
Restrictions Lifted on Cooperative Nonprofit Mailings
by Guest Blogger, 11/14/2003
On Nov. 13, the United States Postal Service (USPS) lifted a ban on commercial mailers profiting from charity appeals sent at discounted postal rates.
New rules, issued on October 9, 2003, allow commercial mailers to receive funds from the production and distribution of fundraising mail sent on behalf of charities at cheaper nonprofit postal rates. Such contractual relationships are known as cooperative mailing arrangements. Other nonprofit mailings sent through commercial mailers -- including newsletters and solicitations for goods and services -- will still be subject to the cooperative mailing rule.
Nonprofits voiced concern that rule changes were a concession to commercial interests by a cash-strapped postal service, which would lead to increased junk mail, and exploitation of legitimate charities by unscrupulous commercial mailers. A number of nonprofit and commercial services -- including the Alliance for Nonprofit Mailers, Independent Sector, and the Alliance for Fundraising Professionals -- urged USPS to instead adopt a set of safeguards aimed at curbing potential abuses. These included ensuring that nonprofit leadership and management not overlap in any way with that of the commercial mailer; guaranteeing that control of the actual donor list and donated funds themselves go directly to the nonprofits; and preventing commercial services from laying intellectual property claims on any aspect of distributed materials.
USPS adopted none of the suggested alternatives. The final rule, however, does require commercial mailers to provide nonprofits with copies of donor lists, as well as contact information and the amount contributed for each donor. This submission can be waived in writing by the nonprofit. USPS also suggested that nonprofits, fundraising associations, and government agencies consider providing training and education for groups, and that nonprofits themselves review their current and proposed mailer contracts to see if they are operating under the most advantageous terms.
In a letter dated November 7, 2003, four congressional Democrats called upon both the Postmaster General and USPS Board of Governors to reconsider the impact of the rule changes in light of abuses by commercial mailers. Sen. Joseph Lieberman (D-CT), ranking member on the Senate Governmental Affairs Committee; Rep. Henry Waxman (D-CA), ranking member of the House Government Reform Committee; Rep. David Obey (D-WI), ranking member of the House Appropriations Committee; and Rep. John Oliver (D-MA) ranking member of the House Appropriations subcommittee on Transportation, Treasury, and Independent Agencies requested that greater protections against fraud and abuse be adopted. The letter warns of future violations similar to the recent $4.5 million settlement from a Boston-based commercial mailer that distributed 78 million pieces of mail solicitations for charities under nonprofit mailing rates illegally, while pocketing 76 percent of donations.
