The long-term reward of direct debit donations

5 min read

Utilising paperless direct debit for your charity can have many short and long-term benefits. Not only will your donors feel the advantages of the smoother, more efficient system, but your organisation can also expect more income and loyalty over the months and years.

This is according to a recent case study by UK brand and design agency, IE Design Consultancy. Published on December 2 by Charity Digital News, the report revealed instances when this payment system directly benefited a number of charities.

In 1992, one of the directors of IE Design set up direct debit payments to seven different charities. Now, more than two decades later, that family is still sending monthly donations to four of the seven original organisations.

That’s 22 years of stable, monthly income for those four charities – which is an incomparable reward. If your organisation has been stuck shaking the collection tin on street corners for far too long, now may be the right time to consider a direct debit solution.

Direct debit is a popular choice

Research from another UK firm, BACS, found that one in five people made ongoing charitable donations via paperless direct debit in 2013. Comparatively, only 6 per cent donated by text.

What’s more, direct debit donations received over a year are worth substantially more to a charity than the average amount given by other payment methods. The most popular methods of giving included putting money in a tin, sponsoring someone, and an ongoing direct debit. The later method was worth around £80 (AU $150) more than any other type of donation.

Many charities spend significant amounts of time, money and manpower trying to attract donations. However, once you have landed a donor who agrees with your values and efforts, and convince them to commit to a donation, it is better to sustain that relationship for as long as possible

If you were able to hold on to the donors you already have, and sign them on for regular direct debit payments, you could experience significant benefits.

According to IE Design, the key advantages of the paperless direct debit systems include:

Reduced accounting and admin

If collecting cash in-hand, there is automatically a significant amount of time and resources required to record and bank this money. Direct debit, on the other hand, is completely automated, with funds delivered straight into your account.

This reduces the amount of administration needed, freeing up your time and energy for more important things.

More loyal and committed supporters

Donors who sign up to a direct debit payment are more likely to continue making payments than those who are continually requested to hand over money.

Once a person has agreed to the payment, the donation will continue to be paid as long as they have money in the bank – or until they choose to cancel the debit. At that point, you can reach out again, and remind them of your services to re-inspire the payment.

Easier for both the donor and the charity

It’s no secret that direct debit is easy. As a fully automated system, you can set up a payment then leave it to do its thing for months or even years. By removing the unnecessary hassle of having to get in touch and physically make a payment, you and your donor can enjoy a relationship that is easy to maintain and more likely to become a long-term partnership.

Increased payment security

When a donor chooses to make a cash payment, or a single card purchase, this money is often only protected by your company’s own systems. With direct debit, however, you can be sure that your funds are secure with a third party provider who is PCI compliant.