Nonprofits Missing USPS Summer Discounts

July 20, 2009       Mark Hrywna      

More than 3,000 mailers of Standard letters and flats were to be eligible for a rebate program starting July 1, but few nonprofits appear to be taking up the offer from the Postal Service.

The Standard Mail Volume Incentive Pricing Program was approved by the United States Postal Service (USPS) Board of Governors and submitted to the Postal Regulatory Commission (PRC) on May 1 for review. The PRC received public comments until May 21 and had 14 days after that date to approve the measure. The PRC gave its approval on June 4.

About 3,250 mailers, or about 75 percent of Standard Mail volume, are eligible for the sale. Mailers who mailed more than 1 million Standard letters and/or flats from Oct. 1, 2007 through March 31, 2008 are eligible.

The sale will run July 1 through Sept. 30 and mailers will receive a 30 percent rebate on any mail volume in that period which is over the past threshold. Rebates will be adjusted if their October 2009 volume is less than their October 2008 volume. Mailers will pay full postage during the summer but USPS will determine the rebate each mailer is due after Oct. 31 and credit the permit account before Dec. 31.

USPS estimates an incremental revenue increase between $38 million and $95 million from new volume, with administrative costs of the summer sale close to $1 million.

While some nonprofits have been crunching numbers since early May to determine potential savings, others didn’t see a big enough opportunity to make the effort.

Tony Conway, executive director of the Alliance of Nonprofit Mailers (ANM), said some of his members examined the sale but realized it would require keeping other programs constant while substantially beefing up an existing summer program or creating a new summer program — neither of which seems appealing with such a short lead time.

If this year’s summer sale goes well, the Postal Service might try again next year, which would provide more adequate lead time for nonprofits to plan a summer program, Conway said. “It will require nonprofits thinking a little out of the box, but that’s the idea for all mailers,” he said.

Still, Conway said, the sale shows that the Postal Service is at least trying to do something about boosting volume. “This is a step in the right direction. They need to be thinking differently than they have the last 200 years,” he said.

Volume dropping off in the summer months has been going on forever and mailers have been suggesting for three years to do something about incentivizing volume for those months, according to Conway. Given the dire financial shape of the USPS, Conway said, it needs to start doing something. If it works well, the USPS might look to expand it to other lower-volume times of the year in the future, he said, like January.

Mailing campaigns typically are planned months in advance, so to put together something that quickly will be tough, Conway said.

That’s one reason why Catholic Relief Services passed on the incentives.

Jean Simmons, director ofannual giving at the Baltimore-based organization, didn’t want to plan mailings around “possible discounts” since the rebates were no solidified as of May. St. Jude Children’s Research Hospital in Memphis plans to take advantage of the postal sale but still was quantifying the impact of potential savings by Memorial Day, according to Brian Cowart, senior director of direct mail donor acquisition and cultivation.

The American Society for the Prevention of Cruelty to Animals (ASPCA) lucked into the incentive program. The New York City-based organization had planned to ramp up its acquisition program this year by almost a third, from 17 million pieces in 2008 to 22.5 million. How much that might save remains to be seen, but the ASPCA will mail more this summer regardless of the postal sale, said Steven Froehlich, director of development analytics.

The sale looks appealing because there are three cost to mailing, and with paper and printing costs down all year, Froehlich said, that leaves postage as the only cost not dropping. “If postage comes down…you don’t need to make up for a big decrease in poor performance. That’s been what’s so appealing about DRTV the last 18 months,” he said. At the same time, nonprofits tend to avoid mailing much in June, July and August because it is a risky time of year.

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This article is from NPT Weekly, a publication of The NonProfit Times.

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