October 1, 2015

Sometimes being the U.S. Postal Service must feel like being an offensive lineman on a football team. The only times you get noticed or mentioned are when you commit a holding penalty, jump offside, or cause your quarterback to be sacked when you miss a block. For the U.S. Postal Service it is losing a letter, delivering a package late, or posting multi-billion reported losses. Otherwise, we assume that our letter carrier will show up six days a week (and sometimes on Sunday!) and that when we put a stamp on a letter it will arrive when and where it should. [1]

Like offensive linemen, the U.S. Postal Service plays many critically important roles. One essential part it plays is enabling nonprofit fundraisers to connect with millions of donors throughout the U.S. Indeed, most charity fundraisers rely very heavily on contributions from the households that the USPS serves on a daily basis.

Postal mail has been and continues to be the most effective way to communicate with past and prospective donors, and to receive their donations. At a time when the headlines often oversimplify the status of the USPS, nonprofits are a category of postal customers who have not left the mail, do not plan to leave the mail, and will not leave the mail unless something really unexpected or damaging happens. Postal mail is by far the most effective way to fund a nonprofit.

Exception proves the rule

As when an offensive lineman fails in his assignment, the exceptions to the rule often prove the rule. So when a major nonprofit announces that it intends to stop using direct mail to acquire new donors, the fundraising world pays attention. As most nonprofits already know, the American Cancer Society last month presented the results of such an experiment, and announced its return to direct mail, as reported by The Nonprofit Times:

“New donors declined by 11 percent and new donor revenue dropped by $11.3 million in the first year that American Cancer Society (ACS) paused its direct mail acquisition program. Over five years, the hiatus would have had a projected impact of $29.5 million to the organization.

The Atlanta, Ga.-based charity offered perspectives on its re-entry into mail during a presentation titled ‘Direct Mail Acquisition – Engine for Growth or Treadmill for Survival?’ The 45-minute session took place during the second day of the Direct Marketing Association Nonprofit Federation’s New York Nonprofit Conference today at the New York Hilton.

ACS suspended its direct mail acquisition program in January 2013 amid a three-year transformation that consolidated the nearly billion-dollar organization from 13 separate divisions into one single 501(c)(3) entity. Direct mail acquisition was relaunched in June 2014.”

The ACS experience proves what most, if not all, fundraising nonprofits already know very well. Direct mail is an indispensable tool that works with and supports all channels of fundraising.

USPS deserves recognition for its role in nonprofit causes

The U.S. Postal Service can and should own the fact that it is an essential contributor to the benefits and services our nation’s nonprofits deliver. Sometimes with all the focus on profitability, we lose sight of the tremendous good our postal system does. Connecting charities with supporters is one of the most important things the USPS does, and one of the things it does best.

The USPS helps find and administer new treatments and cures for cancer and other diseases. The USPS helps provide aid and assistance to wounded service members returning from war. The USPS helps to educate and advise consumers and aging citizens. The USPS enables children to receive the latest and best medical care they need, with full support to their families. The USPS helps experts share understanding of our wildlife, our history, our economy, and our medical research. The USPS enables religions to freely practice and share their ministries with those in need. The USPS helps our nation to have the best educational system anywhere.  And the list goes on.

Fundraising by mail does have its blind sides

Fundraising by mail works great, when it works as it should. In 2015, however, many nonprofits have found that campaigns are either yielding much lower contributions than projections indicate they should, or that responses are coming in much later than expected.

Charitable contributions have been rising steadily in recent years, to $358.38 billion in 2014, so a general decline in donations is not the answer.

Unfortunately, many nonprofits are concluding that poor delivery performance by the U.S. Postal Service is causing direct mail fundraising to underperform this year, in some cases severely. Postal customers are wondering whether USPS is keeping its eye on the ball for letter and flats mailings while it focuses heavily on competing for package delivery. And when USPS officials cite improving aggregate delivery numbers, many nonprofits believe they also need to know and work on what their individual customers are experiencing.

