November 16, 2000 | Read Time: 1 minute
By NICOLE LEWIS
President Clinton has signed into law a measure guaranteeing that nonprofit groups will always receive a fixed-percentage discount on their postage rates. Most types of letters sent by nonprofit groups will cost roughly 40 percent less than the price charged to commercial mailers; the discount for periodicals will be 5 percent.
The new law takes effect in January, when the Postal Service is raising rates for mailings sent by all types of organizations.
It abolishes a federal law that based nonprofit rates on a complex formula that was supposed to determine the Postal Service’s real costs in delivering mail sent by charities. The formula was used to calculate nonprofit mailing volume nationwide based on a sample of postal truckloads.
Nonprofit groups said the sampling approach never led to an accurate calculation of the service’s costs — and therefore produced rates that were not based on actual mailing patterns.
The Alliance of Nonprofit Mailers and other charity leaders started pressing Congress to change the formula, or scrap it, after the Postal Service released a proposal in January that would have increased the cost of many charity mailings by as much as 40 percent over current rates.
The Postal Service joined in asking Congress to make the change, saying it did not think the current approach worked.
The Postal Rate Commission plans to announce this week what rates charities and other mailers should be charged. In December the Postal Service’s Board of Governors will determine the final rates, which will go into effect early next year.
