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Rapidata reports monthly direct debit cancellations are slowing to plateau

Rapidata reports monthly direct debit cancellations are slowing to plateau

Figures released today by processing agency Rapidata suggest that the number of donors cancelling monthly direct debits is slowing and stablising. However, it does not look like the cancellation rate will return to pre- levels this year.

The figures are contained within the mid-year update to Rapidata’s Charity Direct Debit Tracking Report 2009, which was released today at the Institute of Fundraising’s National Convention in London.

They show that monthly cancellations rates are now at their lowest level this year.

The original report was published in March 2009 and and showed that since the start of the credit crunch in September 2007 more and more donors were cancelling their direct debits “at an alarming rate”.

For example, in July 2008, 54% more people cancelled their direct debits than in the average July for the pre-recession period (calculated over six years), while in December, there were 67% more cancellations than for the average pre-recession December.

In the financial year 2008/09 monthly cancellations rates exceeded five per cent in July, September, October and January. This contrasted with the average monthly cancellation rate of 3.63% for the entire survey period from April 2003 to January 2009.

Now, direct debit cancellation rates for calendar year 2009 have been falling and are at their lowest levels so far this year.

Also, for the last four months, cancellations have only been about a third higher than for the average corresponding month before the credit crunch/recession, compared to 50%, or more, higher for the peak months during the second half of 2008.

Scott Gray, managing director of Rapidata, said: “People are still cancelling their charity direct debits in significantly higher numbers than they were doing before the onset of the recession in August 2007, but we might be beginning to see a plateauing of cancellations at around 4-4.5%.”

He pointed out that while some people were suffering economic hardship, others were benefiting from lower interest rates, lower mortgage payments, and finding more disposable income in their hands.

Gray referred fundraisers to the recommendations laid out for future planning in the first Rapidata Charity Direct Debit Tracking Report published in March.

He added that the company will be expanding this research for the 2010 edition of the report, “looking at a different subject, probably lifetime value and reactivations”.

Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world's first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp.

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