The Alliance and some of its larger members and sponsors have been sharing information and data with senior Postal Service officials who are working very hard to get to the bottom of this year’s direct mail fundraising problems.

Direct mail fundraising is complex

Direct response fundraising through the mail is a complex process with many moving parts. Nonprofits, working with partners, advisors, and the U.S. Postal Service are very adept at executing successful direct mail fundraising programs.

The USPS has rightfully been touting the effectiveness of direct mail through its targeting, measurement, and predictability. Nonprofits have the proven ability to project the timing and amount of donations they can expect. Revenue projections are just as important for nonprofits as they are for profit-seeking enterprises. When a mailing fails to meet expectations, the nonprofit must find out why.

The U.S. Postal Service has specific mail delivery standards that are reported quarterly on an aggregate basis. Of course, mailers care about when they can expect their outbound Standard Mail pieces to be delivered to households. Nonprofits also care a lot about the response to their mailing, so they typically include a reply envelope to enable households to mail in their contributions by check or card payment. Nonprofit fundraising mailings generate a tremendous amount of very desirable First Class remittance mail for the U.S. Postal Service.

Many response envelopes have a Business Reply Mail indicia that tells the household that the nonprofit will pay for the postage. Alternatively, some nonprofits include postage stamps already applied to the envelopes as they find that stamps increase response rates. A few nonprofits have begun using custom stamps made by authorized partners of the USPS so that they can display their logo or other artwork that reinforces their mission. And of course many nonprofits invite households to apply their own postage to help keep down their costs.

The response envelopes, operating under published USPS delivery service standards, are mailed via First Class Mail usually to a Post Office Box. The direct response P.O. Box often is maintained and managed by a “caging” service employed by the nonprofit. The caging service ensures that envelopes are removed from the boxes frequently, the funds are promptly deposited into the nonprofit’s bank account, and the information on the donor and donation is swiftly sent to the nonprofit. Nonprofits follow the donation with an acknowledgement letter, again enhancing the U.S. Postal Service.

When a fundraising mailing fails to deliver expected results, a nonprofit must investigate several potential causes. These can relate to the timeliness and accuracy of outbound delivery, the timeliness and accuracy of response delivery, and the handling at the destination Post Office by the USPS and the caging service 

USPS delivery is the focus

Of all the possible causes of failed or weak fundraising direct mail campaigns in 2015, U.S. Postal Service delivery performance has drawn the most attention. There has been much coverage and discussion of the facts that USPS lengthened its delivery standards at the beginning of 2015, reconfigured staffing and scheduling of all of its processing plants nationwide on January 5, 2015, and caused a marked decline in delivery service performance, failing to meet even its lower service standards during the first half of this year. And some major nonprofits believe that the uneven, slower delivery service has continued in the second half of the year for the three major classes of mail—First Class, Standard, and Periodicals Mail.

The Alliance, several of its members, and some of its corporate sponsors have been working with U.S. Postal Service officials to get to the bottom of the recent problems with fundraising campaigns. We appreciate their willingness to help and diligence in seeking the truth. Even more, we appreciate all that the USPS does on a daily basis to help hundreds of thousands of nonprofits achieve their critical missions. Nonprofits and the U.S. Postal Service do great things together, and we want them to continue to grow for years to come.

[1] In reality, offensive linemen are some of the most coveted, important members of any football team. If they can’t protect the quarterback and open holes for the running backs, the team has little chance to succeed. A very nice 2009 movie based on a book by Michael Lewis was all about an offensive lineman. It is called “The Blind Side” because that is what the left side of an offensive line protects for a right-handed quarterback. Starring Quinton Aaron and Sandra Bullock, the movie is a true story about a homeless young man named Michael Oher who became a star offensive lineman in college and the pros.

© 2015 Alliance of Nonprofit Mailers