USPS Calculation of 60% Ratio of Nonprofit to Commercial

October 10, 2017

The law requires the US Postal Service to ensure that the revenue per piece it receives from the customers who use Nonprofit Marketing Mail equal 60 percent of that received from commercial users of Marketing Mail. This is a matter of public policy to encourage charitable giving, similar to the tax deductibility of contributions and the tax exemption of qualified nonprofits.

With the table below, we can see how USPS arrived at the 60 percent target for Marketing Mail in its proposed January 21, 2018 pricing increases. Interestingly, the Postal Service raised nonprofit letters’ rates an average of +4.381 percent, and lowered nonprofit flats’ rates an average -3.660 percent. The comparable changes for commercial are both increases: letters + 1.660 percent and flats + 3.370 percent.  We do not yet know why the USPS is proposing the 7 percentage point difference between commercial and nonprofit flats rate changes, and the 2.7 percentage point gap for letters’ price increases.

We will provide more information about the rate changes as it becomes available. A PDF of this chart is available here.