Direct Debit helps give charities a boost in difficult times

Charity Direct Debit donations have increased by 2.7% between January 2009 and November 2009, according to figures from Bacs Payment Schemes, despite the difficult economic back-drop. The average amount donated also increased from £7.46 in April 2009 to more than £7.60 in November 2009*.

Michael Chambers, Managing Director of Bacs said: “Despite the economic downturn people are continuing to make a financial commitment to charities and Direct Debit is becoming a critical tool for the sector to secure additional funding. For the cross section of charities we reviewed, we have seen that charitable donations by Direct Debit have risen from approximately 2.2 million transactions in January 2007 to around 2.8 million in November 2009. The average value has also shown a consistent increase, rising from just £7.32 in Jan 2007 to over £7.60 by the end of 2009, illustrating the important role Direct Debit has for charities.”

Commenting on recent figures released by the Charities Aid Foundation (CAF) which estimate that the charity sector misses out on around £750 million in unclaimed Gift Aid each year, Chambers continues: “The increased revenue Gift Aid donations can provide and the quite staggering amount charities are currently missing out on is compelling justification for everyone to sign up for Gift Aid** – particularly as it does not cost donors anything and is a very simple process.

“Donors who choose to give money through Direct Debit only confirm the relevant information when they initially set up their payment and thereafter the Gift Aid contribution is automatically collected along with the donation. 

“In addition the charities benefit not only from increased funds, but also from improved cash flow management, being fully aware of the money due to come in each month. As a result charities are better able to plan when funds are available and, more importantly, how they can be spent to help the beneficiaries.”