April 8, 1999 | Read Time: 2 minutes
The Postal Service is expected to propose a solution this week to an unanticipated problem: Under the non-profit postage rates that took effect in January, some charities are paying more to mail magazines and other periodicals than they would under commercial rates.
For example, Consumers Union, a non-profit group in Yonkers, N.Y., that publishes Consumer Reports and three other periodicals, has since January spent $20,000 per month more in postage than it would have paid under commercial rates, said Louis Milani, senior director for business affairs and strategic marketing at the organization. Non-profit groups are not permitted to send periodicals at commercial rates. “I am not happy,” Mr. Milani said.
Postal officials told non-profit groups at a meeting last week that the postage-rate imbalance was an unintended result of the procedure used to set new rates. The service looked into the issue after non-profit leaders complained.
The service — which by law must provide reduced postage to non-profit groups — is expected to propose this week that charities be allowed to use either commercial or non-profit rates for periodicals. Its proposal must then be approved by the Postal Rate Commission.
While non-profit periodicals make up less than 15 per cent of all non-profit mail, they are an integral part of fund raising for many organizations. Charities often send magazines, newsletters, and other publications to members and donors to educate them on specific issues and to keep them interested in the organization’s work.
Not every charity that mails its publications under non-profit periodical rates, however, is paying more than it would under commercial rates.
Rates for periodicals are based on a per-pound charge, plus a per-piece charge. Charities can earn a discount from the per-piece charge if they have a low amount of advertising relative to editorial content. But commercial rates offer even deeper discounts to businesses that have low advertising, so charities might pay more to mail a publication using non-profit rates than commercial ones.
Officials at several charities in that situation said that they are confident that the Postal Service will resolve the discrepancy in rates soon. But some said they are concerned that they won’t be able to recoup the money they have already spent on postage above the commercial rate for publications mailed since January.
The Center for Science in the Public Interest, in Washington, for example, has spent $13,500 above the commercial rate to mail out three issues of its Nutrition Action Healthletter, a newsletter that goes to 900,000 of its donors.
Said Dennis Bass, the charity’s deputy director: “As long as we could migrate between commercial and non-profit rates, I would feel fine, but my greater concern right now is how fast the Postal Service moves on a decision and whether it is retroactive or not.”
