USPS Clarifies Application of New Rules to Nonprofit Organizations
May 6, 2005
Nonprofit mailers breathed a sigh of relief this week when the U.S. Postal Service issued a clarification of new rules--scheduled to take effect June 1--regarding the inclusion of personal information in mailings at preferred rates. USPS has adopted a broad definition of a "solicitation for a donation" by a nonprofit organization in Customer Support Ruling PS-323 that should resolve most concerns about continuing to mail solicitations and information at nonprofit standard rates. The Alliance of Nonprofit Mailers, which led the advocacy effort, termed the guidance "very fair and very reasonable."
The regulations that take effect June 1 limit the use of personal information (such as a record of past donations or the year of graduation) to an explicit solicitation if the piece is to be mailed at the lower rates. If personal information serves a dual purpose, mailings must be at first-class rates. The new guidance sticks with earlier explanations of what constitutes "personal information" as any information specific to the addressee other than the date of the letter, name, address, and internal routing numbers. However, it offers an expansive definition of "solicitation for a donation" to include virtually any exhortation that the recipient take an action related to the nonprofit purpose of the organization. For example, requests for any of the following would be considered solicitations:
- donate funds
- contribute volunteer services
- join the organization
- attend a function
- read enclosed literature
- apply to, enroll in, or contact the mailer to obtain more information about an educational institution or program
Any personal information in the mailing must be tied to the solicitation, such as a listing of past donations with a solicitation for funds. The guidance also addresses issues that have been raised about acknowledgements of prior donations. Earlier USPS guidance said that a mailing with the words "keep this notice as a receipt for tax purposes" served a dual purpose and had to be mailed first class. The new guidance provides a "bright-line test," according to the USPS, which others might see as splitting hairs. Mailings that include the amount of a prior donation will be ineligible for nonprofit standard rates if the following language is included:
- tax receipt
- keep this notice as a receipt for tax purposes
- keep this for your records
The following statements, however, are acceptable for mailing at nonprofit rates:
- your contribution may be tax deductible
- no goods or services were provided in exchange for this gift
- the IRS requires written substantiation of charitable gifts of $250 or more (provided that nothing in the piece indicates that it serves as such substantiation)
The Alliance for Nonprofit Mailers has a resource page on the new rules.
The NACUBO contact on postal issues is Anne Gross.
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