August 31, 2017

Current U.S. Postal Service proposals for postage rate increases for nonprofit fundraising mail (Marketing Mail) could add up to over 20 percent. That is a clear indication to some that the USPS does not want nonprofits in the mail.

While all of the proposals are not likely to gain approval, they are serious proposals by the USPS. In response to a number of members asking us to quantify the potential impacts we provide the following table.

The “monitoring regime” is what the USPS is asking the Postal Regulatory Commission to institute in the ten-year rate regulatory review. There would be no price cap and only after-the-fact review of USPS rate increases. Our estimate is based on the evidence we submitted (pp.65-66) in the rate review and an Inspector General’s report about the experience in other postal systems that have deregulated pricing.

Of course, we hope that we are incorrect interpreting USPS intentions. But these are the pricing and policy signals they are sending. No doubt they will continue to say that we should trust their judgment, and that they would never do anything to push substantial volume out of the postal system.

Nonprofits are budgeting for next year’s postage now. Many are also discussing longer-term fundraising strategies that include mail. It is very cold comfort to hear that maybe not all of these proposals will happen. And if they do, they will be spread out and tempered by the better judgment of postal leaders.