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Covid-19 impact on regular charity donations during April

Covid-19 impact on regular charity donations during April

New donor sign-ups remain low, Direct Debit donation cancellations rate returns to norm

During April 2020, charities in the UK saw cancellations of regular Direct Debit donations return to a more usual level at 2.04% as life in lockdown settled into a ‘new norm’. But the number of new supporters signing up to regular giving in April remained low at 54% lower than the same month last year.

April’s data, released today by charity payments specialist Rapidata, part of The Access Group, indicates that Direct Debit donations from long-term supporters have stabilised, aligning once more with the usual annual cancellations cycle1. This follows March’s jump in cancellations to 3.09%, when coronavirus took hold of the nation and the UK went into lockdown.

Scott Gray, Rapidata lead and Head of Payments for The Access Group, explains,

“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. The sudden uncertainty and concerns around job losses, the furlough scheme and the impact on future personal income will have seen many people review their ability to continue supporting their chosen charities at this time.

“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.”

With charities facing the current funding crisis, many have reduced donor acquisition campaigns in recent months and shifted focus to existing supporter care, while the continued absence of mass participation events and face-to-face fundraising due to social distancing measures, will be a major contributing factor to the reduced numbers of sign-ups – less than half as many as this time last year.

Daniel Fluskey, the Institute of Fundraising’s Head of Policy & External Affairs, says:

“The long-term support and commitment from people giving regular gifts is so important for charities to be able to deliver their work, so it is pleasing to see that the cancellation rates for direct debits has come back to normal. Over the last month or so we’ve seen fantastic one-off giving to fundraising appeals, and some special events such as #TheBigNightIn and the 2.6 Challenge, which demonstrates just how the public do want to support good causes. Over the coming months, we hope to see the number of new direct debits rise as charities adapt their fundraising activities and coronavirus recovery begins to take hold.”

Scott continues, “During April there was a sense of the British public getting to grips with the situation. A great deal of attention was turned to supporting the NHS, charities and wanting to help others. Meanwhile, we’ve seen charities being more pro-active in their regular supporter communications, thanking donors and offering greater flexibility in their regular Direct Debit donations – be it reducing the amount or taking a payment holiday.

“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. The fact that the monthly cancellations rate has returned to pre-coronavirus levels so swiftly is hugely encouraging.”

Read more from our Covid-19 resources hub >

Notes for editors

Charity Direct Debit Cancellations Rate – February to April 2019/2020

2019 2020
FEB 2.02% 2.16%
MARCH 2.19% 3.09%
APRIL 2.13% 2.04%

1Annual Cancellations Rate Cycle

Typically, average cancellations rates from 2003 to present show that cancellations follow an annual cycle pattern. Rates drop during the first half of the year, rising over the Summer and falling again towards the end of the year. Peak months are usually January, July/August and October, while the Spring (April to June) and December tend to bring about the lowest cancellation figures each year.