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Direct Debit - The Golden Egg of Fundraising

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Presentation used by Scott Gray, Managing Director of Rapidata at the Institute of Fundraising Strategies and Retention conference.

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Direct Debit - The Golden Egg of Fundraising

  1. 1. Institute of Fundraising – Strategies for Supporter Retention<br />Direct Debits – The Golden Egg of Fundraising…<br />
  2. 2. Direct Debits – The Golden Egg of Fundraising…<br />Introduction<br />Scott Gray, Managing Director,<br />Rapidata Services plc<br />sgray@rapidata.co.uk<br />
  3. 3. Direct Debits – The Golden Egg of Fundraising…<br />Why am I here?<br /><ul><li>Findings of our Direct Debit Tracking Report
  4. 4. Impact of the Recession on DD donations
  5. 5. How to turn the data to your advantage - what can you do to boost retention, prevent cancellations & re-activate donors</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />How has the recession affected you?<br /><ul><li>Donations have fallen by 11% over the past year (source: UK Giving 2009, CAF/NCVO)
  6. 6. 50% of charities globally have reported a decrease in income over the past 12 months (source: The Management Centre)
  7. 7. But, the good news is that regular giving through direct debits etc, is on the rise. 37% of donors now use regular giving (up from 34% in 2006/07) and these donations constitute 31% of total amount given (source: UK Giving 2009, CAF/NCVO</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />Rapidata’s Charity Direct Debit Tracking Report<br />Rapidata produced its first Direct Debit Tracking Report in January 2009.<br />Why track direct debit donations?<br />Best placed to see what the impact of the recession has had on direct debit cancellations<br />To raise the profile of direct debit in fundraising<br />
  8. 8. Direct Debits – The Golden Egg of Fundraising…<br />Rapidata’s Charity Direct Debit Tracking Report<br />What the Tracking Report shows:<br />Direct Debit Cycle<br />Falling cancellation rates* prior to the onset of the credit crunch<br />Effect of the credit crunch and recession –cancellations rates of direct debits skyrocketed<br />*The cancellation rate is the number of direct debits cancelled in a calendar month as a percentage of total live direct debits.<br />
  9. 9. Direct Debits – The Golden Egg of Fundraising…<br />Average monthly cancellation rates<br />
  10. 10. Direct Debits – The Golden Egg of Fundraising…<br />Average monthly cancellation rates<br />
  11. 11. Direct Debits – The Golden Egg of Fundraising…<br />Direct Debit Annual Cycle<br />
  12. 12. Direct Debits – The Golden Egg of Fundraising…<br />What does the data tell us<br /><ul><li>Direct debit cancellation rates follow an annual cycle
  13. 13. Cancellations rise in the lead up to the Summer – peaking in August/September
  14. 14. There is a sharp fall in cancellations for the latter part of the year, dropping to their lowest over Christmas
  15. 15. Cancellations rise again in January, before dropping back down again through February and March</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />Direct Debit Annual Cycle<br />
  16. 16. Direct Debits – The Golden Egg of Fundraising…<br />Direct Debit Annual Cycle<br />
  17. 17. Direct Debits – The Golden Egg of Fundraising…<br />The impact of the recession<br />
  18. 18. Direct Debits – The Golden Egg of Fundraising…<br />The impact of the recession<br />
  19. 19. Direct Debits – The Golden Egg of Fundraising…<br />The impact of the recession<br />
  20. 20. Direct Debits – The Golden Egg of Fundraising…<br />The impact of the recession<br /><ul><li>In September 2008…</li></ul> 50% more people cancelled their DD than in the average pre-recession September<br /><ul><li>In December 2008…</li></ul>Two thirds (67%) more people cancelled their DD than in the average pre-recession December<br /><ul><li>In January 2009…</li></ul> 54% more people cancelled their DD than in the pre-recession January<br />
  21. 21. Direct Debits – The Golden Egg of Fundraising…<br />What has happened this year?<br />
  22. 22. Direct Debits – The Golden Egg of Fundraising…<br />A plateau in cancellation rates?<br />
  23. 23. Direct Debits – The Golden Egg of Fundraising…<br />A plateau in cancellation rates?<br />Not yet!<br />For cancellation rates to return to their pre-recession levels this year, we would need to see a reversal of the Annual Direct Debit Cycle. Cancellations would need to have fallen this summer<br />They have not!<br />
  24. 24. Direct Debits – The Golden Egg of Fundraising…<br />A plateau in cancellation rates?<br />
  25. 25. Direct Debits – The Golden Egg of Fundraising…<br />Implications for 2009/10<br />In summary:<br /><ul><li>People are still cancelling their charity direct debits in significantly higher numbers than they were doing before the onset of the recession in August 2007.
  26. 26. Cancellations are now starting to decrease, which might be the first sign that cancellations might – we stress might – be beginning to plateau
  27. 27. 2009/10 will still be a year of higher than average direct debit cancellations</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />How to use this data to your advantage<br />While we can’t prevent a recession, there are ways to use this data to your advantage:<br /><ul><li>To aid donor retention
  28. 28. To prevent cancellations
  29. 29. To re-activate donors</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />How to use this data to your advantage<br /><ul><li>See if the direct debit cycle matches your direct debit cancellation rates. Is it higher or lower?
  30. 30. Before a high cancellation month, contact your donors to reinforce your cause:
  31. 31. Thank donors & communicate what the charity has been able to achieve
  32. 32. Issue a newsletter
  33. 33. Use this knowledge to consider when to run your next DM campaign or a reactivation / upgrade campaign</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />Acknowledge any direct debit cancellation, thanking donors for their support and act fast!<br />“The most important thing to remember is that the process of reactivating a cancelled donor starts from the very moment they cancel”<br />
  34. 34. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />2) Offer alternatives<br /><ul><li>Reduced amount
  35. 35. Payment holiday
  36. 36. Change in frequency</li></li></ul><li>Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />3) Ask for feedback - questionnaire<br />
  37. 37. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />4) Online Reactivation<br />
  38. 38. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />5) Regularly test sample reactivations<br />
  39. 39. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />6) Attempt to reactivate sooner rather than later<br />
  40. 40. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />7) Reactivation Budget<br />
  41. 41. Direct Debits – The Golden Egg of Fundraising…<br />What to do?<br />In summary…<br />Acknowledge<br />Offer Alternatives<br />Ask for feedback<br />Online Reactivation<br />Test reactivations<br />Reactivate sooner<br />Budget<br />
  42. 42. Direct Debits – The Golden Egg of Fundraising…<br />THANK YOU – Questions?<br />“The most important thing to remember is that the process of reactivating a cancelled donor starts from the very moment they cancel”<br />www.rapidataservices.com<br />

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