New Postal Rates Hammer Nonprofit Budgets

Bob Makofsky, general manager for Conformer Expansion Products (www.conformerinc.com), Great Neck, N.Y. offers insights and advice to help nonprofits navigate the new postal regulations.

The seven percent increase in standard mail rates is easy enough to understand, but in my conversations with both nonprofit and business executives, I’ve found that many don’t understand the new “shape-based” system. Not surprising, since the new classifications are complex and require a whole new way of thinking about how you package premiums, calendars, annual reports and other large pieces. While you may be confused about the new system, the effect on your budget is crystal clear. And if hefty postage increases are putting a strain on the money you need to meet your organization’s mission, I’ve got some good news: working with the system can actually lower your fees below the old postage rates.

For nonprofits, the new rates went into effect in July 2007. Nonprofits are especially vulnerable to higher costs under the shape-based system because many use direct-mail gifts and premiums. In the past, these strategies have been a successful, cost-effective way to raise money and increase awareness about programs and services. Now, your organization may be wondering whether or not to toss out direct mail appeals that involve premiums.

What can be budget-breaking are new classifications for what used to be distinguished as parcels or flats. Now there are three categories: parcels, flats and a new standard mail category, Non-Flat Machinable (NFM). Premium mailings often fall into this category, and if they don’t qualify as an NFM, they are considered a parcel. Either way, these two classifications are the most expensive way to send your donors greeting cards, CDs, pens or key chains. The NFM category depends on the physical characteristics of the piece and whether it works, or doesn’t work, with postal equipment. To work, the package has to meet flexibility and uniform thickness requirements. If it doesn’t work, the package becomes a parcel. Both will cost you more than in the past.