Non-Profit Groups Gird for Double-Digit Increases in Postage Rates

Effective January 10, many charities will face double-digit increases in their postage costs, the Postal Service has announced.

The announcement gives non-profit groups a few months of welcome relief from postage-rate increases. The Postal Service had wanted to raise the rates this year, but it decided to postpone the increase after Congress urged the service not to increase rates at all. Members of Congress — as well as non-profit groups and businesses that are big mailers — said they did not see why the service needed to increase rates, since it has posted surpluses of more than $1-billion in each of the last three years.

The size of the rate increase has made non-profit groups angry — especially because many of them will see their rates rise by a bigger percentage than will commercial mailers in what the Postal Service is touting as the lowest postage increase in history.

Non-profit periodicals, for example, will cost 8 per cent more to mail, on average, while postage on commercial periodicals will rise by only 4.6 per cent. Non-profit letters and flats — classified as “standard” mail — will see increases of about 14 per cent, much higher than the 2.9-per-cent overall increase for all mailers that is being publicized by the Postal Service.

And, unlike other mailers, non-profit groups will actually have to absorb two postage increases in the next six months, due to a 1993 law that changed the way that Congress subsidized the Postal Service for delivering non-profit mail.

Under that law, federal subsidies have been phased out gradually. To help replace them, charities have paid small annual increases in postage. The last of those increases will take effect on October 4, followed by the more substantial general rate increase on January 10.

Many charity leaders and postal experts contend that the general rate increase is based on outdated and inaccurate data on the costs and volume of non-profit mail. Even though non-profit leaders tried to forestall the increase by making that case, they did not succeed.

“The differences between the small commercial increase and the large non-profit increase cannot be explained by any reliable evidence,” said Mark Silbergeld, co-director of Consumers Union of U.S.

He said that the rate changes will force his organization to pay $2-million more in postage to mail some 200 million pieces of non-profit mail each year; about half of that consists of periodicals.

“The rates that non-profits will eventually have to swallow remain unjustified,” added Mr. Silbergeld, who also serves as president of the Alliance of Nonprofit Mailers, which represents about 200 groups.

The Postal Rate Commission, an independent body that reviews all proposals to increase postage, agreed that non-profit increases were based on unreliable data, but it did little to help charities. Lacking up-to-date information for charity mail, the commission came up with its own rates that, in effect, charged charities more for periodicals and less for standard mail than what the Postal Service proposed. The service approved the commission’s version of non-profit rates last month.

Dismayed by the increases, the Alliance of Nonprofit Mailers said that it will decide later this month whether to sue the Postal Service to challenge the rates. Neal Denton, the group’s executive director, said that any such action would cost hundreds of thousands of dollars. Obtaining any ruling, he added, would take several months to more than a year.

Another group, the National Federation of Nonprofits, which represents 300 charities, hopes for a more expedient solution. Officials said they hoped to persuade a member of Congress to introduce legislation this summer that would set postage rates for non-profit groups at current levels and require the Postal Service to increase non-profit and commercial rates by the same percentage.