Nonprofit USPS postal rate challenged
Four congressional Democrats have asked the U.S. Postal Service to reconsider its decision to allow cheaper postal rates for nonprofit groups that team up with commercial companies to raise money.
In a letter to postal officials Friday, Sen. Joseph I. Lieberman (Conn.) and Reps. Henry A. Waxman (Calif.), David R. Obey (Wis.) and John W. Olver (Mass.) warned that the change in the cooperative mail rule, set to take effect Thursday, would give rise to arrangements in which a commercial fundraiser solicits money for a charity but pockets much of the money.
The lawmakers, all of whom serve on congressional committees that oversee the Postal Service, cited a recent $4.5 million payment to the federal government by Vantage Group Inc., a Brookline, Mass., company, to settle civil charges of postal fraud.
Federal authorities alleged that the company mailed fundraising letters for nonprofit groups at a reduced, nonprofit postal rate despite having a financial stake in the donations. Existing rules ban such arrangements.
“According to the government, Vantage received 76 percent of all money donated to the relevant nonprofit organizations,” the lawmakers wrote. They added that “this sort of abuse will be legal under the new cooperative mailing rule” and that “it will be perfectly legal for these marketers to enter into arrangements that allow them to keep the funds that consumers think they are giving to the nonprofit.”
Postal officials say the new rule will benefit nonprofits that lack the size or in-house expertise to mount successful fundraising campaigns.
Jerry McKiernan, a spokesman for the Postal Service, said the Vantage case should reassure critics, not alarm them.
“We don’t put up with abuse,” McKiernan said.
To deter abuse, the Postal Service will require the commercial partner to provide the nonprofit with a list of donors, their contact information and the amount of money they contributed in the fundraising campaign, unless the nonprofit waives the right to such information.
That’s not good enough for the Alliance of Nonprofit Mailers, an association of charitable groups. In its newsletter yesterday, the alliance said the new rule “leaves consumers defenseless from unscrupulous fundraising practices and allows small and unsophisticated nonprofit organizations to fall prey to one-sided and abusive arrangements.”
