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Postal rate hike will impact nonprofit marketing

Written on Oct 25, 2018

The price of a First Class stamp would rise 10%, from 50 cents to 55 cents, and other classes of mail heavily used by nonprofits would see price hikes next year that are twice the rate of inflation under a proposal by the United States Postal Service (USPS).

The USPS on Oct. 10 filed a rate increase proposal with the Postal Regulatory Commission (PRC), which will review and approve any proposed prices before the scheduled Jan. 27, 2019 implementation date.

Proposed prices would increase Mailing Services product prices about 2.5% and most of the price increases for Shipping Services will vary by product, with Priority Mail increasing 5.9%, and Priority Mail Expenses rising 3.9%.

Mailing Services price increases are limited based on the Consumer Price Index (CPI). Shipping Services are adjusted strategically, according to “market conditions and the need to maintain affordable services for customers.”

USPS proposes average increases by class of mail as follows:

  • First Class Mail, 2.486%
  • Marketing Mail, 2.479%
  • Periodicals, 2.52%
  • Package Services, 2.522%
  • Special Services, 2.512%

“The most surprising and shocking development” is the proposed 10-percent increase in the cost of a First Class stamp, said Stephen Kearney, executive director of the Alliance of Nonprofit Mailers. “That is so important to nonprofit fundraising. Nonprofits and their agencies will need to quickly review their mailing budgets for next year,” he said, adding that many include First Class postage on response envelopes and many use First Class on outbound appeals.

Heavily used categories of outbound nonprofit marketing mail are going up twice the rate of inflation, 4.8% to 5.5% for destination sectional center facility (DSCF), according to Kearney. Single piece First Class is going up four times the rate of inflation. “That’s a double hit for some fundraisers,” he said.

Just as it has done in the last two years, USPS will reduce workshare discounts on drop-shipped Marketing Mail letters and making differential changes in flats versus letters.