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Charities Facing Major Rate Increases for Front-End Premiums and Cards

(March 5, 2007) The United States Postal Service (USPS) has proposed a new standard rate Not Flat-Machinable (NFM) category that could subject charities to mailing rate increases of 100 to 400 percent for front-end premiums and cards, according to the Direct Mail Association Nonprofit Federation (DMANF).

The proposal affects all nonprofits that use front-end premiums—those that include a rigid piece or lumpy mail containing a medallion, candle, flags, etc., as well as greeting cards. If the USPS board of governors approves and finalizes the proposal, all rectangular Nonprofit Standard mail could be treated as either an NFM or as a parcel, meaning much higher rates for these pieces starting in May 2007.

The DMANF is asking charities to send letters to the USPS board of governors detailing how the proposal would affect their organizations and programs and requesting a delay in the implementation of the proposal

To review the rates, which depend on sorting levels and any discounts organizations may qualify for, go to the USPS’s website at www.usps.com/ratecase.

Highlights of the Proposal

Letter-size pieces may weigh up to 3.3 ounces. If they are more than 3.3 ounces and are prepared as nonmachinable letters, they must be marked as “Not Flat-Machinable” or “NFM” and pay the higher rate, unless they are barcoded and eligible to be mailed as automation flats.

Flat-size pieces must be rectangular, flexible and uniform in thickness. Boxes and box-like pieces are not flats. Tight envelopes that are completely filled to form box-like pieces are not flats. This change will affect those sending greeting cards as front-end premiums.

Testing Flats to Determine Flexibility

  1. Place piece with the length parallel to the edge of the flat surface and extend the piece halfway off the surface.
  2. Press down on the piece at a point 1 inch from the outer edge, in the center of the piece’s length, exerting steady pressure.
  3. The piece is not flexible if it cannot bend at least 1 inch without being damaged.
  4. The piece is flexible if it can bend at least 1 inch without being damaged and it does not contain a rigid insert. No further testing is necessary.

If the piece is a flat 10 inches or longer that passes the flexibility test but contains a rigid insert:

  1. Place the piece with the length perpendicular to the edge of a flat surface and extend the piece 5 inches off the surface.
  2. Press down on the piece at a point 1 inch from the outer edge, in the center of the piece’s width, exerting steady pressure.
  3. Turn the piece around and repeat steps 1 and 2. The piece is flexible if both ends can bend at least 2 inches without being damaged.

If the piece is less than 10 inches long that passes the flexibility test and contains a rigid insert:

Place the piece with the length perpendicular to the edge of a flat surface and extend the piece one-half of its length off the surface.

  1. Press down on the piece at a point 1 inch from the outer edge, in the center of the piece’s width, exerting steady pressure.
  2. Turn the piece around and repeat steps 1 and 2. The piece is flexible if both ends can bend at least 1 inch without being damaged.

Uniform Thickness

Flat-size mail pieces must be uniformly thick so that any bumps, protrusions or other irregularities do not cause more than ¼-inch variance in thickness. Exclude the outside edges of a mail piece (1 inch from the edge) when determining variance in thickness. Mailers must secure contents to prevent shifting of more than 2 inches within the mail piece.

Mail pieces that do not meet the standards above must pay the new Not Flat-Machinable rate or the Parcel rate. The rates are much higher for the NMF and even higher under the parcel rates.

Letters to the Board of Governors

The Postal Rate Commission issued its recommendation to the USPS board of governors on Feb. 26, 2007, agreeing that the new rate category should move forward despite insufficient cost data. The board is expected to issue its decision shortly.

Organizations are strongly encouraged to send a letter to the USPS board of governors as soon as possible to urge the board to delay the new proposal for one year so that mailers have an opportunity to test their mail pieces against the new standards. A sample letter is below. Please email copies of your letter to paffairs@afpnet.org.

AFP would like to thank the DMANF for its leadership on this issue.

Sample Letter

James C. Miller III, Chairman
Alan C. Kessler, Vice Chairman
Board of Governors
United States Postal Service
475 L’Enfant Plaza, SW
Washington, DC 20260

We are writing to you on an urgent matter that affects nonprofits across the nation, including the [NAME OF ORGANIZATION].

The United States Postal Service’s recent reclassification proposal includes new requirements that will force nonprofit organizations into the higher Not Flat-Machinable rate or the Parcel rate category in just a few weeks.

The shift from automated letters and flats to NFM and parcel rate categories affects the mail pieces that traditionally have generated one of our core revenue streams. Without time to plan, the huge rate increases—more than twice current rates—will price our control packages out of the mail stream.

Between the time the new rate schedule is finalized and postal management’s target May 6 implementation date, there will not be sufficient time for us to redesign the traditional control mail piece and test alternatives. Redesign and testing is the only way for us to develop substitute solicitation packages that satisfy the new mailing standards for automation letters and flats rates.

Nor will there be sufficient time to test new mail-piece designs in time to roll them out for the all-important holiday mailing season. Greeting cards used as front-end premiums generate donations that sustain our nonprofit organization throughout the year.

Compared to other fundraising techniques, the front-end premium performs particularly well when it is used to prospect for new donors and allows us to continue our mission to…(PLEASE GIVE SOME EXAMPLES)

Failure to allow time to plan will not only affect our outbound prospect mail, but also will result in less First Class Mail, already an endangered class of mail. That is because when an addressee decides to contribute, he or she sends a gift back via First Class Mail. As a result, cutting outbound prospect mail volume also will reduce inbound First Class Mail.

We are already concerned about the nonprofit postage rate increases for automation flats. If a box is required to protect the premium, we will have to pay either the new NFM rate or the even higher parcel rate, both huge increases in postage as proposed by the Postal Service that could be between a 100 percent to –200 percent increase for our organization. Meanwhile, the USPS states that the cost of a stamp will be at or below the rate of inflation for a typical household.

We respectfully ask that the board grant us the time to redesign and test new substitute mail pieces that will qualify for rates that are more affordable than the 100 percent to 200 percent higher NFM rates. It is unconscionable to seek such drastic rate increases as our nonprofit faces more needs with less resource.

It takes time to design new materials, new packaging, and new premiums and to test them on postal management’s new automated flat sorting equipment. It takes time to make refinements and retest where necessary. Then it takes time to test the new packages with donors and prospects in order to determine if the new packages and the new premiums will generate the returns necessary in order to roll out the redesigned solicitation pieces.

We therefore respectfully request that the USPS’s proposal be delayed for at least one year, and that the rate for the NFM be drastically mitigated in the event that we have no other options.

Respectfully submitted,

4300 Wilson Blvd, Suite 300, Arlington, VA 22203 • 703-684-0410 | 800-666-3863 | Fax: 703-684-0540
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