U.S. Senate Passes Postal Reform

The United States Senate voted yesterday to pass the Postal Reform Act. The bill will now be sent to the House of Representatives where it awaits an uncertain fate.

As reported by The Washington Post, the Postal Reform Act will make sweeping reforms to the United States Postal Service (USPS). It would, among other things, permit the ending of Saturday mail deliveries in two years if the USPS determines it financially necessary, and would place restrictions on the amount of facilities that can be closed. For example, USPS cannot close a rural post office unless the next-nearest location is no more than 10 miles away. It would also maintain the current nonprofit postage rate.

The bill, passed 62 to 37, is meant to preserve the cash-strapped USPS. The organization has been on the verge of financial collapse for years, and it is no longer able to sustain delivery operations that still process 554 million pieces of mail a day. That is why the Postal Service has pushed to end Saturday mail. While the Senate version of the bill delays that decision, the House bill sponsored by Rep. Darrell Issa (R-Calif.) would permit the USPS to immediately end Saturday deliveries. A strong majority of Republican representatives, including Issa, oppose the current Senate bill.

The House has until May 15, when the USPS will resume closing its facilities, to pass the bill. This is part of its plan to cut more than $22 million in costs by 2015. Direct mail has been in a decline in recent years as e-mail has increased in popularity. According to statistics from the Postal Service, only 168 million pieces of mail were delivered last year, compared to 202.8 billion a decade ago.

You can read the full story in The Washington Post.

Seattle Hates Junk-Mail

You think you hate junk-mail? Your hatred is nothing compared to Seattle's crusade against unwanted mail.

The Atlantic reported Monday on a new ranking put together by Berkeley, Calif.-based Catalog Choice, a privacy protection company, shows that Seattle, Wash. is the top city in the country when it comes to battling junk-mail. The organization surveyed its customers and found that the Emerald City had the most people who contacted them to get removed from the lists of junk-mail senders. Other cities that made the list were Santa Fe, NM, Boulder, Col., and Ithaca, NY.

Junk-mail is mostly associated with e-mail these days, but the death of junk direct mail has been delayed thanks to an initiative by the United States Postal Service (USPS). The "Every Door Direct Mail" program will essentially allow business to bombard your house with mail. Companies don't even have to know your address to send to you; they can simply select a neighborhood they want to target and their mail will be delivered to every house in that area.

Spam mail is not only annoying to recipients, it also is very pricey for city budgets. It costs about $40 a ton to send garbage to a landfill. On the other hand, it costs only $10 for them to work with Catalog Choice to get them removed from junk-mail lists.

You can read the full list of cities ranked by Catalog Choice in The Atlantic.

Nonprofit Mailers Ask USPS To Drop Rate Increase

The United States Postal Service (USPS) submitted another request to the Postal Regulatory Commission (PRC) last month for a 5.6-percent exigent postal rate increase after its initial appeal was rejected.  Nonprofit mailers have a message for the USPS: Give it up.

In the latest update on this issue from The NonProfit Times, we learn that four nonprofit mailing organizations have sent a letter to Postmaster General Patrick Donahoe requesting that they drop their continued appeal for an exigent rate increase.  Postal officials have publicly stated that they do not want an increase, and the mailers want them to act on those words.  "If you do not want an exigent increase and you do not want mailers to plan for one," they wrote, "withdraw the case. Actions speak louder than words.”  They also argue that even the possibility that mailers may face an above-Consumer Price Index increase has cast "a pall of uncertainty" over the industry, making budgeting and mailing plans difficult.

The letter was signed by Jerry Cerasale, senior vice president of the Direct Marketing Association (DMA); Tony Conway, executive director of the Alliance of Nonprofit Mailers; Jim Cregan, executive vice president, government affairs, for The Association of Magazine Media, and Gene Del Polito, president of the Association for Postal Commerce.  To read the full story, head over to NPT's website.

Changes To First Class Mail Coming?

UPDATE, 4:00 PM EST: We have updated the story with more reactions from nonprofits.

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In a story that we posted on our website this morning, the USPS announced plans to close half of its processing facilities in an effort to shift First Class mail to a two- to three-day standard for destinations in the continental United States. 

The Postal Service says this change will allow them to save $2 billion, which will help in their efforts to reduce operating costs by $20 billion by 2015.  Despite it being the most profitable category of mail, First Class mail is on the decline.  Volume was down to 78 billion pieces last year, with projections of 53 billion in 2016 and 39 billion by 2020.  They insist that the changes to First Class mail, which is also scheduled to receive a postage increase in January 2012, will have only a small impact on the "average postal customer." 

Most nonprofits use Standard Nonprofit mail for their direct mail solicitations, so it's unclear what the response will be from the nonprofit community.  Tony Conway, executive director of the Association of Nonprofit Mailers (ANM), said the USPS has “all these plants to handle all this mail that’s declining every year."  He went on to say: “They need to downsize the network. That drove the whole decision.”  We are continuing to check the pulse of nonprofits, and will update our story when we get more reaction.  Stay tuned.  In the mean time, let us know what you think of this news.

