I think they will still despawn, no matter what. I believe they either despawn during a reset (of the mining world/nether/etc) or if you have too many mobs, you may have hit the mob limit.

Is there anyway that the despawning of animals can be turned off?

I purchased spawn eggs for sheep and I keep having my flock wiped out?  A little disappointing IMO.

Does it happen if you spent RL dollars on the spawn eggs or are those animals immune from the despawning?

thanks

I'm sorry you're having issues with the animal/mob spawning; we have simply reintroduced the system we originally had which then stopped working earlier in the year. The cap of animals per area has been reintroduced to prevent issues with large numbers of entities, the despawning is a part of this too. Animals will however not despawn if fed regularly, you have to keep actively feeding/breeding them or they will begin to despawn.

I'm currently away until the weekend but once back I'll have a look into some of the settings and find a nicer solution or make the despawning chance much lower.