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Rapid drop in Direct Debit donation cancellations, says Rapidata Tracking Report

Fewer donors are cancelling their Direct Debit regular gifts to charity than at any time since 2006, before the global recession occurred.
Rapidata Services Plc has announced a dramatic fall in the past year to the lowest annual average rate of charity Direct Debit cancellations since 2006.
The company’s research is based on more than 500,000 monthly Direct Debit transactions. Indeed, Rapidata’s Tracking report has been analysing Direct Debit cancellations over the past ten years.

Direct Debit cancellations down to 2.4%

Chart 4: return to pre-recession lows
According to Rapidata, during 2013, cancellations fell from 4.05% in January to close at 2.4% in December. The average cancellation rate of 3.1% for the year was the lowest level since 2006, and lower than that of 2012 (3.56%).

Rapidata supporter services

Pre-recession giving highs

Pre-recession giving highs


The Rapidata report shows not just the impact of the recession on cancellation rates, but also indicates how key national events can impact donor behaviour. The London Olympics and Paralympics of 2014, and the wedding of Prince William to Kate Middleton both seemed to produce a positive attitude that resulted in markedly fewer cancellations during those months.
Mark Astarita,Director of Fundraising at the British Red Cross and Chair of the Institute of Fundraising, added:

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“History will show that UK fundraising weathered the storm of this last recession rather well and that this will have been done best by those who concentrated on regular giving.
“In January 2009, with the full roar of the recession ringing in our ears, 5.63% of Direct Debits were cancelled. By December 2013, cancellation rates were down to a remarkable 2.40%. The difference may only be a few percentage points but for charities as a whole those few points mean millions of pounds.”

Cancellation cycle

Rapidata has found that, over the last 10 years, cancellations tend to occur during the summer months and after Christmas, as people cut back for the additional expense often associated with these holiday seasons.
However, this typical cancellation cycle broke down during the peak period of the recession and fluctuated with the impact of major events. But the figure had started to return to a similar pattern in 2012.
The report is being launched today at the IoF National Convention 2014 on stand 42 .
 

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