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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Charities losing out on direct debit payments

This opinion piece is about 8 years old
 

A staggering 91% of charities still don't accept Direct Debit payments: this must change, says Louisa Buckingham

The way that we make payments is changing. As we all start to carry less cash in our pockets, more of us are turning to cards and even contactless phone apps to pay for goods and services. But it appears that charities are not as accommodating as most retailers.

According to figures from BACS, the number of charitable donations made by Direct Debit in 2014 across the UK rose by two million compared to the previous year. While this is an extraordinary increase, revealing just how much people are starting to depend on Direct Debits, research by the Charities Aid Foundation found that a staggering 91% of charities still do not accept donations made by Direct Debit.

While it seems that a huge number of charities are reluctant to take on Direct Debit payments, there are tremendous benefits to allowing this as a donation option, for both sides of the transaction.

Rather than making the occasional donation as an afterthought, setting up a Direct Debit with their bank account gives the donor greater control over when and how they give. It can be a set amount to be withdrawn from their account on a specific date, such as at the beginning of the month just after payday. It allows a person to budget exactly and if, for whatever reason, the donor wants to cancel their monthly payment, then they can do so with just a few clicks of a mouse.

Louisa Buckingham

If charities accept modern payment methods, the number of donations being made will spiral upwards

Louisa Buckingham

Everyone knows that Direct Debits are secure, which is one of the huge benefits of utilising this method for charity donations. Handing control back to the donors builds trust; as they know that their money is being sent directly to charities themselves.

Receiving a regular donation through a paperless Direct Debit scheme, as opposed to a one-off large donation, gives charities the ability and security to budget and plan ahead. By having a better idea of income, charities will be able to organise their strategies in much more detail; having a thorough idea of how and where they could effectively spend their money.

By offering more flexible donation methods, it is also likely that charities of all shapes, sizes and popularities could experience a boost in donations.

Research conducted by Direct Debit specialists First Capital Cashflow has found that cancer charities were most likely to receive donations, with 30.6% selecting them as their preferred charities.

At the other end of the spectrum, charities aimed at animals received just 5% of the vote. If more charities accept modern payment methods, there’s every chance that the number of donations being made will spiral upwards, and those organisations that perhaps don’t receive the same amount of public exposure as their bigger counterparts can level the playing field somewhat.

Given the statistics about Direct Debits, it is likely that a number of charities are missing out. People lead increasingly busy lives, so it’s imperative that the third sector takes measures to make charitable giving as quick and convenient as possible. Such a significant increase in the number of Direct Debit payments being made shows that it is a favourite method amongst the general public, it’s now up to the different charities to make it available.

Louisa Buckingham is marketing executive at First Capital Cashflow.