December 9, 2004 | Read Time: 1 minute
By Holly Hall
Charities are bracing for a battle over the size of the next postal-rate increase, which is expected to be proposed early next year and take effect in 2006. Nonprofit postage rates could increase from 6 percent to 18 percent, on average.
Whether charities will see single- or double-digit rate increases depends on whether Congress can pass legislation next year to modernize postal operations and introduce additional measures to give the U.S. Postal Service access to billions of dollars it has accumulated in excess revenues.
Legislation to streamline postal operations and cut costs passed the House and Senate unanimously, but didn’t get any further. Lobbyists said they hope the bills, which would lessen the need for big postage increases, will be revived in coming months.
But the rate increase also depends on what Congress decides to do with billions of dollars the Postal Service overpaid to its employee pension fund. Congress told the service last year that it could use some of the money to offset its other costs, but lawmakers are still trying to figure out what it wants the Postal Service to do with the remaining $70-billion. Meanwhile, charities are starting to calculate what a big increase could mean for their budgets.
“A 10-percent increase means $3-million more in postage, up to $4.5-million more if we saw a 15-percent increase,” said Meta Brophy, associate director of publishing operations at Consumers Union, the tax-exempt organization that produces Consumer Reports magazine, which has four million subscribers. “This would curtail our ability to test goods and services, report that information to the public, and solicit subscriptions to keep the whole thing going.”
