Launched at #IoFFC: Tracking study shows marked impact of GDPR on regular giving
Yesterday at Fundraising Convention, Rapidata Services unveiled the latest regular giving trends with the release of a new report tracking Direct Debits to over 600 charities. We summarise the key findings from the launch event.
Headline findings indicate that GDPR had a ‘major’ impact on Direct Debit donations. Cancellations fell to all-time low during 2018, but the acquisition of new supporters also dropped by almost a third as charities pulled back on donor recruitment campaigns to adjust to the new data protection requirements.
According to Rapidata’s Charity Direct Debit Tracking Report 2019, the 32% fall in acquisition volume from 2017-2018 is attributed to a reduction in ‘traditional’ fundraising activity through channels such as direct mail, telephone and face-to-face. But the 2019 data set indicates strong signs of recovery with high growth (53%) in the acquisition of regular givers during the first quarter of the year.
The report also reflects on the growth of donors signing up to Direct Debit online, with a 55% increase over the past year.
LOWEST CANCELLATION RATES ON RECORD
An increased focus on supporter care and the fall in acquisitions is thought to have prompted the decrease in the proportion of donors cancelling their regular gifts. Cancellations fell steadily from month to month across the first half of 2018, during the build up to and implementation of GDPR.
In May 2018, cancellations dropped below the 2% threshold (at 1.95%), compared with 3.07% in 2017. For the year as a whole, the average charity Direct Debit cancellation rate plummeted to a record low of 2.14%, less than half the level seen ten years ago (4.33% in 2008).
With acquisitions rising in 2019, Rapidata reports a return to the more typical cancellation cycle, albeit at a lower level, with rates of 2.89%, 2.02% and 2.19% for January to March respectively.
Scott Gray, Head of Payments at the Access Group and research lead on Rapidata’s Tracking Report, says: We are now seeing greater emphasis on building engagement and deeper relationships, as well as smarter and more considered use of data. Initial results for 2019 are extremely promising with what looks to be a return to a more typical – but lower – cancellations cycle, as well as a strong increase in acquisition volumes. It seems unlikely we’ll ever again see the high cancellations rates of old.
Direct Debit remains an essential and growing payment method for charities and their supporters. Payments body Bacs reports that over 4.3 billion Direct Debits are being processed annually in the UK, with charities receiving 108 million donations in this way in 2018.
Daniel Fluskey, the Institute of Fundraising’s Head of Policy & External Affairs, says:
The insights into regular giving that Rapidata provides are of immense value and there is much to take on board from this year’s findings. The impact of GDPR meant 2018 was undoubtedly an unusual – and challenging – year for fundraising. However, the findings from this year’s research, especially the new lower levels of cancellations we’re seeing in 2019, show that the hard work put in by charities to improve their supporter relationships is now starting to pay off.
NEW 'NO SHOW' BENCHMARK
Recommending that charities aim to keep average annual cancellations beneath the sector benchmark of 3%, Rapidata also introduced a ‘no show’ benchmark of 11.5%, encouraging charities to review the proportion of Direct Debit donors who fail to make their first payment.
Rapidata’s Charity Direct Debit Tracking Report 2019 is available as a FREE download from 1st July, or in hard copy from the Access Rapidata Stand no.33 at IoF National Fundraising Convention.