# Steep increase in direct debit donation cancellations in 2007-08

- Link: https://fundraising.co.uk/2009/03/10/steep-increase-direct-debit-donation-cancellations-200708/
- Published: 2009-03-10T14:30:38+00:00
- Author: Howard Lake

**The number of donors cancelling their direct debit donations increased substantially
following the collapse of Northern Rock in September 2007, according to analysis
of six years’ worth of direct debit cancellations rates by direct debit specialist
bureau Rapidata Services Plc.**

Monthly cancellation rates, or the percentage of live direct debits that are cancelled
each month, then ‘skyrocketed’ in the summer of 2008 as the UK economy headed towards
recession, and rates are still increasing.

These increases followed four years of gradually reducing cancellation rates from
April 2003.

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Average monthly cancellation rates per year:

2003/04: 3.54%

2004/05: 3.45%

2005/06: 3.18%

2006/07: 3.05%

2007/08: 3.32%

2008/09: 4.64%

The findings are contained Rapidata’s new publication ‘Charity Direct Debit Tracking
Report 2009′ and offer practical, data-based analysis of regular giving, in contrast
to the many surveys that have sought donors’ attitudes to giving in the recession.

Scott Gray, managing director of Rapidata, said: “Cancellations rates skyrocketed
last summer so that, for example, in July, 54% more people cancelled their direct
debits than in the average July for the pre-recession period, while in December,
there were 67% more cancellations than for the average pre-recession December”.

Indeed, for the first time, the financial year 2008/09 saw monthly cancellations
rates exceed five per cent, on four separate occasions – July, September, October
and January.

What can charities do to counter this trend? Rapidata offers some suggestions on
winning back cancelled donors:

• Acknowledge the cancellation quickly, in writing, and thank the donor for their
support

• Offer alternatives to cancellation, such as giving at a lower level or taking 
a payment holiday

• Make sure donors can reactivate easily and securely through the charity’s website

• Attempt reactivation sooner rather than later: try it within six months and don’t
leave it 12 months or more

• Regularly test sample reactivations: for instance, try telephoning a sample of
100 donors who cancelled within six months to test for reactivations.

But Scott Gray adds that reactivation is not the key issue. Instead, fundraisers
need to change their focus from acquiring new donors to looking after and stewarding
the donors they already have.

He said: “The findings in this report point to the trend for more donors to cancel
their direct debits, which will mean increased costs in acquiring new donors to 
replace those you have lost.

“Wouldn’t it be better to spend some of that money in trying to keep your existing
donors? Commercial companies invest heavily on customer retention; charities need
to follow suit”.

A full copy of the report can be obtained from

[Scott Gray](https://www.fundraising.co.uk/mailto:SG***@*********co.uk).

www.rapidataservices.com

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