The number of people setting up direct debits fell in 2018, but cancellation rates also hit an all-time low, as charities scaled back fundraising activity to prepare for new for new rules about processing data, according to an annual tracking report.
Rapidata’s Charity Direct Debit Tracking Report 2019, published today, said the implementation of the General Data Protection Regulation last year had a significant impact on the sector.
Findings are based on data gathered by Rapidata, part of the Access Group, for over 600 charities covering 21 million direct debit transactions.
It said that the number of new direct debit donors fell by 32 per cent in 2018 compared with the previous year. This compares to an 8 per cent growth from 2016 to 2017.
The report attributes this drop to charities scaling back on fundraising activity as they made sure their systems and processes complied with GDPR.
Its data for 2019 so far suggests an uptick in the number of new donors, with “initial findings indicating high growth (53 per cent) in the acquisition of regular givers from January to April of this year”.
Scott Gray, head of payments, Access Group, and research lead on Rapidata’s Tracking Report, said: “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.”
Cancellation rates at record low
The average annual rate for charity direct debit cancellations fell to a record low of 2.14 per cent.
Rapidata said this was also linked to the introduction of GDPR because newer donors are more likely to cancel. However its early indications for 2019 are that cancellation rates remain lower than in previous years.
Daniel Fluskey, head of policy and external affairs at the Institute of Fundraising, said: “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.”
Growth of online
In contrast to the broader trend, the number of people signing up for direct debits online increased by 55 per cent. The previous year it had grown by 30 per cent.
Half of online sign-ups are made using a mobile device, the report said.