Nonprofit Postage Hike of 2.5% Awaits PRC Approval

October 12, 2012       Mark Hrywna      

Charities can expect rates for nonprofit standard mail to rise by an average of about 2.5 percent next year.

The United States Postal Service (USPS) announced new pricing yesterday, which would go into effect on Jan. 27, 2013, pending review and approval by the Postal Regulatory Commission (PRC). The PRC now has has 45 days to respond to the USPS request for new rates.

Within the nonprofit standard category, there is some variation depending on automation and other factors, ranging from 2.4 percent to 4.1 percent. “There’s nothing in there that’s a real killer,” said Tony Conway, executive director of the Alliance for Nonprofit Mailers (ANM). For instance, the three-digit piece rate for letter will rise 4.1 percent and up 3.8 percent for five-digit automation. For flats, those automation rates are 3.8 percent for three-digit and 2.4 percent for piece rate, according to Conway.

First Class postage for single-piece letters will rise from the current 45 cents to 46 cents – an increase of about 2.22 percent.

The Postal Accountability and Enhancement Act of 2006 (PAEA) allows the USPS to raise postal prices annually within the rate of inflation based on Consumer Price Index (CPI-U). Any increase above that requires filing a special rate case with the PRC.

“It’s such a better system than the old system,” said Conway, because it allows for annual, predictable increases that are within the rate of inflation, whereas previously there were larger, unexpected rate hikes every few years. Now, even before USPS announcements of new rates, charities can keep an eye on the rate of inflation to get a sense of what postage hikes might be in short term, he said.

Postal rates for nonprofit standard class went up by an average 2.1 percent in January 2012. In April 2011, postal rates rose by an average of about 1.7 percent across the board. USPS tried to get a 5.6-percent average increase passed in July 2010 but the PRC ended up knocking down that request.