Processing agency Rapidata Services Plc reports that the cancellation rate of monthly debits to charities reached an-all time high of 4.58% in August, the worst for that month since the company began tracking regular giving trends eight years ago in 2003.  The figure even exceeds the August 2008 mid-recession figure of 4.4%.

"However, we should remember that Britain is one of the most generous nations and we should not be disheartened," says Rapidata's managing director Scott Gray. "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 minimize cancellations and attrition. . . . . If you are stalling a stewardship programme or have communications, appeals or campaigns on hold, it's time to act."

Consumers tighten their financial belts

An equally great concern, says Gray, is that August was the fourth consecutive month that cancellations have increased. He believes the trend reflects the recent sharp economic downturn and threat of double-dip recession. "Consumers are tightening their personal finances still further under uncertain economic conditions that are unlikely to improve very quickly," he explains.

August was indeed a rough month in Britain. The economy grew just 0.2% in the second quarter, and the market remained volatile.  A survey conducted on behalf of the European Commission showed British consumer confidence fell in August to its lowest level since April.  Another study showed that retail sales fell at their fastest pace in over a year in August. Even spending on food - not normally affected - fell in that month.

Drop reverses 18-month healthy trend

Earlier results had been much less worrisome, Gray explains. The cancellation cycle for 2010/11 (up to and including March) closely followed the pre-recession pattern of cancellations - very different from what he calls "the sky-high pattern" seen at the height of the recession in 2008/09.

A healthy trend appeared to be developing in the second half of 2009, when cancellation rates had already dropped dramatically from their recessionary high. Figures for 2010/11 showed that cancellation rates continued on this downward trend throughout the rest of 2010 and into 2011.

The first quarter of 2011 started on trend, showed a slightly higher than expected peak for February, but fell again in March to a low rate heading into the second quarter, and continued to sink in subsequent months.

The full Rapidata Charity Direct Debit Tracking Report 2011 is available as a free download from Rapidata's website www.rapidataservices.com .

For more information contact Jenny Turner, Turner PR - +44 (0)1932 859 617 or +44 (0)7940 472 653 jenny@turnerpr.co.uk