Talking Back: Postal Rulings
How will the U.S. Postal Service’s proposed rule regarding the differences between a personalized standard-mail piece and a personalized first-class piece affect direct mail fundraising?
A new USPS proposal calls for an exclusive-purpose test in which a mail piece that contains personal information concerning an addressee would be eligible for standard-mail rates only if it meets new criteria. For example, one requirement would be for soliciting and advertising to be the “exclusive purpose of the mail piece.” The proposal could affect nonprofits that send joint fundraising and educational mailings; under the provisions of the rule, mailers would be required to send such mailings at first-class rates if they do not qualify. The Direct Marketing Association, the Alliance of Nonprofit Mailers, and mailers have filed comments opposing the new rule. If adopted, the USPS plans to implement the proposal on Jan. 1, 2005. In light of this proposal, FS asks fundraising professionals to weigh in.
Willis Turner, senior writer at direct marketing agency Huntsinger & Jeffer, Richmond, Va.: “Because of the high cost of direct mail, many nonprofits often include some educational component or call to action in order to jointly allocate the cost of the mailing between program services and fundraising. For most charities, this joint-cost allocation is an extremely important strategy, especially on more expensive, personalized appeals.
Joint costing, combined with the savings of being able to mail standard rate, enables many small- to medium-size nonprofits to keep their fundraising costs under control, so they can concentrate more resources on their charitable programs. Also, the nature of nonprofit fundraising is such that education and calls to action are often integral to the fundraising story. Sometimes, it’s impossible to ask people to contribute to a cause without explaining exactly what the organization does to further that cause.
If this USPS rule is taken too literally, it could potentially exclude nonprofits from ever being able to jointly allocate their mail costs. And that could deal a severe blow to their ability to make the best use of their donors’ charitable gifts.”
Ellenor A. Kirkconnell, assistant director, Alliance of Nonprofit Mailers, Washington, D.C.: “This new USPS rule flies in the face of our obligations under [accounting standards] AICPA SOP 98-2 and BBB Wise Giving Standards for Charity Accounting. Nonprofit development campaigns usually serve multiple purposes: to raise awareness, educate the public or to motivate action, for example. These multiple-purpose appeals are often the only contact a donor has with a charity and may be the sole impetus for giving. In order to allocate costs jointly among any program, fundraising and administrative expenses, the nonprofit must not include any personal information beyond the date, name and address of the recipient in the mailing — or we must mail at the first-class rates.”
Xenia “Senny” Boone, executive director of the Direct Marketing Association Nonprofit Federation, Washington, D.C.: “As you can imagine, the USPS has seen an increased use of personalization. What they’re trying to do is find a way to get their arms around this, so direct mailers can still use personalization and not get booted into the higher first-class rate. The [USPS] believes that the existing test is not sufficient, and what they’re trying to do is create a ‘bright-line’ test. … That’s where [the DMA] comes into conflict with the accounting standards. Many times [nonprofits] can’t have an exclusive purpose; they’re possibly educating or advocating in that mail piece. … The proposed rule is really leaving a lot to the discretion of the USPS at the local level to determine if that mail piece should go first-class rate or nonprofit [rate]. That’s a huge leap in rate for nonprofits. We don’t see a public-interest justification in the Postal Service’s articulation of its reasons for this new rule-making. We certainly don’t think [the USPS] was intending to hurt nonprofits as far as the accounting standards go, but it’s going to be a huge issue if the [USPS] sticks by this rule, because it will boot a lot of nonprofit mail into the higher rate, and that’s unacceptable.”