December 11, 1997 | Read Time: 2 minutes
The U.S. Postal Service has adopted new rules designed to make it easier for charities to determine whether certain mailings qualify for non-profit postal rates.
Solicitations that include a gift offer in exchange for a donation or membership dues — sometimes referred to as a “back-end premium” — can be mailed at non-profit rates even if the gift is not substantially related to the organization’s mission, provided the requested donation is more than four times the premium’s cost to the charity. If the organization claims that the premium is worth a certain amount of money, the donation it requests must also be more than two times that amount.
For example, a charity that promised to send a stuffed animal to people who gave $20 or more could mail it at reduced rates — as long as the toy cost the charity less than $5 and the charity did not say it was worth more than $9.99.
If the premium does not meet the new mailing standards but can be shown to be substantially related to the group’s mission, it can still be sent at non-profit rates.
If none of those criteria are met, the Postal Service considers an appeal to be an advertisement for a product and non-profit rates do not apply.
In the new ruling, the Postal Service backed down from an earlier proposal that would have made it hard for many charities to send their premiums at reduced rates. Under the earlier plan, a charity whose premium were not substantially linked to its mission would have been required to ask for donations greater than five times the premium’s cost and three times whatever value the group placed on the gift.
The rules were published in the November 14 issue of the Federal Register, Pages 61,014-15.
