New direct debit sign-ups down by 54% in April

07 May 2020 News

New donors signing up for direct debit donations to charities decreased by 54% in April compared to the same month last year, according to data from a charity payment company.

Rapidata, part of the Access Group, gathers data on more than 600 charities and about 21 million transactions.

April data shows a downward trend in new direct debit sign-ups. New sign-ups were also down in March (by 24.1% year-on-year), but April’s decrease was twice as large (54%).

Meanwhile, the number of existing regular donors who cancelled their direct debits was back to normal levels in April , after a period of growth in March.

April’s direct debit cancellation rate stood at 2.04%, compared to 2.13% in the same month in 2019. In March the same rate was 3.09%, which was 41% higher than in March 2019 and had prompted Rapidata to say that “the coronavirus pandemic has had a major impact on regular giving to charities”.

Regular giving ‘remains a strong and stable income stream’

According to Rapidata, this data shows that most regular donors have for now decided to continue supporting charities through the crisis. The company said that the decrease in new sign-ups is likely caused by the suspension of in-person fundraising activities.

Scott Gray, Rapidata lead and head of payments for The Access Group, said: “It is with some relief we are able to report that the charity direct debit cancellation rate has swung back to its usual trend line and that the significant jump recorded in March does appear to have been a direct response to the Covid-19 situation. 

“April’s cancellations rate of 2.04% is in fact slightly lower than April 2019 at 2.13%. This is likely reflecting a combination of settling into life in lockdown, with the majority of regular supporters having already made their decisions whether or not to change their regular giving practices during the month before; and significantly fewer new regular supporters being signed-up, leading to less first month attrition being recorded. 

“Numbers of new regular donors signing up are currently low, but this is no surprise while key fundraising channels like face-to-face remain out of action. It is heartening that the majority of committed regular donors have maintained their support and that regular giving remains a strong and stable income stream for many charities.”

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