Tuesday, March 22nd, 2005

News Updates

New USPS Rules Threaten Huge Postage Costs for Nonprofit Mailers

The item below was written by Neal Denton, executive director of The Alliance of Nonprofit Mailers, Washington, D.C. Some items were included by NPT staff.

The United States Postal Service (USPS) is implementing a final, new eligibility rule on June 1. The new rules govern what is considered "personal" mail content and thus must be mailed at First Class postage rather than Standard postage rates. For many nonprofit fundraisers, educators, and those that use the mail to communicate with constituents for any purpose other than fundraising, the subtle changes to the new rules are very significant.

These final rules were developed from the fight that went on more than a year ago, when USPS rules flew in the face of accounting rules SOP 98-2 for how charities allocate costs between fundraising and education. Charities face a Hobson's Choice -- adhere to accounting rules and get nailed by the post office, or don't adhere and get hammered by the rating agencies.

If you include any data fields in your mail piece other than name, address or date, your mail piece is subject to the new interpretations. That includes:

• Contribution levels;

• "Member" or "supporter since";

• Specific fields relating to constituent participation in walkathons, volunteer programs, church committees, etc.;

• Alumni information such as year of graduation, type of degree, etc.

Anything other than name, address or date will be considered "personal" by the USPS and, subject to the new interpretation, must contribute directly to a solicitation and have no other purpose.

There are three important realities to understand:

• Your mailing might have been perfectly appropriate and in compliance on May 31. However, new interpretations could make you subject to First-Class rates on June 1.

• You might not even know that you owe the difference between First-Class and Standard rates (could be more than 25 cents per one-ounce piece) until USPS classification officials send you an after-the-fact revenue deficiency notice. At that point the piece has been mailed and you have no options but to pay or sue.

• Most nonprofits will not review the rule changes or suspect any problems with mailings until they are served with a revenue deficiency notice.

Have you had a chance to look over your mailings and determine if they'll be eligible for nonprofit rates on June 1? A good place to begin is the Alliance Web site at www.nonprofitmailers.org/tools/page3d-g.html. That page reviews the process conducted by the USPS and has the latest version of the rules and the very important "customer support rulings" that drill down into the specifics of mail piece design and the actual content that will be allowed to maintain preferred postal rate status.

Most frustrating is that the USPS is "clarifying" whether mail pieces containing personal information may be mailed at Standard Rates and what must be mailed at First-Class -- without really ever defining personal information. The only definition that is the one listed above: Anything other than name, address or date might be considered "personal" and subject to the new interpretation. Under the final rule, any personal information must be used to support only the solicitation material in the communication -- with no regard for the primary purpose of the nonprofit or basic principles of direct mail fundraising.

From now until June 1, there remain many questions about the rule and its impact on organizations. Will mailers be able to use "personal" information about members in renewal letters and other communications that aren't solicitations? Who determines when "personal" information that is included as part of the solicitation might have an "additional use" to the recipient? The USPS will be looking for indications of more than one use for any "personal" information included in the mail piece -- explicit or implicit.

Because the USPS is insisting that the mailer must not identify any further uses for the personal information; leave that to the recipient. For example, don't say: this is a "receipt" or this in an "invoice." The USPS considers those to be First Class material.

The only way to be certain that a mail piece remains eligible for Nonprofit Standard rates seems to be to submit the entire piece to the new national Pricing and Classification Service Center (PCSC) in New York. To learn more about this USPS offering, contact Greg Hall at (212) 613-8676. A complete listing of contact information for the PCSC and the district business mail entry offices is available in DMM 58, section G042, on the USPS Web site at http://pe.usps.gov/.

Copyright © 2006 The NonProfit Times.