GDPR had major impact on regular giving in 2018, but signs positive for 2019, report shows

Melanie May | 1 July 2019 | News

Rapidata has released its Charity Direct Debit Tracking Report 2019, which reveals that while GDPR had a major impact on regular giving in 2018, initial signs for 2019 show positive growth.
Released on the first day of Fundraising Convention (1 July) Rapidata’s Charity Direct Debit Tracking Report 2019 shows that donor acquisition fell during the months before and after the new regulation came into force in May 2018, while Direct Debit cancellations hit an all-time low.
The report includes new data from January 2017 to end of March 2019 from over 600 charities, adding to the long-term trend analysis begun by Rapidata in 2003.
Its findings show that in 2018 the average annual rate for charity Direct Debit cancellations fell to a record low of 2.14%, while each month of the year apart from January exhibited the lowest rates ever recorded for that month across 15 years of tracking data. May and June 2018 dropped to 1.95% and 1.89%, compared to 2017 rates of 3.07% and 2.15% respectively.
However, donor acquisition volumes for regular giving also fell across 2018: by nearly a third (32%). This is attributed to significantly less fundraising activity across traditional methods such as direct mail, telephone and face-to-face, while charities focused their resources inhouse on meeting requirements for GDPR compliance.
While overall acquisition volumes fell, online Direct Debits continued to grow strongly with regular giving sign-ups increasing by 55% last year.  This was coupled however with a 2% dip in average monthly gift value.
2019 is looking more positive according to Rapidata’s initial findings, which show 53% growth in the acquisition of regular givers from January to April of this year. Cancellations rates for the first quarter of 2019 also suggest a return to a more typical cancellation cycle, although lower than before, with rates of 2.89%, 2.02% and 2.19% for January to March respectively.
Scott Gray, Head of Payments, Access Group, and research lead on Rapidata’s Tracking Report commented:

“2018 was atypical due to the introduction of GDPR and the uncertainties surrounding its implementation that saw so many charities cancelling or postponing campaigns. Now that this is behind us, we are seeing positive changes in fundraising, with a greater emphasis on building engagement and deeper relationships, as well as smarter and more considered use of data.
“Initial results for 2019 are extremely promising with what looks to be a return to a more typical – but lower – cancellations cycle, as well as a strong increase in acquisition volumes. It seems unlikely we’ll ever again see the high cancellations rates of old.”

Daniel Fluskey, the Institute of Fundraising’s Head of Policy & External Affairs, said:

“The insights into regular giving that Rapidata provides are of immense value and there is much to take on board from this year’s findings. The impact of GDPR meant 2018 was undoubtedly an unusual – and challenging – year for fundraising. However, the findings from this year’s research, especially the new lower levels of cancellations we’re seeing in 2019, show that the hard work put in by charities to improve their supporter relationships is now starting to pay off.”

This year, Rapidata’s report also introduces a benchmark for no show payments – the percentage of cancellations that are from newly signed-up donors who do not progress to make their first gift payment by Direct Debit.
Gray explained:

“Having monitored no show rates since 2010, we know that these can have a sizeable impact on cancellations rates. We are recommending that charities with a multi-channel acquisition approach consider 11.5% as a benchmark for their own no show payments, aiming to keep them to a minimum.”

Rapidata also announced in the report that it is to keep its Cancellation Average Benchmark (CAB), which it introduced in 2017, fixed at 3%. It is encouraging charities to aim to stay below this by actively monitoring their cancellations and regular giving donor experiences.
Rapidata’s Charity Direct Debit Tracking Report 2019 is available as a free download from today, or as a hard copy from the Access Rapidata Stand no.33 at IoF National Fundraising Convention.

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