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Direct debit collections most profitable

Fundraising | Gemma Ware | 7 Apr 2008

More money was donated via Direct Debit than any other means during the last financial year, totalling 22 per cent of the total given to charity, according to UK Giving 2005/06, the annual survey of individual giving published last month by the Charities Aid Foundation and the NCVO.

But although Direct Debit emerged as the most profitable way of collecting donations, cash was still the most popular method with 49 per cent of donors choosing to give with cash compared to 43 per cent the previous year. Despite this, cash accounted for only 16 per cent of the total given to charity. The report said that this indicates a “limited drive to shift giving towards more planned methods”, and suggested more ongoing initiatives were needed to convert donors to regular giving.

The report also highlighted a surge in the average gift size donated by younger supporters, most noticeably among 25 to 34 year olds who gave an average of £28 per month, up from £23 in the previous year. The researchers suggested this reflected a “higher level of civic awareness inspired by high-profile emergency appeals”, but said it was unclear yet whether this would become a genuine trend among the younger generation.

The pattern of overall giving emerged in the report as “fairly consistent” from year to year, with nearly three-fifths of the population, or 57.6 per cent of the country giving to charity each month and the value of donations remaining static at 0.9 per cent of gross domestic product. Donations in 2005/06 totalled £8.9bn and the average amount donated per adult was £183.36, indicating that although there has been no rise, giving has at least maintained 2004/05 levels.

There were geographical disparities in how much people gave, with people in London, south east England and the east of England donating more than the national average of £15 per head and making up the highest proportion of the total given. The survey recommended that charities should look at addressing the low levels of engagement and participation in some regions of the country, which indicated that organisations “may have a weaker presence in these areas, giving people fewer opportunities to get involved”.

There was still no improvement in the number of donors maximising the value of their gifts by using Gift Aid, with only a third of donors using it for at least one donation. And there was a significant decrease in the number of high level donors using Gift Aid, with only 57 per cent of those giving more than £100 a month doing so tax efficiently. The report’s researchers suggested this could reflect the unusually high use of tax-efficient giving to tsunami appeals the previous year. Lowerlevel donors giving less than £5 a month were also unlikely to use Gift Aid, with only 17 per cent making their donations tax efficiently.

Medical research charities increased their dominance of the sector as the most popular cause, attracting 19 per cent of all donations, up from 13 per cent last year, while the proportion of donors giving to those charities rose from 34 per cent to 40 per cent. The proportion of donors supporting overseas charities also grew from 14 per cent to 20 per cent, although those causes’ share of the amount given remained static at 13 per cent.

High-level donors were also twice as likely as other donors to support overseas aid charities but three times as likely to support religious causes. Religious causes were also the most organised at planned giving, with 28 per cent of their donations collected through Direct Debit.

Once again women were more likely to give, with 61 per cent giving per month compared to 53 per cent of men. But men gave more per donation, an average of £29 per month compared to £25 for women.

Commenting on the report, Stuart Etherington, chief executive of NCVO said: “It is great to see people haven’t taken ‘time off’ giving after the incredible generosity we witnessed following the Asian tsunami.”

The full report, UK Giving 2005/06, is available to download from the CAF and NCVO websites.

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Who's Who: Gemma Ware