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Direct Debit donations

Given how fast we’re heading towards a cashless society, it’s perhaps no surprise that coins and notes are no longer the favoured method when the general public wish to donate to charity.


According to Charities Aid Foundation’s ‘UK Giving Report 2022’, direct debit has become the most popular way for people to give money to good causes, with 38% of all donors signing bank mandates to authorise this type of regular giving.


This represents some shift in my eyes. Throwing your unwanted copper and silver in the buckets of charity volunteers can be a sporadic or one off action, but once you bring direct debits into the occasion, charitable giving becomes a more formal, continuous arrangement between the donor and the charity in question. I don’t think I’ve seen a direct debit instruction for less than £2 a month, which is a minimum of £24 over the whole year. If you think back to when we all carried and used cash, and collection buckets were far more rife than they are now…would you have donated as much as £24 over a period of a year in this manner?


woman using debit card to pay directly for an item.

Direct debit is a great solution for charities, as they can rely on the repeat income (at least until the donor cancels the bank mandate). It’s a much cleaner, less labour-intensive way of receiving donations, too—no trekking down to the bank or coin machine to cash in the day’s haul (coins can be quite heavy to carry!). It’s probably easier for donors also, as few people carry cash around nowadays, and a direct debit allows them to set up a regular giving instruction that can just be forgotten about whilst they get on with other aspects of their lives.


That’s all well and good but we’re amid a cost-of-living crisis, and even £2 a month may be more than some families/individuals can afford to give at the moment. This is reflected in the UK Giving Report: one in every 25 donors have already cancelled their direct debit instructions.


Whilst it makes sense that any charity worker looking to sign up donors to a regular giving direct debit arrangement would canvass in places with plenty of footfall—e.g. outside supermarkets, in shopping centres, even on people’s doorsteps—there are companies that employ face to face fundraisers and train them to not accept no for an answer. Shoppers can feel obliged—and sometimes, even harassed—to agree to such an arrangement when they would not think of doing so under their own stream. Such aggressive sales techniques have seen these fundraisers labelled as ‘chuggers’ (charity muggers). If fewer people can afford to donate in this manner or be less inclined than ever to commit to a direct debit, it does beg the question whether chuggers will terrorise the public even more in their desperate bid to receive their commissions.


According to the CAF report, fewer people were asked to give during 2021. There could be a number of reasons for this. Covid restrictions were still present earlier that year, which would have reduced the number of opportunities in which charities could ask for donations in person and at offline events. The shift, fuelled by the pandemic, to not carry cash put paid to a lot of traditional methods charities would use to raise money from the general public—such as bag packing in supermarkets, bucket shaking in shop doorways, car washes, bake sales, galas…as we prioritised our health and our personal spaces, such fundraising activities dwindled.


Close-up photo of a debit card numbers and microchip

That’s not to say all things fundraising just disappeared. In many instances, fundraising activities shifted online or they turned into a more formal commitment with donors, such as direct debits.


With even those who some would class as ‘well off’ tightening their belts and justifying any outgoings, we could be on the precipice of a very tough time for the third sector. Causes and issues may be easier to explain in the current climate—certainly any associated with poverty or disadvantage—however, the scale of such societal problems will only increase, because of the crisis. More beneficiaries but fewer people with money to spare/donate…times are going to get very tough indeed.


Charities will need greater funds to cover their running costs if they have premises to run and staff to keep. Some may go under altogether.


Donors willing to commit to direct debit donations tend to be amongst the older population. This could be because this age group has fewer outgoings to cover if their mortgages have been settled and their children have left home. According to the report, younger demographics have restricted the amount they donate, if they even donated at all, and it’s the CAF’s suggestion that more should be done to engage these fledgling donors.


As Neil Heslop, CEO of the Charities Aid Foundation, says, ‘The report, which covers 2021 and also reflects the first few months of 2022, will be sombre reading for those in the charity sector.’ He’s not wrong. There are few, if any, silver linings to take from their findings. It simply reflects the state of the economy at present and the financial outlooks of many families and individuals across the UK.