Nonprofit Cooperative Postal Rule Takes Effect

Despite opposition from several ranking Democrats, the U.S. Postal Service’s new nonprofit cooperative mailing rule took effect Nov. 13.

Rep. Henry A. Waxman, Sen. Joseph I. Lieberman, Rep. David R. Obey and Rep. John W. Olver wrote to postal Board of Governors chairman David Fineman and Postmaster General Jack Potter urging them to reconsider the rule.

“While other government agencies are increasing consumer protections, the postal service is moving in the opposite direction, in effect inviting unscrupulous marketers to flock to the mail,” said Waxman in the joint letter.

The Alliance of Nonprofit Mailers also has expressed opposition to the rule, which executive director Neal Denton said “essentially makes it legitimate for commercial fundraising firms that are more concerned with their own bottom lines than with helping any charities” take advantage of the USPS’ nonprofit rates.

At deadline, the USPS had not yet drafted replies to the letter “because the person charged with doing that was out because of emergency surgery,” said USPS spokesman Jerry McKiernan. He did not specify when the replies would be written. “Besides, the Alliance of Nonprofit Mailers is deliberately distorting this issue to get more members.”

Denton dismissed McKiernan’s comments as little more than a personal attack. “Obviously, Congressman Waxman and the others took this issue seriously enough to write the letter,” said Denton.

Not all industry groups agree on this issue.

“We think the rule is a good one because it gives small charities which may not have the resources to run their own fundraising campaigns the ability to do so,” said DMA spokesman Louis Mastria, noting that the association will release its own guidelines on compliance with the rule by the end of this year.

Under the new rule, commercial fundraising agencies may contact nonprofit executives and offer to put up the money to pay for postage, printing and creative for a new mailing package. In return, the agency gets an exclusive contract that gives it solo rights to raise money for that nonprofit.

Denton pointed out that expenses, fees and commissions are paid out of the account and that the nonprofit gets what’s left.

“If the mailing doesn’t generate sufficient revenue, the commercial fundraising agency retains the right to continue mailing fundraising appeals until they are satisfied with their take,” he said.