Direct debit specialists Rapidata Services plc report that the cancellation rate for direct debit regular donations to its charity clients in August was 4.58%, the highest figure for that month since it began tracking regular giving trends eight years ago in 2003. The figure is worse than the 4.4% that was recorded in August 2008 as the recession bit.
Scott Gray, Managing Director at Rapidata Services Plc, was alarmed by the finding. He said: “I am deeply concerned to see charity Direct Debit cancellations increasing again to recession levels and higher. I wouldn’t be surprised to see the rate exceed 5% in September with the trend continuing. Charities need to know about this shift and they need to act.”
This is the fourth consecutive month in which direct debit donation cancellations have increased. Gray had hoped that this was a temporary situation. However, Gray concludes: “it is becoming clear that the trend has shifted once more with our figures reflecting the recent sharp economic downturn and threat of double-dip recession. Consumers are tightening their personal finances still further under uncertain economic conditions that are unlikely to improve very quickly.”
Gray advised charities to take action to try to minimise cancellations. “Now is the time to be as proactive with donors as possible” he said. “If you are stalling a stewardship programme or have communications, appeals or campaigns on hold, it’s time to act.”
He invited charities that had experienced marked changes in regular donation cancellations over the past few months to contact Rapidata with their experiences.
Cancellation rates across the calendar year of 2010 were significantly lower than those seen in 2009 (which averaged 4.05%), reaching pre-recession levels, with an average for the year of 3.32%. For the last four months of 2011 rates have followed the shape of the annual cancellation cycle but at a full percentage point higher than this time last year.
The Rapidata Charity Direct Debit Tracking Report 2011 is available as a free download from: