Accountability and Oversight

U.S. Postal Service Rule Allows Cooperative Mailings

• Cooperative Mail final rule
• Read IS comments on this proposal

The U.S. Postal Service issued its final rule on cooperative mailing on October 9, 2003, with an effective date of November 13. It essentially adopted its original proposal to eliminate the cooperative mail rule for charitable solicitations, with some modifications.  The new rule lifts previous restrictions on for-profit mailers entering into contracts with nonprofits to conduct charitable solicitation mail campaigns at the nonprofit rate.  However, for-profit mailers handling such mailings will be required to give the nonprofit organization a copy of the list of donors, with contact information for each, and the amount of the donation.  This condition can be waived by the nonprofit, if it is done in writing.

Independent Sector, along with the Alliance for Nonprofit Mailers and the Association of Fundraising Professionals, filed comments in June proposing that the Postal Service retain some safeguards in order to limit the circumstances under which abuse typically occurs, rather than eliminate the cooperative mail rule.  None of the safeguards that IS and others suggested were adopted.  IS had recommended that the nonprofit retain ownership of the donor list, but the final rule issued by the Postal Service simply requires that the for-profit mailer give the nonprofit organization a copy of the list of donors, unless this condition is waived. 

In its explanation of the final rule, the Postal Service acknowledges concerns that “some professional fundraisers may use the new rules to take advantage of inexperienced or unsophisticated nonprofit organizations.” However, the agency does not see those concerns as sufficient cause for restrictions in cooperative mailing at this time, and proposes as an alternative the education and training of nonprofit managers to avoid abuses by commercial entities. The agency suggests that this education and training could be done by nonprofit or fundraising associations, or by government offices that oversee charitable entities. The agency also encourages nonprofits to review their existing and proposed contracts to consider whether the terms are in their best interests.


Background
On May 6, 2003, the U.S. Postal Service issued a proposal to eliminate the cooperative mail rule for mailings by nonprofit organizations seeking donations. The cooperative mailing rule sets standards for evaluating contracts between commercial mailers and nonprofits in order to determine whether a mailing may be sent under the nonprofit postage rate. This proposal, which has now been adopted, allows for-profit mailers to handle mailings seeking monetary donations for a nonprofit. Other mailings such as solicitations for goods or services, newsletters, or thank you letters are still subject to the existing cooperative mailing rule.

When assessing whether a mailing violated the former cooperative mail rule, the Postal Service considered the relationship between the nonprofit and the for-profit entity as well as facts about the mailing itself. The for-profit must be the agent of the nonprofit, not a partner in a joint venture. Factors considered are: who designs, prepares and pays for the mailing; who makes decisions about the content of the mailing; what are the participants’ intentions and interests; what are the contributions of each participant; who paid the postage; who bears the risks; and how the profits and revenues are divided. 


Last Updated May 8, 2008