Regular giving cancellations are falling, but how can we keep them that way?
At Fundraising Convention yesterday Rapidata unveiled its new Charity Direct Debit Tracking Report. Scott Gray, research lead for the programme behind the report, looks at what can be done to evolve the donor experience to ensure regular giving cancellations continue to fall.
2018 was an interesting year for fundraising, and the record lows in Direct Debit cancellations and the drop in regular giving acquisition released in this year’s Charity Direct Debit Tracking Report are certainly attention grabbing. The annual Direct Debit cancellations rate fell to an all-time low of 2.14% (compared to 4.33% a decade ago) and far less regular donors were recruited last year with volume dropping by almost a third (32%) from the year before.
Why was this? Think back to this time last year and the uncertainty in the months leading up to it; our headlines and discussions were dominated by GDPR and what charities must do to adapt and comply. Many charities pulled back on their fundraising activity, postponed or and changed the type of campaigns they were running. With fewer charities asking for funds, donor recruitment dropped, and so too did cancellations as they are so closely aligned. It’s clear that the lows were a result of less fundraising activity as charities focused resources on GDPR’s May implementation date and getting their houses in order before testing the water in the months to follow.
After a period of adjustment though, the first quarter figures for 2019 are very encouraging, indicating that regular giving is on the rise again and that we are now returning to a more typical cycle of cancellations – albeit at a lower level than previous years.
Positive impact of GDPR
Cancellation rates remain low, and this is surely indicative of the way fundraising has changed in the wake of GDPR and the wider regulatory reforms over the last few years. The public is no longer receiving the quantity of fundraising materials that they were, data is of a higher quality due to the new rules about its sourcing and use, and stewardship and supporter care is being given a much greater focus.
The sector has evolved, and it seems unlikely we will ever return to the high cancellation rates seen a decade ago, when massive volume campaigns were the norm. Despite some peaks and troughs over the years – the economic recession of 2008/09, the fundraising crisis 2015/16, and the impact of GDPR in 2018 – cancellations have shown a continual and gradual reduction since we began tracking in 2003.
Evolving regular giving
But there is still work to be done, so now is the time to look at what we can do to evolve regular giving to build stronger and more long-lasting supporter relationships.
While we talk a lot about engagement in this sector, building real two-way relationships that engender long-term loyalty is critical. Engagement with the cause and a charity’s work has always been important, but people now expect more from their relationships with charities and the different ways of supporting them. And that includes the way they make their donation payments when they commit to supporting on a regular basis.
So, when it comes to Direct Debits this means that we need to offer regular donors greater levels of flexibility and choice for their payment journey. Whether they reach the point of sign-up via a direct mail pack or social media campaign, it’s about making the payment mechanism meet their needs by putting more control into their hands around when and how much they give. This could mean, for example, enabling them to choose collections dates that suit their needs, or to be able to increase or indeed reduce their donation value, as well as to skip a payment or take payment holidays when times are tough.
Flexibility & choice
When we surveyed 2,000 members of the public in our 2018 research, The Changing Face of Payments, four in ten respondents had cancelled a Direct Debit payment in the past in order to reduce their monthly outgoings. How many of those might not have cancelled if they had been given other options?
Importantly, the large majority (74%) also felt they should be able to fully control their Direct Debit payments every month by adjusting the date or changing individual payment levels, as they can with our Control My Payment platform. Ultimately, if we don’t offer supporters options that suit them, there is the very real risk that they will go elsewhere. Offering more flexibility with supporters’ monthly donations could significantly improve their experience and cut down cancellations and donor attrition rates.
The early results from 2019 support the picture that charity fundraising has settled into a new normal, with a greater focus on quality and donor-centricity. The impact of this being the rise in acquisition and retention levels.
But, looking back over the years, we can see how major events can and do impact regular giving trends, as well as supporters’ responses to individual campaigns of course. This makes it all the more important that charities monitor and benchmark cancellations, identifying any anomalies (particularly those where cancellations exceed our recommended Cancellations Average Benchmark (CAB) of 3%) and adjusting their communication and fundraising activity in response.
Rapidata has now been tracking regular giving trends for 15 years. For a closer look at the long-term trend line, at what happened last year during the implementation of GDPR and a first look at 2019, our latest Charity Direct Debit Tracking Report and its analysis and recommendations is now available as a free download. We hope you will find it useful.
Scott Gray is Head of Payments at the Access Group and research lead for Rapidata’s Charity Direct Debit Tracking programme.