2016 annual Direct Debit cancellation rate lowest ever, reveals Rapidata report
Melanie May | 3 July 2017 | News
2016 saw the lowest annual Direct Debit cancellation rate on record at 2.61%, according to Rapidata’s Charity Direct Debit Tracking Report 2017.
Released today at the Institute of Fundraising’s Fundraising Convention. Rapidata’s 2017 Charity Direct Debit Tracking Report reveals the lowest cancellation rate since its records began in 2003. Further record monthly lows occurred in April (the lowest monthly cancellation rate ever, at 2%) and July (2.48%).
The report reveals that 2016 deviates from the typical annual Cancellation Cycle and, coupled with the unusually low cancellation figures, describes this as an ‘adjustment year’ following the 2015 fundraising crisis with a positive return to more usual regular giving levels seen so far in 2017.
Rapidata’s figures for the first quarter of 2017 indicate a slight rise and a return to the more usual annual Cancellation Cycle pattern, with the report suggesting that rates are returning to and continuing the positive long-term downward trend seen in recent years. According to Rapidata’s figures, Q1 data for 2017 shows similar levels to 2015, with a 2.86% cancellation rate in January 2017, close to the 2015 and 2014 rates of 2.95% and 2.82% respectively.
For the first time, this year’s Tracking Report also looks at online regular giving through charities’ own websites, via Rapidata’s eDirectDebit service. The data from this subset shows a 7% annual growth in the number of donors signing-up to a Direct Debit online. While sign-ups to regular donations via desktop computer remain 24% higher in value, at an average £13.75 compared to £10.49 by mobile phone, more donors are choosing to give by mobile and the gap between the two is closing. Online sign-ups also show a Gift Aid take up of 94%.
In the report, Rapidata has also introduced a recommended charity ‘industry standard’ for monthly Direct Debit cancellation rates: the Cancellation Average Benchmark (CAB), which it has set at 3%. The aim is that the benchmark will encourage charities to actively monitor cancellations and their regular giving donor experiences, with the objective of staying below an average monthly rate of 3%.
Scott Gray, CEO of Rapidata, said:
“Our Tracking Report for 2017 is one of the most extensive we’ve produced and unveils unique insights that should be useful for all charities building on their regular giving programmes. Uncertainty following the fundraising crisis led to a widespread loss of confidence within the sector but we appear to be gaining a more positive footing. While it may be concerning to see an increase in cancellation rates for 2017, any figures which indicate a return to a sense of normality can only be welcomed as a good thing as it shows that charities’ confidence in their activity with both new and existing donors is returning.”
Commenting on the report, Tim Hunter, Director of Fundraising at Oxfam, said:
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“I recognise that 2016 was a very different year and for many charities a year of uncertainty and change with some fundraising activity much reduced. But long-term, the trend of cancellations is down and that must be worth celebrating. It shows that supporters are more loyal to the charities they give to than headlines might suggest but we can’t be complacent and we all need to work hard to keep inspiring supporters with the stories and evidence of the difference they are making.”
Rapidata’s Charity Direct Debit Tracking Reports monitor Direct Debit donation data since 2003. Findings are based on data gathered from several hundred charities of all sizes and causes. In 2016, the segment size covered more than 9.46 million Direct Debit transactions totaling over £82.5 million in donations processed. Cancellation averages are based on number of Direct Debits processed per month by cancellations received.
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.