March 30, 2015
It is a well-known fact within the nonprofit community that many, if not all, nonprofits depend on the United States Postal Service for their very existence. For many, the mail is the lifeblood that funds the critical missions that nonprofits pursue. While other segments of our society have drawn much focus for moving away from hard copy mail, the continued reliance on mail by nonprofits doesn’t get much attention. Getting even less attention is the fact that the Postal Service equally relies on nonprofits for its continued survival as a treasured government-owned and run institution.
There are several ways that nonprofits depend on affordable, reliable postal mail. First, they ask for support, both monetary and nonmonetary, through direct mail that often is completely integrated with multi-channel campaigns. Many find that dropping or even reducing the mail component of a campaign reduces its effectiveness well beyond the cost of the mailing.
Second, many nonprofits receive a large portion of their donations, membership dues, and subscription payments via First Class Mail. Many pay for business reply mail, and some even put prepaid postage stamps on their reply envelopes to boost response rates. And nonprofits that rely on the mail closely monitor the timing and number of response envelopes they receive back.
Third, quite a few nonprofits publish magazines and newsletters that are distributed through the mail. While it may be obvious that these publications are important membership benefits and vehicles to communicate about a nonprofit’s cause, it is less well known than many nonprofits can trace the majority of their financial support to those who subscribe. Clearly, driving nonprofits out of the mail would gravely damage their ability to communicate with their broad networks and continue fulfilling their missions.
There also are very good reasons the Postal Service depends heavily on nonprofit mailers. First, it is a network operation that relies on volume to continue to operate as a universal public service provided by the government. Daily delivery to the continually growing number of addresses in the U.S. causes a high and growing fixed cost that needs volume to fund it. Lately, with the defection of types of mail such as personal correspondence and bill payments, the postal network has been going through a painful adjustment to lower volumes. When it has an important customer segment like nonprofits, it behooves the USPS to keep that segment in the mail, and even to try to grow its volume.
Second, the Postal Service needs to draw content that is interesting, useful and desired to its consumers’ mailboxes. Without such content, the public policy rationale for a government-run monopoly service will quickly erode. Already, we see in our personal lives a growing number of people who do not open their postal mailboxes on a daily basis.
Third, the main growth opportunity available to the USPS, package delivery tied to online commerce, relies on mail volume to keep the daily delivery network going in order to compete with FedEx, UPS, and others. Without healthy mail volume the Postal Service cannot compete for packages.
Why focus on the symbiotic relationship between nonprofits and the United States Postal Service now? Well, the Postal Service recently filed a rate increase proposal with its regulator that seems as though its leadership doesn’t want nonprofit publications to stay in the mail. The proposal has unexpectedly turned into a potential disaster for Periodicals, with the mail class experiencing the widest range of price changes in years, a 24 percentage point range of -8 to +16 percent. Some of the largest increases will fall upon nonprofit publications, including such iconic titles as Consumer Reports, National Wildlife, Elks Magazine, Ranger Rick, Guideposts, On Health, Money Adviser, and others. These publications, which are relatively light-weight and have little or no advertising content, face postage cost increases of as much as 16 percent – eight times the increase of the two percent CPI cap. Nonprofits affected by these increases already are considering phasing entire titles out of the mail or, at a minimum, reducing their frequency.
A ray of hope rests in the regulator’s return of Periodicals and other rates back to the Postal Service for corrections unrelated to rate shock. This will delay implementation beyond the planned April 26, and give the Postal Service a chance to address the disconnect between its proposed prices for nonprofit publications and the business and public policy imperatives that it keep these magazines and newsletters in the mail. The Alliance certainly urges the Postal Service to do the right thing and use its authority to bring the range of periodicals price changes into a more reasonable range around the average. Keep some of your best customers in the mail.