When, three years ago, we first wrote about the valiant effort to push back against a proposed “historic” rate hike in nonprofit preferred postal rates, this is not the news we had hoped to bring.   

“It’s a perk for nonprofits that doesn’t get as much attention or fanfare as the tax deduction for charitable contributions, but reduced postal charges are an important aid to the success of the mission of many organizations.” 

Over the weekend, though, on August 29, 2021, new postal rates went into effect across the board; a court had not yet acted on a “stay” request in connection with the rates for nonprofits. Record rate hike coming Aug 29, unless the Court grants a “stay” (August 20, 2021) Report, Alliance of Nonprofit Mailers.  

See also: Moving ahead to slow down the mail (August 6, 2021) Report, Alliance of Nonprofit Mailers; Nonprofit Postal Rates Set To Skyrocket (June 2, 2021) The Nonprofit Times; and USPS announces its long-sought above-CPI rates (June 1,  2021) Report, Alliance of Nonprofit Mailers.

Background

The roots of the postal service date back to the year before the Declaration of Independence; its importance to the new country’s welfare and growth as a democracy was highlighted by its inclusion in the U.S. Constitution. 

In Possible Rate Hike For Some Nonprofits’ Mail (September 12, 2018) and again in Nonprofit Postal Rates: Action Alert (January 22, 2020), we explained the pertinent history including the major reorganization in 1970 and then the setback in 2006 when Congress imposed a proverbial “solution in search of a problem.”  

Since then, it’s been mostly downhill for the United States Postal Service and an uphill battle for the nonprofit sector in its attempts to thwart imposition of devastating – and way above the rate of inflation – “preferred” postal rates.   

“501(c)(3)s use the established ‘preferred postal rate’ schedules to make important budgetary decisions for current and upcoming fiscal periods.” The United States Postal Service increases one or more of these rates from time to time. “Ordinarily, though, a change like that happens only after the USPS follows a standard procedure that gives the affected stakeholders a chance to weigh in on any proposal as well as enough lead time to minimize the negative budgetary impact of any price hike.”

When the USPS first announced in 2018 the possibility of a rate hike for certain types of mailings, the “… initial reaction” was “swift and negative,” there being “concerns and questions, though, not only about the rate jump itself, but also by the irregular procedure being followed this time.” The nonprofit community participated in the public-comment period following that announcement. 

In our January 2020 update, we covered the troubling developments to that point. Since then, there was a small rate hike in January 2021, but the battle intensified as this year progressed in the face of “skyrocketing” and “historic” (i.e., historically bad) proposed new rates for our community.

The Alliance of Nonprofit Mailers (ANM) has been in the lead of the fight against the devastating financial hits on deck. The reports by the ANM over these months, complemented by news stories from – for example – The Nonprofit Times, and action alerts by The National Council of Nonprofits (NCN), among others, provide the nuts-and-bolts of what’s at stake. 

The Stay Request

One of the many nonprofit organizations and associations that will be affected adversely by the rate increase is the National Rural Electric Cooperative Association (NRECA). It’s among many members of the Alliance of Nonprofit Mailers that expressed huge concerns including particularly in 2021. See, for example, Unprecedented Mail Rate Hike Could Hit Co-ops and Statewides Hard (June 8, 2021), Cathy Cash, NRECA Report.

“NRECA joined with the Alliance of Nonprofit Mailers and fought against these rate increases, arguing that they’re not needed because of the influx of COVID-19 relief funds received by the U.S. Postal Service. The comments filed by NRECA and ANM called on the USPS to return to its policy of indexing increases to the rate of inflation, which is currently below 3%.”  The “unprecedented rate hike … for not-for-profits will penalize the organizations that need the U.S. Postal Service most for key communications….” 

Some 21 members of Congress from both parties expressed “serious concern” to the USPS about the proposed rate hikes. But on July 19, 2021, the Postal Regulatory Commission issued its order, raising rates for “nonprofit marketing mail by an average of 7.8%. This includes 5.7% for first-class letters, 10.4% for large envelopes, newsletters and magazines and 8.6% for parcels.”

“On Friday, July 23, the Alliance of Nonprofit Mailers, representing the nonprofit sector, joined several commercial mailer associations in requesting a “stay” of the new rates.”  They and their “allies renewed an earlier request for stay.” The U.S. Court of Appeals for the D.C. Circuit denied the stay on grounds that the requestors had not shown “the type of “the type of imminent and irreparable harm necessary for a stay.”

The current stay request, which the appellate court has not yet ruled on, asks that a hold be put on until the full appeal on the merits of the “rates authority created by the Postal Regulatory Commission” is decided. Oral arguments are scheduled for September 13, 2021. 

Record rate hike coming Aug 29, unless the Court grants a “stay” (August 20, 2021), Report, Alliance of Nonprofit Mailers. The ANM had hoped that the court would act before August 29th: “It is too early to say whether we will get one, but we are optimistic that we will get a ruling one way or the other before the 29th.”

The appellate court was silent, although the “authority to raise rates well above general inflation was granted last November by the Postal Regulatory Commission to the United States Postal Service.  And USPS decided to use all of its authority, even though it has the right to ‘bank’ or defer a portion for later years.” 

Conclusion 

The rate increases, therefore, are in full force and effect and will continue, unless there are further court developments on a stay or on the merits of the appeal.  

The icing on this rancid cake is that there’s another possible rate increase in the cards for January 2022. “With January only five months away, mailers have started asking whether there will be another CPI-based rate increase then.  The answer is, ‘maybe.’  USPS has so far refused to show its cards about the timing of next year’s pricing changes….”  

Stay tuned.

            — Linda J. Rosenthal, J.D., FPLG Information & Research Director  

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