Direct debit cancellations fell to a record low when GDPR was introduced, Rapidata says

Figures from the payment processing firm Rapidata showed donor acquisitions also fell when the GDPR came into force last year

Direct debit donation cancellations fell to a record low in the months surrounding the implementation of the General Data Protection Regulation last year, the payment processing company Rapidata has found.

At the same time, donor acquisition fell by nearly a third, according to Rapidata’s Charity Direct Debit Tracking Report 2019, released today.

But the early figures for 2019 show positive growth in new direct debit sign-ups, the report says.

The GDPR, which came into force on 25 May last year, imposed new, more stringent data-protection rules on organisations that process data.

The Rapidata report shows that the average rate of charity direct debit cancellations across the year fell to a record low of 2.14 per cent, and in every month apart from January the cancellation rate was at the lowest level for that month since Rapidata began recording data 15 years ago.

But although fewer people were cancelling their direct debits, fewer people were signing up in the first place, the report says.

The donor-acquisition rate fell by 32 per cent compared with 2017, the report says.

"This is attributed to significantly less fundraising activity across traditional methods such as direct mail, telephone and face-to-face, while charities focused their resources in-house on meeting the necessary requirements for GDPR compliance," Rapidata said in a statement.

But the report adds that in the first quarter of 2019 "the sector seems to have rallied", with initial figures suggesting a 53 per cent growth in the acquisition of regular donors.

It says that cancellation rates fell back into a more typical fluctuation cycle, although they are still lower than during some previous years.

"This indicates that the sector has settled into this new post-GDPR era for fundraising," the report says.

The report also introduces a benchmark for the amount of "no-show" donors – incidents in which newly signed-up donors fail to make even their first direct debit payments.

Charities should aim to keep these incidents below 11.5 per cent of all cancellations, the report says.

"Close monitoring of no-shows can help charities identify what may have gone wrong; whether this was down to a change of heart by the supporter or simply that transactions failed to go through, and what can be improved going forward," the report says.

"No-shows can have a sizable impact on a charity’s cancellation rate as a whole."  

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