Nonprofit Mail Numbers Decline

January 15, 2005       Clint Carpenter      

Confusing U.S. Postal Service (USPS) regulations and the emerging popularity of email are two of the reasons experts gave for a drop in the amount of snail mail that charities sent out during the Oct. 1, 2003 to Sept. 30, 2004 fiscal year. However, the USPS contends that its regulations are “no more complex than in previous years” and that the decline “was rather trivial.”

According to the USPS’ annual Revenue, Pieces, and Weight report, the amount of mail sent out via the Special Nonprofit rate decreased 5 percent from 1.948 billion pieces in the 2002-03 fiscal year to 1.850 billion pieces in 2003-04. Total aggregate nonprofit mail, which includes Special Nonprofit rate, Nonautomation Presort, Automation Presort and Nonprofit Enhanced Carrier Route was down 0.6 percent from 14.527 billion pieces in the 2002-03 fiscal year to 14.441 billion in 2003-04. “This does not seem to suggest either a major decline or a negative trend in aggregate volume,” said Ashley W. Lyons, manager of pricing for the USPS.

Neal Denton, executive director of the Washington, D.C.-based Alliance of Nonprofit Mailers, speculated that a confusion regarding postal regulations has caused charities that might be eligible for the Special Nonprofit rate to instead use First Class. He added that nonprofits are also turning to electronic mail to avoid postal rate increases.

“There are quite a few nonprofits that have moved into First Class because of confusion, especially when it’s personalized mail,” Denton said. In mid-2004, the USPS issued a clarification on what constituted “personalized” direct mail saying, at the time, that it would enable nonprofits to better understand what types of material could be sent with the less expensive Special Nonprofit rate and what had to be sent via the more expensive First Class.

“The redesign of the Domestic Mail Manual during the last two years was done to help smaller volume mailers, which include many nonprofits,” Lyons explained.

Sherry Minton, director of direct mail for the American Heart Association in Dallas, said the association has been suffering from extended delivery delays of its Special Nonprofit rate mail, particularly during August and September. While the delays have not forced it to send its mail via the more costly First Class, it has resulted in a 6 percent decrease in anticipated donation revenue. “We won’t meet our financial goal this year because of the delays,” she said.

Many nonprofits are being hit with mail delivery delays, said Senny Boone, executive director of the Nonprofit Federation of the Direct Marketing Association in Washington, D.C. “We recently conducted a poll and of those responding found that 64 percent reported deliveries from eight to 14 days in Automation Presort and 13 percent reported 15 to 21 days,” Boone said.

For NonAutomation Mail, 43 percent reported delivery times from eight to 14 days and 30 percent from 15 days to 21 days. The USPS has no set service standards, Boone explained.

The decline in direct mail being sent will continue, Denton said. “Next year, we will be hit with a sledge hammer as the postal service increases its rates in the first quarter of 2006. It will have a dramatic impact on direct mail and the fundraising community.” The increasing cost to send mail will mean a lower return on investment for charities, Denton explained.

Minton said the association, which sends out approximately 100 million pieces of mail per year through the Special Nonprofit rate, will be forced to scale back its mailings if there is a significant rate hike. “We’d be happy with a single digit rate hike,” Minton said. But, Denton said he is hearing that it might be a double-digit increase.

Boone said that she, too, has been hearing that the USPS will be asking for a double-digit increase in the Special Nonprofit rate. “It will be a huge hit, if it’s approved,” she said.

It’s time for nonprofits to be unified and focused and work to keep any rate hike to a minimum, Boone said. “We must all focus in on this issue,’ she added.

Increasing costs of mail and the added impact of increased paper costs has nonprofits scrambling to find other means to communicate with donors and potential donors, Denton said. The solution, or at least part of the solution, Denton said, is the Internet.

Many charities are now using email to supplement their direct mail and in some cases supplant some direct mail.

“Mailers are looking to communicate with their donors and prospective donors via email, particularly through electronic newsletters,” Denton said. Rather than paying the high cost of paper, some nonprofits are sending newsletters and periodicals over the Internet.

Meta Brophy, associate director of publishing operations for the Yonkers, N.Y.-based Consumers Union, which publishes Consumer Reports magazine, said email has been a “huge success for us.” It has become so successful that Consumer Reports is online, something many readers say they like even more than getting a print version. “It lends itself well to the Web,” she added. Readers can go back to issues online to read past articles, without having the clutter at home that would go along with saving issues. “We’ve done tests and it really works great for us,” Brophy said.

Consumers Union also cross markets its magazine, she said. When someone subscribes to the print version, they receive a card offering them the opportunity to subscribe to the online version at a reduced rate. In addition to putting its magazine online, Consumers Union sends its regular newsletter electronically.

Minton said the American Heart Association is just beginning to explore the benefits of using electronic mail. “We are starting to use it to supplement our direct mail, but it will not replace it,” Minton said. Yet, if the postal services gets a double-digit rate increase early next year, the association might begin to make more use of it, she added.

Denton said he sees the move by nonprofits away from postal direct mail to alternate mediums to get their message out, as “an alarming trend.” It will disenfranchise all of the people who do not have electronic access, he said.

The USPS doesn’t seem concerned. “Nonprofit mailers can use, and have been using, email and other Internet forms of communication to reach their intended audiences,” Lyons said. “We expect that use of electronic forms of communication by nonprofit organizations will continue to grow, at least for the foreseeable future. Growth in these alternate forms of communication does not necessarily signal an erosion of direct mail as a useful and cost-effective means for nonprofit organizations to reach their audience. There is room for both channels.”

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