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The nonprofit mailing rate would drastically increase under legislation introduced by House Oversight and Government Reform Ccommittee Chairman Darrell Issa (R-CA) that is designed to prevent a bailout of the US Postal Service.
The bill also proposes to end rate preferences for national and state political committees.
Under Issa’s bill, dubbed the Postal Reform Act of 2011, the reduced postal rate for nonprofits - currently at 40% of Standard Mail – would gradually increase by 5% every year until it reaches within 10% of commercial rates. Issa’s plan also calls for mail classes that are perceived as not paying their costs, or “under water,” which includes nonprofits, to pay 5% above the Consumer Price Index cap.
Direct Marketing Association sr. VP Xenia Boone said that the DMA has been working on other postal funding, but “at least for the nonprofit community this is something new on the table. We’re not seeing where the justification is on this and why this came up.”
Boone said that such a “dramatic reduction” in the nonprofit postal rate would cause an organization, such as a charity, to “curtail its mission or programs,” and ultimately affect donors. The Postal Service “is the most successful channel” for fundraising organizations, she said.
Issa’s bill was introduced just a day after the USPS announced it would no longer fulfill its obligation to the postal employees’ retirement fund. In addition to the provisions effecting nonprofits, the bill creates an authority to restructure the Postal Service, as well as determining post offices to close down.
According to an analysis by DMA, “nonprofit mailers will eventually be asked to cover $1 billion of [retirement healthcare] payments annually while contributing less than 10% of total mail volume. As the growing federal deficit threatens government sponsored social programs, this added postage is a significant challenge to the nonprofit community as we identify increasing needs.” Details: www.nonprofitfederation.org.