Legislators Introduce Postal Reform Bill To Save USPS

Struggling to stay afloat in a down economy, the United States Postal Service (USPS) is receiving much needed life support from a bi-partisan group of legislators.

At a press conference held this morning, four members of the U.S. Senate's Committee on Homeland Security and Government Affairs backed The 21st Century Postal Service Act of 2011: Joseph Lieberman (I-Conn.), Susan Collins (R-Maine), Tom Carper (D-Del.), and Scott Brown (R-Mass.).  It contains a number of provisions, including:

• Preserving six-day delivery for another two years.  After that period, the Government Accountability Office (GAO) will determine whether the Postal Service's financial situation is in good enough shape to support a six-day delivery.  The prospect of a five-day mail cycle was a huge concern for nonprofits and other businesses, so this will be a major relief for them should the bill pass.
• Refunding $7 billion to USPS through the Office of Personnel Management (OPM), as overpayment to the Federal Employee Retirement Health System (FERS).  About a quarter of that money would be used as retirement incentive buyouts of up to $25,000 (or credit service years toward retirement annuity) to reduce staff by 100,000, and pay down USPS debt.
• Giving USPS the authority by 2015 to deliver to curbside, sidewalk, or centralized mailboxes, rather than direct delivery.

These provisions, and the others included, are designed to help USPS and those that rely on it.  As Lieberman said at the press conference: “Too many people still rely on the Postal Service for us to sit back and allow it to collapse."  Tony Conway, executive director of the Alliance of Nonprofit Mailers, has already announced that his organization will support the bill.

In this era of bank bailouts, the members of the committee were quick to emphasize this is not a bailout of USPS.  The senators emphasized the $7-billion in payments to the FERS that originally came from ratepayers.

The 21st Century Postal Service Act of 2011 joins two other measures that are currently held up in Congress.  This one, however, seems to have a better chance of success since the four members who introduced it hold key committee assignments related to USPS.  Still, nothing is ever a given, so we will have to wait and see what happens with this bill.  Stay tuned for further updates as they occur.

A "Modest" Postal Rate Increase?

The NonProfit Times featured an article in yesterday's NPT Weekly Newsletter that had some important news when it comes to direct mail.  Though some mailings, like standard mail letters, will be seeing a decrease in price next year, rates on a whole will increase by 2.1 percent on Jan. 22, 2012.  In the article, a spokesperson for the United States Postal Service (USPS) said that the increase is "modest," and that it won't hinder nonprofit mailings.  Indeed, it doesn't appear that nonprofits are that upset about this increase, especially since it does not exceed the Consumer Price Index (CPI) based on inflation rate.  Anthony Conway, executive director of the Alliance of Nonprofit Mailers, had this to say about the proposed increases:

“The changes reflect the CPI for October, so the USPS has every right to increase mailing service charges.  Nonprofits are now prepared to deal with these increases as they can be predicted based on where the CPI is. This is not bad compared to other increases and at least they are not trying for an exigent increase again.”

The proposed rates are definitely not as severe as they have been in the past.  In 2007, the USPS proposed changes that increased the price of flat mailings by 30 to 40 percent.  More recently, the USPS had proposed an increase of 5.6 percent due to "exceptional circumstances," but that proposal was turned down by the Postal Regulatory Commission (PRC). 

What do you think about the new rates?  Are they justified, or do you think that they will negatively affect your nonprofit?

The United States Postal Service Appeals Rate Increase Rejection

Note: This is a summary of a past NPTtv story about how the USPS rate increase for 2011 was denied.

The Unites States Postal Service (USPS) is appealing the decision by the Postal Regulatory Commission, or PRC, to reject USPS's rate increase. As part of the appeal of the fact that it had its proposed rate increase denied, USPS claims that the PRC misread the statute and applied an "incorrect standard in evaluating the request" for the price increase. The Postal Regulatory Commission's denial of the proposed average 6.5% hike represents that first time it has ruled on an exigent rate case under the Postal Accountability and Enhancement Act of 2006.
The postal service concluded its third quarter in June with a net loss of $3.5 billion compared with 2.4 billion at the end of the same quarter in 2009. USPS also decreased costs by $6 billion last year. The proposed rate increase would have generated an estimated $2.3 billion in revenue for USPS in 2011, according to their assessment.

Fundraising Expenditures Set To Increase For Nonprofits

From the 17th of April 2011 nonprofits will be experiencing an increase in their fundraising expenditures. This is the subject of this clearly articulated video by Nonprofit Times. The United States Postal Service has increased its rates by an average of one and three quarter percent across the board. This increase is due to occur almost two years subsequent to the previous rate dilemma experienced by USPS. The increase is based on a price cap calculated by the Independent Postal Rate Commission, and is derived from CPI (Consumer Price Index) information.

Endeavoring to make up for shortfalls
The United States Postal Service is intent on bouncing back somewhat from its $456 million loss in November of 2010. A total loss of $6 billion was suffered in 2010. USPS also hopes to contribute toward some of the $5.4 billion that it currently owes to retired employees. This rate increase news will certainly place strain on nonprofits that focus heavily on the postal channel in driving their fundraising campaigns and searches for donors.