General Ramblings: Personalization Problems

April 15, 2005       Paul Clolery      

Six nonprofit umbrella organizations with members that fundraise via the mail have banded together in an attempt to blunt new United States Postal Service (USPS) rules that could force charities to mail at the more expensive first class rate as of June 1.

The groups are trying to stall the implementation of the new personalized mail rules by using the USPS’s own poison, the mail. They want nonprofit mailers to send a personalized package to the USPS for approval, thus swamping the system. The next step would be litigation against the USPS, according to emails being passed between the leaders of the organizations and obtained by The NonProfit Times.

Leaders of the Alliance of Nonprofit Mailers, the Association of Fundraising Professionals, the Direct Marketing Association Nonprofit Federation, the Direct Marketing Association of Washington D.C., the Direct Marketing Fundraisers Association and the National Catholic Development Conference have all signed on to an alert for their members and the nonprofit community in general.

A set of USPS rule changes scheduled to take effect on June 1 could disqualify mailings from Nonprofit Standard rates if mailers use common and long-accepted techniques of mail piece personalization. The leaders claim in the email alert that even with just a few weeks to go before the new rules take effect the USPS has not answered some of the most obvious and basic questions about what the new rules permit and forbid.

What the leaders describe as a “regulatory train wreck” is the result of recent USPS efforts to “clarify” the longstanding rules governing the types of personalized information that can be mailed via Standard mail. For more than a century, postal law has required mail with the character of “actual and personal correspondence” to be entered as First-Class Mail, not Standard (formerly third-class) mail.

The phrase “actual and personal correspondence,” however, is a legal term and has never been considered to cover all information personal to the addressee:

  • It has always been understood, for example, that Standard mail pieces could include the specific name and address of the recipient, as well as the date of the mail piece;
  • Similarly, the USPS ruled in the early 1980s that specific information about a donor — including the donor’s previous purchases, pledges, donations, or donation history — would not be considered a bill, statement of account, or any other form of “actual and personal correspondence” if a mail piece also contained a solicitation for an additional donation;
  • Likewise, the USPS ruled in 1994 that a Standard mail piece could include the addressee’s account number, file number, polling place, congressional district, legislative district, school board district, election district, and precinct.

In April 2004, however, the USPS announced that advances in technology, including the widespread use of computers to generate letters customized for individual addressees, warranted “more explicit guidance” to mailers in this area.

In October 2004, the USPS published new eligibility rules to take effect on June 1, 2005. The revised rules, while written to “clarify” the existing rules, in fact alter them, according to the leaders of the mailers organizations. The most important new provisions allow “personal information” in a Standard mail piece only if all three of the following conditions are met:

  • The mail piece contains an “explicit solicitation” for a product or service for sale or lease, or an “explicit solicitation” for a donation;
  • All of the personal information is “directly related” to the advertising or solicitation;
  • The “exclusive reason” for including each item of personal information is to support the advertising or solicitation in the mail piece.

These restrictions immediately set off red flags among nonprofit mailers. While the new rules appeared to narrow the permitted use of personalized information, neither the rules nor the USPS notices of their promulgation gave clear definitions or, in several instances, any definition at all, of the terms “personal information,” “explicit advertising,” “explicit solicitation,” “directly related” or “exclusive reason.”

In response to requests from nonprofit organizations and other mailers for clarification of the new rules, the USPS issued several “Customer Support Rulings” (i.e., interpretive rulings) during the past few weeks. These rulings, rather than allaying the concerns of the nonprofit community, have inflamed them further. The leaders said they recognize and support the USPS’ efforts to protect the First-Class revenue stream — but are especially concerned about the new interpretations of a Customer Support Ruling affecting nonprofit organizations.

The USPS issued a revised version of Customer Support Ruling PS-262 last month that eliminated the safe harbor for information in a fundraising solicitation about the addressee’s previous donation, pledge, or donation history. Under the revised version of PS-262, information of this kind in a solicitation may be out of bounds if the USPS decides that the information is not “directly related” to the solicitation.

Another new Customer Support Ruling, PS 322, states that an acknowledgement of a prior donation in a fundraising solicitation may not contain the language, “keep this notice as a receipt for tax purposes.” Such language, the USPS asserts, would have an impermissible “dual use” as both a solicitation and a receipt.

The USPS was scheduled to provide a manager for an interview on the subject, but instead issued a terse statement through Jim Quirk, a USPS spokesman. “We do not anticipate the big shift between mail classes that some have postulated. The few nonprofits who consulted with us at the National Postal Forum about their mail pieces seemed to be satisfied that we had clear answers to their questions. Both our Pricing and Classification Service Center in New York and our Mailing Standards staff in Washington are fully equipped and ready to discuss mailers’ concerns and questions about any specific mailings they plan,” according to Quirk. He declined further comment.

One such meeting already took place and yet the nonprofit mailers remain conerned. Nonprofit mailers in the room contend that on issue after issue, the USPS officials suggested that personalization would be severely restricted.

According to the nonprofit mailers, the decisions would only be made on a case-by-case basis upon the submission of actual mail samples and further review.

The USPS made it clear that, at best, case by case decisions will be made by the USPS concerning the following matters:

  • Segmentation by age, gender, etc.: Segmented mailings of this kind may be forbidden on June 1 — even when the individual demographic segments would qualify for Standard rates if sent as separate stand-alone mailings;
  • Petitions and other issue advocacy material: You might be forbidden to identify the representative, the district, or the issue specific to their particular community or neighborhood, on the theory that this information is too personalized for Standard mail;
  • References to the addressee’s community: You may be forbidden to personalize your solicitation by identifying in the body of the letter the community or metropolitan area where the recipient lives — even though the specific city and specific street address of the recipient typically appear in the address block of the same letter;
  • Tax receipt, tax information: May you say “Keep this as a tax receipt” when you acknowledge a donation? Quite possibly not. Indeed, all references to “important tax information” (or variations on this theme) may be forbidden on June 1.

What’s next

USPS promised to respond promptly to requests for advance rulings on specific sample mail pieces. Since this was a “content-based” regulation, rulings can only be made by seeing the entire mail piece. Eligibility for mailing at Nonprofit Standard Rates will be based on the “context” of the personalization and its relationship to the solicitation. In other words, they have not provided substantive guidance in the form of clear definitions and language in the rule nor their Customer Support Rulings.

The leaders of the nonprofit umbrella groups s trongly urged members with any doubts about whether mail pieces will continue to qualify for Standard Mail Rates after June 1, to send one of them to the USPS classification office specifically assigned to answer these questions.

The contact is Greg Hall, USPS Pricing and Classification Service Center, 1250 Broadway 14th Floor, New York, N.Y. 10095-9599. The telephone number is (212) 613-8676. The fax is (212) 613-8752. The email is gregory.a.hall@usps.gov

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