Guest blog by Blase Ciabaton
Sometimes it’s better to use first class postage, but more often it’s a waste of money for nonprofit organizations.
In Part 1, we looked at some common reasons nonprofits offer for using first class postage, and an explanation of why it might be unnecessary. Today we’ll examine more reasons.
Our donors pay more attention to first class mail
If you feel that an envelope with a stamp on it gets more attention, then consider using precancelled stamps. This does not increase postage in any way, and looks exactly like first class postage. It does not involve a printed permit or meter.
Our board members want us to use first class postage
If this is the case, then hug your board members who are asking for this, tell them how much you appreciate their dedication and support, but explain that this is an area where you will not compromise. Do not permit the irrational wasting of your organization’s money on postage.
If board members refuse to acquiesce on this point, then at least consider doing an A/B campaign where half of the pieces use first-class postage and the other half are mailed at the nonprofit rate. Track response to the campaign and see if there is a statistical difference. Make sure that you put your office and home address on the nonprofit postage test list so that you will have personal experience with how long it takes for the mail piece to get delivered.
How much money are we talking about anyway?
Did you know that it costs at least 20 cents a piece more to use the first class postage rate instead of the nonprofit rate? The automated nonprofit postage rate is about 15 cents a piece while the first-class presort rate is about 35 cents a piece. In an even more extreme case, regular unsorted first class postage is 44 cents a piece, making the difference as much a 30 cents a piece. Simply multiply these numbers by the size of your database to get a real sense on how much money you could be saving per campaign.
The bottom line is that any money saved on postage can be used:
1) to market to a larger audience
2) to send additional appeal campaigns each year
3) to reduce your administrative expenses and gain more benefits for those you serve
4) fill in the blank
About the Author: In 2009, Blase Ciabaton used his six years of expertise as a direct mail professional to launch the blog www.TheDirectMailMan.com. The blog caters to the nonprofit community and tackles issues related to postage permits, mailing lists, returned mail and donor conversion.
Fundraising Assets helps busy fundraising professionals raise more money, save valuable time and reduce costs. We offer consulting, writing, design and production services for direct mail and e-mail fundraising, social networking and more.
Are there differences between post offices and the ability to get non-profit mail out the door in a timely manner when the post office in question is in a small town? We’ve primarily used first class bulk postage because our letters hit the donors’ mail boxes more consistently that way (we’ve tried both ways). We don’t want to wait 2-3 weeks for our mail to hit people’s mail boxes, but that’s what we’ve run into when using non-profit bulk rates.
Comment by Christine — March 29, 2010 @ 6:26 PM
Hi Christine,
Great question! Wow, this is difficult to answer in a comment because there are various forces at work here.
Yes, it’s quite possible for a small market post office to have slower service than a larger market or even another small market post office. However, possibly the biggest determination of speedy delivery is automation. Is your nonprofit mail automated? If you don’t know if it’s automated, then it’s probably NOT. Automation converts each address in your database into a barcode and prints it on the mail piece (or label) BEFORE it gets delivered to the post office. The post office LOVES this because it saves them time & labor (fewer steps to go through before it ends up in the recipient’s mail box). The other super-cool thing about automation is that it offers an ADDITIONAL discount off of your nonprofit postage (usually about an additional 5 cents a piece). In many cases (particularly in a small market) automated bulk mail gets delivered to a completely different processing center than non-automated bulk mail-this can also impact the delivery time.
If your nonprofit mail is not currently automated, then you have 2 options if you want to pursue this 1) purchase some automation software and do it yourself 2) work with a 3rd party bulk mail professional to have your mail processed. Both of these options cost money, but keep in mind that you’ll be saving about 5 cents a piece on postage so some, or depending on the size of your list, all of the expense can be covered by the postage savings. Of course if you work with a 3rd party, you no longer have to rely on staff or volunteers to get your mailing out on time.
One other HUGE factor impacting delivery time is the proximity of the members of your mailing list to your mailing location. If 75%+ are within a 100 mile radius or so, I would think that the nonprofit rate will suffice to get your mail delivered on time (particularly if it’s automated). If most of your supporters are dispersed across the country, then you may have no choice but to use the 1st class rate to assure timely delivery.
The best thing that you can do is to keep yourself, and other staff members on your own mailing list and ALWAYS track how long it takes to get delivered-sounds like you’re already doing this-great job! Please contact me directly or add further comments if I missed the mark with this comment. Thanks again for your feedback! Blase
Comment by Blase Ciabaton — March 29, 2010 @ 9:27 PM
I find that another huge waste of money is the Business Reply Envelope. There’s no need to pay the postage to get mail back: donors have stamps because they still mail other things. BRM only increases the number of people writing back to say “take me off your list” and does not increase the funds received. It decreases return on investment. It’s also a huge expense, especially since the post office charges a fee plus the first class postage.
Comment by Katherine Wertheim, CFRE — April 6, 2010 @ 12:41 PM
Hi Katherine,
Thanks so much for your feedback about Business Reply Envelopes! Frankly, I’m quite surprised by this feedback. In Mal Warwick’s book, Revolution in the Mail Box, he actually encourages the use of Business Reply Envelopes. Although it is an added expense, it removes barriers to respond, and typically increases response rate. For anyone wanting more info about Business Reply Permits, here’s a recent post that explains how to get one and how they work: http://bit.ly/2IbGpO I can understand wanting to be sensitive to donors feedback about perceived waste associated with this, but I wonder how they would feel if they knew that it increased overall response rate, and increased funds received by the nonprofit. Again, thanks for sharing-I think it’s important that other nonprofits are made aware that use of Business Reply Envelopes can have a negative perception.
Comment by Blase Ciabaton — April 9, 2010 @ 8:03 AM
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