Debit Tracking Report 2017 revealing status of regular giving

Rapidata releases Charity Direct Debit Tracking Report 2017 revealing status of regular giving

3 July 2017

Regular giving and Direct Debit specialist Rapidata, released its Charity Direct Debit Tracking Report 2017 at the Institute of Fundraising’s Fundraising Convention in London on 3rd July. The report presents a positive return to more usual regular giving levels in 2017, following an anomalous year of fundraising activity for 2016, post the fundraising crisis of 2015.

  • 2016 saw lowest annual Direct Debit cancellation rate on record at 2.61%
  • post 2015 crisis, 2016 shows as ‘year of adjustment’ in regular giving fundraising
  • Proposed new industry standard for charities – Cancellation Average Benchmark 3%
  • First analysis of online regular giving via charity websites

 

Figures show that the average annual cancellation rate for 2016 was 2.61%, the lowest since Rapidata’s records began in 2003, with further record monthly lows in April (the lowest monthly cancellation rate ever, at 2%) and July (2.48%).  2016 deviates from the typical annual Cancellation Cycle and, coupled with such unusually low cancellation figures, is described within the report as an ‘adjustment year’ post the 2015 fundraising crisis.

Scott Gray, CEO of Rapidata, explains, “during the difficulties of 2015/16 we saw many charities carrying out less fundraising activity; anecdotal evidence tells us many were holding back while seeking clarity around changes in best practice and regulation before adjusting their fundraising practices. Fundraising reforms are now being felt and our sense is that the sector is starting to feel more confident and stable, with fundraising activity being re-energised.” 

Rapidata’s figures for the first quarter of 2017 indicate a slight rise and return to the more usual annual Cancellation Cycle pattern, with rates returning to and continuing the positive long-term downward trend seen in recent years.  Quarter 1 data for 2017 shows similar levels to 2015, with a 2.86% cancellation rate in January 2017, close to 2015 and 2014 rates of 2.95% and 2.82% respectively. 

In a first for the sector, Rapidata introduces a recommended charity ‘industry standard’ for monthly Direct Debit cancellation rates, the Cancellation Average Benchmark (CAB),set at 3%. It is hoped that this benchmark will encourage charities to actively monitor cancellations and their regular giving donor experiences, aiming to stay below an average monthly rate of 3%.

 

Peter Lewis, Chief Executive of the Institute of Fundraising, says: The health of Direct Debits and knowing what is happening in this part of our sector is vital. In broad terms, I welcome the idea of the sector-wide cancellation benchmark proposed in this report that charities should aim to stay below. I look forward to the discussions around this and encourage others to join these on how this might be taken forward.”  

Scott Gray explains, “the 3% CAB is a new benchmark based on over fourteen years of Direct Debit analytics and twenty years of supporting regular giving fundraising. We’re recommending the CAB is set at 3% as an achievable rate for most charities. I recognise that there cannot be an exact one-size-fits all and every charity is different but as an average benchmark I hope the CAB will encourage organisations to give greater focus to their regular giving programmes. It’s about improving and maintaining average monthly cancellation rates and continually questioning how to adapt and improve the donor experience and stewardship. I hope this will encourage the sector to engage and explore this concept further, while giving fundraisers a tangible marker with which to grow their regular giving programmes with positivity.” 

For the first time, this year’s Tracking Report also looks at online regular giving through charities’ own websites, via Rapidata’s eDirectDebit service.  The data from this subset shows a 7% annual growth in the number of donors signing-up to a Direct Debit online. While sign-ups to regular donations via desktop computer remain 24% higher in value, at an average £13.75 compared to £10.49 by mobile phone, more donors are choosing to give by mobile and the gap between the two is closing. Also, online sign-ups show a staggering Gift Aid take up of 94%. 

Sharing his views on the report, Tim Hunter, Director of Fundraising at Oxfam, says: “I recognise that 2016 was a very different year and for many charities a year of uncertainty and change with some fundraising activity much reduced. But long-term, the trend of cancellations is down and that must be worth celebrating. It shows that supporters are more loyal to the charities they give to than headlines might suggest but we can't be complacent and we all need to work hard to keep inspiring supporters with the stories and evidence of the difference they are making.” 

Adds Scott Gray of Rapidata, said: “Our Tracking Report for 2017 is one of the most extensive we’ve produced and unveils unique insights that should be useful for all charities building on their regular giving programmes. Uncertainty following the fundraising crisis led to a wide-spread loss of confidence within the sector but we appear to be gaining a more positive footing. While it may be concerning to see an increase in cancellation rates for 2017, any figures which indicate a return to a sense of normality can only be welcomed as a good thing as it shows that charities’ confidence in their activity with both new and existing donors is returning.”

 

Rapidata’s Charity Direct Debit Tracking Report 2017 is available as a FREE download from Monday 3rd July 2017.

For further information or interviews with Scott Gray, please contact: Jenny Turner, 07940 472 653 / jenny@turnerpr.co.uk