Charity Direct Debit cancellations highest ever recorded for August
The Charity Direct Debit Cancellation Rate for August 2011 has been recorded at an all time high 4.58%. This is the highest cancellation rate seen in the month of August since Rapidata Service Plc, the charity transactions processing agency, began tracking regular giving trends eight years ago in 2003. The figure exceeds the August 2008 mid-recession figure of 4.4%.
Says Scott Gray, Managing Director, Rapidata Services Plc,
“The recent increases in cancellations have spiked yet again in August to a shocking 4.58%. I am deeply concerned to see charity Direct Debit cancellations increasing again to recession levels and even higher. I wouldn’t be surprised to see the rate exceed 5% in September with the trend continuing. Charities need to know about this shift.
“This is this fourth consecutive month that cancellations have increased and although I was hoping we were seeing a temporary blip it is becoming clear that the trend has shifted once more with our figures reflecting the recent sharp economic downturn. Consumers are tightening their personal finances still further under uncertain economic conditions that are unlikely to improve very quickly.”
The economy grew just 0.2% in the second quarter and we saw the markets crash once again in August. A Gfk NOP survey conducted on behalf of the European Commission showed British consumer confidence fell in August to its lowest level since April. A CBI survey showed last week that retail sales fell at their fastest pace in over a year in August with spending on food even – not normally affected – falling.
“However, we should remember that Britain is one of the most generous nations and we should not be disheartened,” Gray continues, “We’ve been here before and seen recovery, but it means being proactive. Charities should be looking at their current activities and asking whether they are doing everything they can to minimise cancellations and attrition. The increases we’re seeing represent many thousands of pounds of lost donations each month, but also the loss regular donors. Now is the time to be as proactive with donors as possible. If you are stalling a stewardship programme or have communications, appeals or campaigns on hold, it’s time to act.
Rapidata will be tracking and monitoring cancellation figures as the year progresses. We would also call on charities that may have experienced marked changes in donation cancellations over the past few months to contact us with their experiences.”
Q1 2011 saw reasonably low cancellation rates with April at 2.44% (down from 2010 2.89%). In May we saw a significant increase in cancellation figures compared to last year and a rate that mirrored those seen in 2008 and 2009 during the depths of recession. The giving landscape offered no obvious explanation for this increase, either from current, political or economic affairs, nor from any one specific charity’s activity or campaign; cancellations increased across the board. With no single indicator Rapidata suspected the jump in cancellations to be an anomaly, just a blip for May.
June (3.87%) and July’s (3.91%) cancellation rates were lower, not exceeding 4%, but both were still much higher rates than expected for this time of year and through consecutive months. For the last four months rates have followed the shape of the annual Cancellation Cycle but at a full percentage point higher than this time last year, reflecting an economic shift since Q1 2011.
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