We at Localgiving know first-hand the importance of Direct Debits, we always encourage our members to promote this donation option to their supporters as it delivers many significant benefits. We now view it as really important that charities offer the capability to receive Direct Debits, with payments through this system accounting for 31% of all donations to UK charities (and rising). In 2023, 58 million donations totalling £1.1 billion were made to UK charities using Direct Debit - more than any other payment method. But what exactly makes Direct Debit such a great option for charities like yours? 

1. Regular and dependable income: Direct Debit donations ensure that charities can receive regular and dependable income. Donors can set up recurring donations, allowing funds to be automatically collected from their bank accounts at specified intervals (typically monthly). This consistent flow of donations helps charities plan their budgets more effectively and gain greater confidence in future revenue, making it easier to commit to projects and activities.

2. Cost-effective and efficient: Direct Debit is a very cost-effective method of receiving donations. Once the initial setup by Localgiving is complete, the process becomes automated, reducing the often-onerous administrative costs associated with processing individual donations. This efficient process ensures that charities save valuable time and resources and are able to focus fundraising energies elsewhere.

3. Makes bigger giving seem more achievable: most of us would probably have to think very carefully about donating £150. But £12.50 a month? That feels much more reasonable, In fact the average Direct Debit donation is around the £15 mark. Cash donations are significantly less, around £5. And this is before you factor in Gift Aid...

4. Gift Aid Integration: Gift Aid is a UK tax incentive that allows charities to claim an additional 25% on top of the donated amount for eligible donations. The Localgiving platform integrates Direct Debit into the Gift Aid processes, greatly simplifying the collection and administration of Gift Aid declarations. This further boosts the value of donations and provides a valuable additional source of income for charities.

5. Boosting loyalty and retention: By offering donors the option to set up recurring, consistent donations, charities can foster long-term relationships with these supporters. This convenience and flexibility make it easier for donors to continue supporting the charity over an extended period with these hassle-free and streamlined payments.  

6. Enhanced Donor Engagement: Direct Debit provides an opportunity for charities to engage and communicate with donors regularly by setting one up the donors will likely share their contact details. By gaining these details, charities can send newsletters, updates, Christmas cards – whatever works in bosting engagement! This further strengthens connection and a sense of community.

7. Reduction in Admin and Costs: Taking payments by cheque, cash or standing orders create a big administrative burden, especially if there is no automated reporting system. There can also be extra costs like printing and posting for postal campaigns, processing fees for card payments and telephone and text message follow-ups. Direct Debit donations can help reduce these costs and burdens, allowing charities to put more resources directly into their programs and initiatives.

8. Improved Donor Data Management: The Localgiving Direct Debit platforms offers reporting and data management capabilities through which the charity can monitor donation levels closely, identify trends and make changes accordingly. Greater access to donor data, makes it easier to make informed decisions.

Conclusion: Online fundraising often comes in the form of one-off, ad hoc donations. Important? Of course, but what charities, community groups and CICs, whatever their size, really is need is to convert these one-off gifts into regular donations. Direct Debits are the best tool for this (having overtake Standing Orders, that are more difficult to set up and easier to lapse), showing both a commitment from the donor and the opportunity to build a long-lasting relationship with who they are supporting. For the charity, it gives a confidence in an ongoing source of funds that boosts their ability to do good in the community they serve. Everyone is a winner!

---> If you would like to talk to Localgiving about how we support with Direct Debits (and Gift Aid) for your charity, community organisation or CIC, then click here. We work with thousands of groups just like yours every year and would love to chat to you about supporting your fundraising goals.