​Research shows charities are now more likely to retain direct debit donors for longer

New research shows direct debit cancellations for charity donations in 2013 fell to the lowest annual average rate since before the recession.

Charities who use direct debit for regular donations have traditionally struggled to retain donors for more than three months after sign-up.

However, figures released by Rapidata, which adminsters payments on behalf of not-for-profit groups, show direct debit cancellations fell from 4.05% in January last year to 2.4% in December.

The average cancellation rate for the year, 3.1%, was the lowest seen since 2006.

Average annual rates of cancellations peaked at 4.33%t in 2008, falling to 3.32% in 2010, before rising to 3.79% in 2011.

During the recession, many charities invested more resources into retaining donors

The report says cancellations have historically been during the summer months and after Christmas as people cut back due to the additional expense of the holiday seasons.

The cycle for 2013, however, was less typical with a constant decline in cancellations throughout the year.

During the recession, cancellations hit a peak of 5.63% in January 2009.

Scott Gray, managing director of Rapidata, says: “Looking at cancellations from the last few years, we can see the catastrophic impact of the recession on charities’ regular giving income streams.

"During the recession, many charities invested more resources into retaining donors."

Gray said the cancellations for 2013 are the clearest sign that charities’ investment has succeeded.

"With continued investment in donor stewardship, charities fought through the recession, driving down cancellations to create the most positive environment for regular giving ever seen.”