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Postal rate increase could cripple direct mail programs

Could your nonprofit’s direct mail program survive a 40% increase in postal rates?

That may seem like a wild “what if” scenario, but the Postal Regulatory Commission (PRC) is recommending a new pricing structure that could lead to dramatic increases in the cost of mail. The PRC announced this proposal in December with the goal of helping to shore up the long-term stability of the U.S. Postal Service (USPS).

This proposal should be on the radar of every nonprofit organization involved in direct mail, and urgent action is needed by Feb. 3. In this article, we’ll review some background on the issue, why it matters and what you can do about it.

HOW WE GOT HERE

Under the current rules, the pricing structure for “market dominant” products – like direct mail – is connected to the Consumer Price Index (CPI). Basically, as prices for consumer goods go up, the cost of mail increases as well – with a cap in place to prevent unexpected costs.

In Docket Number RM2017-3, the PRC is proposing a new pricing structure that would allow rates to surpass the CPI. With no cap in place, the USPS could increase prices dramatically.

The PRC tried a similar proposal in 2017, but hundreds of groups in the nonprofit sector and mailing industries resisted by submitting comments. Two years later, the PRC says they have taken those comments into consideration with their new proposal.

However, the Alliance of Nonprofit Mailers says this new proposal “looks much like the first.”

WHY THIS MATTERS

Based on this complex new formula, costs could go up as much as 40% in the next five years as the USPS seeks to make up for the billions of dollars it’s losing annually due to the pre-payment of employee retirement benefits.

This could have a dramatic impact on the ability of nonprofit organizations to raise money through donations. While digital marketing is expanding rapidly, direct mail is still the backbone of so many direct-response marketing programs.

Higher postal rates will mean less mail, which would lead to fewer donations to nonprofits. Fewer donations would mean fewer meals provided for the hungry, fewer children cared for in hospitals, fewer animals rescued, fewer homeless receiving the help they need, and so much more.

It could also have the unintended effect of bringing more harm than help to the USPS. If enough organizations reduce the amount of mail they use, it could bring in less revenue for the Postal Service.

WHAT YOU CAN DO

Much like two years ago, you can get involved by letting the PRC know how this price increase will affect your nonprofit organization. Groups like the Alliance of Nonprofit Mailers, the ANA Nonprofit Federation and The Nonprofit Alliance are urging nonprofits to join together in resistance.

We’ve submitted our comments, and we urge you to join us. The PRC provides participation details here, and there are two ways to make your voice heard:

  • Mail a letter to the PRC (and be sure to reference Docket RM2017-3).
  • Apply for a temporary account online and submit your comments.

But you need to act quickly. The deadline for comments is Feb. 3.

Access your letter template!

Andrew Laudano

Andy Laudano has more than 25 years of fundraising experience working for both agencies and nonprofit organizations. As Senior Vice President, Client Service, at RKD Group, he manages integrated, multichannel direct response fundraising programs for large, national organizations and regional nonprofits. Andy speaks frequently at DMA Nonprofit Federation and AFP Conferences, the FundRaising Success Engage Conference and webinars, and has served on the education committees of the Bridge Conference and the DMA Nonprofit Conference.

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