The total value and volume of Direct Debit donations to charities, together with the average donation value, have all increased in the past year to March 2011, according to Rapidata’s Charity Direct Debit Tracking Report 2011. Regular giving to charities by this method has grown for the third year in a row.
Rapidata, the Bacs approved direct debit processing agency, reports that the volume of Direct Debit donations has increased by 7.8% in the past year to 3.5 million, the total value given by this method is up by 9.8%, and the average gift by Direct Debit has increased by almost £1 to £12.86. The figures cover donations to 117 charities.
Direct Debit donation cancellations have also dropped to 3.32%, the lowest figure since 2007. The cancellation cycle throughout the year 2010/11 (up to and including March 2011) also closely followed the pre-recession pattern of cancellations, so it would seem that the high level of cancellations in 2008/09 has run its course.
Online regular giving has increased considerably, up by 36%. The average online regular gift is £8.09, and 83% of online donors make a Gift Aid declaration, making the total average gift worth £11.39.
Children’s charities have enjoyed the highest increase in average regular donations, from £13.11 to £15.01. Healthcare and medical research charities received the second biggest increase.
The report points out that charities could be raising more from Direct Debit gifts, since many are losing income unnecessarily by failing to record efficiently and manage unpaid Direct Debits. Too many charities treat unpaid Direct Debits as cancellations. Rapidata points out however that the majority of unpaid Direct Debits are due to ‘insufficient funds’ and 62.5% of Direct Debits returned as Refer to Payer were paid when re-presented the following month.
Scott Gray, Managing Director of Rapidata Services Plc, said: “The new statistics are truly encouraging but should not be taken lightly; it’s no time to rest on our laurels… The most exciting news is that for the first time we have undeniable proof that re-presenting certain failed Direct Debits prevents unnecessary loss of income, and charities need to be made aware of this.
“It only takes some minor tweaks to the administration process to gain a significant amount of income, reduce attrition figures and the costs of reactivation programmes. For a large charity this could mean thousands of pounds a month.”
Adrian Sargeant, Professor of Fundraising at Bristol Business School and at the Center on Philanthropy, Indiana University-Purdue University Indianapolis, welcomed the benchmarking report, adding: ““We also need to get smarter at recruiting the right donors into our organisations in the first place, taking investment decisions in respect of acquisition that are guided by the return on lifetime value that would accrue and avoiding short-term and potentially misleading measures such as immediate ROI.”
Rapidata’s Charity Direct Debit Tracking Report 2011 will be published today at midday and will be available as a free download from
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