1. Postal Changes That Will Affect Nonprofit Mailers
Stephen Kearney
Alliance of Nonprofit Mailers
National Catholic Development Conference
October 11, 2016

2. Agenda Nonprofits rely on USPS USPS in a period of painful change
Postal legislation in Congress
Regulatory review starts Dec. 2016
How can nonprofit mailers participate?

3. Nonprofits rely on USPS
1/10 of all US Mail = 15 billion of 150 billion pieces
12.6B Standard, 1.4B Periodicals, 1B First Class
~$155B raised through the mail
Direct mail more effective than digital (1/8 the money)
Direct mail transformed nonprofit sector: quadrupled in 1980s, doubled in 1990s, again in early 2000s

4. Recession and exigent surcharge

5. USPS in a period of change: Mail volume stops growing
Years <50 billion pieces: 164 ( )
50-100B: 27 ( )
B: 7 ( )
B: 12 ( )
Years >200B: 10 ( )--peak 213B in 2006
Years back to B: 7 ( )
154B in 2015

6. USPS reductions: 2007-2015 Facilities -360 -54%
Delivery routes , %
Post Offices w/ retail hours reduced , %
Work hours M %
Career employees , %
Non-career employees , %
Total employees , %
Administrative employees , %

7. in the room: USPS cost of labor
Labor = 80% of USPS costs
Collective bargaining and binding arbitration
Do not reflect USPS financial situation
Do not reflect over-compensation vs. private sector
Arbitrator awards based on previous contracts
Recent award: 40 months, 3.8% raises, COLAs, no lay-offs

8. Postal legislation Both Senate and House bills out of committee
Raise postage rates
Reduce postal retiree heath benefit costs
Spread retiree costs over 40 years and invest in market
Only Senate requires arbitrators to consider finances
Slow down consolidations
Encourage centralized delivery
Non-postal services
Costing methodologies

9. Regulatory review
Review pricing regulation on 10-year anniversary Dec. 2016
Postal Regulatory Commission (PRC) to conduct open process
2 steps—(1) Is system meeting objectives and factors?
(2) If not, what to change?
Main focus on Consumer Price Index (CPI) price cap
USPS and unions pushing hard to eliminate or raise the cap
Customers will support importance of cap and limit damage
Important for nonprofits to share their stories with the PRC

10. Objectives of USPS pricing regulation
(1) To maximize incentives to reduce costs and increase efficiency.
(2) To create predictability and stability in rates.
(3) To maintain high quality service standards established under section 3691.
(4) To allow the Postal Service pricing flexibility.
(5) To assure adequate revenues, including retained earnings, to maintain financial stability.
(6) To reduce the administrative burden and increase the transparency of the ratemaking process.
(7) To enhance mail security and deter terrorism.
(8) To establish and maintain a just and reasonable schedule for rates and classifications, however the objective under this paragraph shall not be construed to prohibit the Postal Service from making changes of unequal magnitude within, between, or among classes of mail.
(9) To allocate the total institutional costs of the Postal Service appropriately between market-dominant and competitive products.

11. Alliance of Nonprofit Mailers
Coalition of nonprofits since 1980
Represents nonprofits to Congress, USPS, PRC, US Court of Appeals
Ensures nondiscrimination against nonprofits
Works to retain nonprofit preferred rates
Keeps postal rates reasonable and service reliable
Shares information on nonprofit mailers with policymakers and regulators
Shares postal information with nonprofits

12. For nonprofits, by nonprofits

13. How can you participate?
Submit your story to the Postal Regulatory Commission about your mission and reliance on mail in early 2017
Respond to Alliance calls to action
Tell your story in the Smithsonian National Postal Museum’s online exhibit, America’s Mailing Industry:

14. Submit your story to a Smithsonian exhibit

15. Join us!