The Nonprofit FAQ

What about getting a nonprofit bulk mail permit?

Motherless Daughters wrote 8/9/95: "We're awaiting our 501 (c) (3) status, and in the meantime would like to apply for our nonprofit bulk mailing permit from the postal service. The P.O. says that if we don't have a letter from the IRS that a letter from an independent auditor, such as our accountant, stating that we're a non-profit will do. Sounds fine, until our accountant (who was recommended to us because he has lots of experience with non-profits) says he doesn't know what we're talking about. Meanwhile, we're wasting $20 to $30 per bulk mail and are growing increasing frustrated as the IRS takes its time. "Does anyone know anything about this, or have additional information we can pass on to our CPA to get the letter for our permit?" Putnam Barber replied: The Postal Service has several good pamphlets on Special (ie Nonprofit) bulk mail rules and regulations. If your accountant is puzzled about the specific meaning of the term in USPS terms, these should help him sort it out. Ask for them at the office where you make application for the permit. In October 1996, they issued Publication 417 -- "Nonprofit Standard Mail Eligibility." This publication offers an introduction to all these complicated questions in one place, plus it contains reproducible copies of several of the forms you will need. You can ask for a free copy at any post office, but only larger ones (especially Business Mail service centers) are likely to have stock on hand. Confusingly, the Postal Service and the IRS have differing standards here -- some organizations which are eligible for 501(c)(3) standing are not eligible for the special bulk rates (though I doubt it goes the other way). And there is no requirement that you be recognized as 501(c)(3) -- or as far as I know even have any plans to apply for recognition -- to be eligible for the bulk mail discount. The two agencies (IRS and USPS) make separate determinations, based on different acts of Congress and different sets of regulations. Frankly, I'm surprised that the Postal Service asked about 501(c)(3). Because the range of organizations eligible for the special rates is narrower than 501(1)(c) requires, I thought they usually asked to see bylaws, board minutes, previous (non "special") mailings, etc, and made their own determination. And while we're at it, I should add that the Postal Service looks at each mailing which you bring them. It doesn't matter whether you have a special bulk mail permit and put the "Non-profit Organization" indicia on each piece. What matters is the /content/ of the mailing. If it violates the Postal Service's standards for material eligible to be mailed at the special rate, you will be charged the higher rate. If you don't pay it, the mail will not be sent. So it's a good idea to have extra money in your deposit account at all times (you can always appeal and get the extra postage back if the person at the counter is overruled, but you can't use a mailing that's been delayed past the date of the events it describes while you argue with the PO). And it's a good idea to have the Bulk Mail Entry people preview any mailing which might be called into question. Others may be able to add to this list, but I know the words "sponsored by" are a red flag, as is anything promoting travel, insurance or bank-card sales (even remotely -- I've heard of auction mailings where the prize was a cruise being questioned). There's another Postal Service pamphlet -- on "Cooperative Mailings" -- which is worth a read. Problems with mailings can arise, though, when nothing like a forbidden cooperative mailing is underway. The people at the Bulk Mail Entry office in Seattle are very helpful and responsive when consulted in advance about potential problems. And bad things happen when deadlines are close and mailers haven't taken the possibility of confusion (or that the mailing may violate the rules) into account. The Alliance of Nonprofit Mailers website has detailed information on this question, background on postal rates, and updates on current issues and controversies related to the Postal Service. See http://www.nonprofitmailers.org/ Revised 2/7/99 -- PB