Fundraisers Must Protect Nonprofit Mail Discounts, Charitable Tax Breaks

During the Nonprofit Organization of the Year Award Luncheon at the 2011 New York Nonprofit Conference last Wednesday, the talk prior to the Human Rights Campaign accepting the honor centered around the measures to eliminate nonprofit mail discounts and restrict charitable deductions.

As you know, Rep. Darrell Issa proposed a bill to reduce the current 40 percent USPS discount that nonprofits have been getting since 1951 by 5 percent a year for six years, until the discount is at just 10 percent. While it is certainly true that the USPS needs to find a way to stop its financial bleeding, this proposal could cripple direct-mail fundraising as we know it.

Already, due in no small part to the ongoing recession, many nonprofits have had to scale back their direct-mail efforts. Many simply cannot afford to mail at the same rates they have in the past. Ultimately, that hurts fundraising, because despite the rise in new communications technologies, direct mail still brings in the most dollars. But the less fundraisers can mail, the less dollars they'll conceivably bring in.

Further, reducing the discount may not actually increase the USPS revenue, which seems to be the bill's biggest intention. The reasoning is simple: Mailing will become even more costly for nonprofits, so naturally many will reduce their mail volumes even more.

I won't pretend to be an economics or mail expert, but this seems like a lose-lose situation. Less mail means less business for the USPS, and the results could be devastating for direct-mail fundraising, and fundraising as a whole, in the U.S.

The same goes with the talks of restricting charitable tax deductions. One of the biggest benefits — for better or worse — to many philanthropists is the ability to write off those gifts tax-free. Taking away that ability could hinder fundraising even more, meaning all these great organizations doing so much good will have even less dollars to carry out their programs and fulfill their missions.