STANDING ORDERS VS DIRECT DEBITS


Regular donations provide charities with a consistent, predictable income, so you can plan and budget better and therefore be more efficient.

When thinking about setting up regular giving for your donors, standing orders may come to mind. 

While this is one way of getting regular donations for your charity, too often standing orders are mistaken to be the same as Direct Debits.

We break down the differences between the two, and with CAF Donate, we'll show you just how easy managing Direct Debits can be.  

1   THE FUNDAMENTAL DIFFERENCE

Standing order 

Standing orders can only be set up by your donors. They give an instruction to their bank to pay you a fixed amount at regular intervals.  

This means that the time it’s takes to set this up before you start receiving donations depends entirely on them.

Your donors will choose the amount and frequency. They can also change or cancel it without notifying you, which could unexpectedly impact your plans and budgets.

Direct Debit

With Direct Debits, your donor authorises you to collect the donation from their bank account. Your charity will be able to control the set up of payments on behalf of donors so you can start receiving donations quicker.

CAF Donate allows you to provide a variety of donation amounts and frequency of payments that your donors can choose from. We’ll notify you automatically if a payment fails or is cancelled.


Find out more about CAF Donate 

2   ADMIN INVOLVED

In comparison to Direct Debits, receiving regular donations via standing order can be a huge admin burden for charities. Here’s why:
 

Standing order

With no notifications from banks when a payment is made, or if a payment fails to come through, you have to make sure you check your charity’s bank account regularly. 

While this is manageable on a smaller scale, it can be a very time-consuming process when managing several regular donors. 

With standing orders, you may not always be able to tell who the money came from, making it harder to claim Gift Aid.


Direct Debit

CAF Donate will send you a notification when a payment is made, if a payment fails and re-submit the payment so you don’t have to chase up customers to do so.

The bulk upload feature means you can create up to 50 new Direct Debits at one time.

And to save even more time, CAF Donate validates the payment information you enter in real-time, so you will know if there are any errors in the account details you've entered straight away. 

Find out more about Direct Debits with CAF Donate

3   COSTS AND SET UP

Standing order

You don’t need to worry about registering with any banks or providers to receive standing orders, as your donor will set these up themselves. You may have to pay a small transactional fee on each payment which can vary across banks.

Direct Debit

If you choose to become a Bacs Direct Debit Bureau you will need to apply to your bank’s scheme or work with an approved provider like CAF Donate.

This can be very time consuming, and with high street banks charging transaction set-up and licence fees which vary by provider - it can be quite expensive too. However, setting up Direct Debits doesn’t have to empty the kitty.

A simpler and more cost-effective solution is to use the Direct Debit feature in your CAF Donate account. You can start accepting Direct Debit payments right away. And with a small fee transactional fee (2% of the gross donation) which is capped at £5, you can get more from each donation. 

Find out more about our pricing. 

 

4   FLEXIBILITY

Standing order

Payment amounts set up via standing orders are fixed. This means that if donors want to make a change to their regular donation amounts, they will need to cancel the existing standing order and set up a new one.

Once again, the time it will take to do this will depend entirely on the donor.

Direct Debit

With your charity managing Direct Debit payments, you can make changes to your donor’s donation amounts on their behalf.

CAF Donate allows you to amend existing Direct Debits, upload new ones and cancel Direct Debits all in one place and on the same day.

5   REPORTING

Standing order

As standing orders are set up by donors with various banks, putting together reports on your standing order payments can be a laborious trawl through your charity bank account statements.

Direct Debit

You can download all your Direct Debit donations data with CAF Donate’s customisable reports. Simply enter the date range you would like to see data from and access your donor information including Gift Aid status.

And to get the most from your fundraising, you can compare regular giving across all your campaigns set up on CAF Donate to see the popular channels for donating.

Sign up to CAF Donate for free

6   REGULATION

Standing order

You don't have to worry about regulatory statements, as the standing order will be set up and managed by the donor with their banking provider. 

Direct Debit

Putting together the correct legal wording when setting up Direct Debits can be a daunting prospect for many charities.

Fortunately, CAF Donate provides mandatory regulatory information, such as data protection and Gift Aid statements in pre-existing templates, so you don't have to bog yourself down with legal jargon. 

new pound coins

Charities

Get more regular donations

Turn one-off donations into regular giving with CAF Donate's ready-to-use Debit Debit processing service

Get started with CAF Donate