Tuesday, February 17, 2009

New Postal Rates Expected to Hurt Nonprofit Mailers

Yesterday's NonProfit Times reported that charities that use premiums to fundraise will soon -- once again -- be struck a powerful blow by the United States Postal Service.  With postal rates scheduled to increase effective May 11, the NPT is maintaining that nonprofit parcels and Nonflat Machinables (NFM) will bear the brunt of the rate increases, with percentage increases ranging from almost 10 percent to 50 percent.

The report states in part:

The United States Postal Service (USPS) Board of Governors released new postage increases that are set to take effect May  11. The new rates will be reviewed by the Postal Regulatory Commission (PRC) to ensure they are within the provisions of the Postal Act of 2006, namely checking that they are within the price cap for each class of mail.

The cap, based on the most recent 12-month average of the Consumer Price Index-Urban (CPI-U), was about 3.8 percent. Each class of mail can see price increases as high as an average of 3.8 percent, but can vary within each class. If the PRC were to find that the new prices were not set correctly, the Postal Services would adjust them.

The hardest hit postal classes will be Standard parcels and Nonflat Machinables (NFM), according to Tony Conway, executive director of the Alliance for Nonprofit Mailers (ANM), a Washington, D.C.-based coalition. He expects average percentage increases in those two categories to reach the upper teens, calling it a sign that the cost of the Postal Service processing and handling such mail remains high.

The NPT report also noted that some nonprofits were faced with massive double-digit postage increases when the NFM category was introduced two years ago.  The resulting increase in costs prompted some organizations to modify the size and shape of their mailings drastically. 

What will they do this time around?



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