Rapidata’s Charity Direct Debit Tracking Report released today

GDPR implementation had major impact on regular giving in 2018, but positive growth shown in early 2019, reveals Rapidata’s Charity Direct Debit Tracking Report

  • Acquisition fell & Direct Debit cancellations rates hit all-time low
  • 2019 Q1 shows positive growth
  • Rapidata introduces 11.5% benchmark for No Show payments
  • Charity Cancellation Average Benchmark (CAB) remains fixed at 3%

Rapidata’s Charity Direct Debit Tracking Report 2019 reveals how GDPR had a major impact on donor acquisition and Direct Debit cancellations, virtually flatlining regular giving during the months before and after it came into force in May 2018.  However, the first quarter of 2019 shows rapid positive growth, indicating that the sector has rallied with confidence.

Rapidata, part of the Access Group, released its new Tracking Report for 2019 at the Institute of Fundraising’s National Fundraising Convention in London today (1st July 2019). It includes new data from January 2017 to end of March 2019 from over 600 charities, adding to the long-term trend analysis started in 2003.

The report reveals that in 2018 the annual charity Direct Debit cancellations rate fell to an all-time low of 2.14%.  Looking at the monthly rates, each month of the year apart from January exhibited the lowest rates ever recorded for that month across the 15 years of tracking data, with May and June 2018 dropping to 1.95% and 1.89% in comparison to 2017 rates of 3.07% and 2.15% respectively.

However, donor acquisition volumes for regular giving were also low for the same period. As GDPR was anticipated and then came into force, acquisition volumes dropped 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 on necessary 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. But, while more people signed up online, this was coupled with a 2% dip in average monthly gift value.

2019 and the future

Early indications for 2019 are hugely positive with initial findings showing high growth (53%) in the acquisition of regular givers from January to April of this year. Cancellations rates for the first quarter for 2019 also suggest a return to a more typical, although lower, cancellation cycle, 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: “2018 was atypical due to the massive impact of GDPR and the uncertainties surrounding its implementation that saw so many charities cancelling or postponing campaigns. Now that 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 rate cycle, as well as a strong increase in acquisition volumes. It’s unlikely we will see again the high cancellations rates of old.” 

Daniel Fluskey, the Institute of Fundraising’s Head of Policy & External Affairs, says: “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 year for fundraising and it is hugely pleasing to see that the hard work put in by charities to improve their supporter relationships is now starting to pay off.”

New 'no show' benchmark

As a first for the sector, Rapidata introduces a benchmark for no show payments – the percentage of cancellations from new donors who do not progress to making their first gift payment by Direct Debit. Gray explains:

“Having monitored no show rates since 2010, we know that these can have a sizable 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’s Cancellation Average Benchmark (CAB), introduced in 2017, remains fixed at 3%, encouraging charities to actively monitor cancellations and their regular giving donor experiences.

Direct Debit continues to be a trusted and reliable payment method for charities and their regular donors. Payments body Bacs reports continued growth with over 4.3 billion Direct Debits being processed in the UK across 2018, with charities receiving 108 million donations this way.