Postal Rates Set to Drop–The NonProfit Times

Nonprofit Times

 

Postal Rates Set To Drop

By The NonProfit Times – February 8, 2016

The United States Postal Service (USPS) released adjusted rates on Friday, highlighted by a decrease from 49 cents to 47 cents for first-class mail stamps, to kick in once a temporary exigent surcharge on postage runs out.

Absent congressional or court action to extend or make the surcharge permanent, Stephen M. Kearney, executive director of the Alliance of Nonprofit Mailers, anticipates that rates will change in April. USPS will provide at least 45-days notice prior to the switch. Kearney said that he respects each nonprofit’s budgeting process, but has advised organizations to mail more as opposed to pocket savings.

“When they do ask me, and a number of them have asked me, I recommended keeping the money in their budgets and, if and when rates go down, to use some or all of the money to mail more,” Kearney said.

The surcharge was first applied for by the USPS in 2010 and went into effect in January of 2014. The national recession was cited as reason for breaking the postage price cap established by Congress in 2006, Kearney said. A 4.3 percent surcharge, capped at $4.6 billion, was approved by the Postal Regulatory Commission after much back and forth.

USPS has worked to make the surcharge permanent, appearing before the Senate Oversight Committee on Jan. 21, according to Kearney. Efforts are not anticipated to be successful, leading to cost reductions including:

  • Postcard stamp costs dipping from 35 cents to 34 cents;
  • First-class two-ounce letter postage rates moving from 71 cents to 68 cents;
  • Three-ounce letter stamp prices sliding from 93 cents to 89 cents;
  • Per-ounce additional rates decreasing from 22 cents to 21 cents; and,
  • Flat postage down across the board from 98 cents for one ounce and $3.62 for 13 ounces to 94 cents for one ounce and $3.46 for 13 ounces.

The surcharge had provided USPS roughly $4.3 billion as of Jan. 31, Kearney said, with about $377 million to go. At a $6-million-per-day rate, Kearney anticipates postage costs changing on or around April 10.

Mailers will save an estimated $2 billion annually overall with the reduction. It is not known what portion of those savings will go to nonprofits. Organizations continue to rely heavily on direct mail, Kearney said, with some nonprofits also mailing magazines and newsletters.

Alliance members have told Kearney that they intend to mail more in an effort to drive more gifts with more message to donors. “We actually think this will give a boost to the Postal Service and it will help nonprofits by giving them the ability to mail more and generate more contributions,” Kearney said.