USPS Content Guidelines, Restrictions and Exceptions

1. Greater Illinois Postal Customer Council 2014 National PCC Week September 10, 2014 USPS Content Guidelines, Restrictions and Exceptions Phil Claiborne, Director of Circulation, The Elks Magazine

2. Relevant Quotes “Mystical references to society and its programs to help may warm the hearts of the gullible but what it really means is putting more power in the hands of bureaucrats.” ~Thomas Sowell “Always listen to experts. They'll tell you what can't be done, and why. Then do it.”  ~Robert A Heinlein

3. Standard Mail is “Advertising Mail” • With Nonprofit Standard Mail we… • Solicit donations (not adv) • Educate the public (not adv) • Describe member benefits (1/2 page) (not adv) • Acknowledge Sponsors • (no contact info, no adjectives) (not adv) • Issue Public Service Announcements (not adv) …and sometimes mail products or advertisements!

4. Nonprofit Standard Mail - Basic premise • Any product or advertisement must be substantially related to the qualified purpose (mission) of the nonprofit. • Examples: • Nonprofit Orchestra selling CD's of its performance • Scientific Org selling its research reports • Archaeological organization selling tours to excavated sites • Everything else that can or can’t be mailed is a restriction, prohibition, exception, or is statutorily allowed in comparison to this basic premise.

5. Nonprofit Standard Mail - Basic premise • Automatically Substantially Related: • Gifts or donations offered as prizes or premiums • Announcement of activities (bake sale, car wash, charitable auction) if work is done by unpaid members or volunteers. • Otherwise non-postal law, often tax law, determines Substantial Relativity • IRS Unrelated Business Income (UBIT) • TheMAILER certifies substantial relativity

6. Nonprofit Standard Mail

7. PostalOne

8. Substantially related certification in PostalOne!

9. Nonprofit Standard Mail - Products • Mailing Products – Statutory Provisions: • Low Cost Item (no more than $10.40 in 2014) • Gifted or Donated to organization • Organization’s own publication • Meeting basic criteria for Periodicals publ.

10. Nonprofit Standard Mail - Products • Premiums • Front End • Ex: return address labels • Free with an outgoing solicitation to induce donors • low-cost sent to everybody … eligible! • Back End • Also promoted to induce member dues or donors • Mailed after receiving a donation. • “Ask" must cover 4x cost and 2x represented value, if claimed

11. Definition of Advertising Anything that advertises, promotes, offers, or, for a fee or consideration, recommends, describes, or announces the availability of any product or service. 39 USC 3626 All material for the publication of which a valuable consideration is paid, accepted, or promised that calls attention to something to get people to buy it, sell it, seek it, or support it. -USPS

12. Nonprofit Standard Mail - Advertising Advertising restrictions, exceptions, allowances: • Travel, Insurance, Financial instruments (TIF) • Cooperative Mail & CFR exception • Meeting the content Req’s of a Periodical • Member benefits • Personalization • Sponsorship versus Advertising • Lotteries & Raffles • Voter Registration Officials

13. Nonprofit Standard Mail - Travel ‘TIF’ • Travel Advertising May be mailed if… • The org is an authorized nonprofit • The arrangement is designed for members • Travel is substantially related the nonprofit’s qualifying purposes • Based on in-depth analysis, not only on advertisement • Ex: Review itinerary of arrangement DMM 703.1.6.4c ; CSR PS-305 …or

14. Nonprofit Standard Mail - Travel ‘TIF’ • ‘Travel’ advertising is defined by three things: • Transportation • Destination • Accommodation(a day trip does not include) • Unless all 3 are present, it is not ‘travel’ advertising • Thus, an advertisement limited to an airline fare discount is not considered a restricted travel advertisement but “transportation” only. • CSR PS-298

15. Nonprofit Standard Mail - Insurance ‘TIF’ • Advertising for any insurance policy is prohibited unless: • Valid nonprofit authorization • Designed for and primarily promoted to members • Coverage is not generally commercially available

16. Nonprofit Standard Mail - Insurance ‘TIF’ • Commercially available insurance generally includes, but is not limited to: • Homeowner’s, property, casualty, marine, professional liability (including malpractice), travel, health, life, airplane, auto, truck, accidental death, Medigap, nursing home, and hospital indemnity insurance.

17. Nonprofit Standard Mail - Insurance ‘TIF’ • Not “generally otherwise commercially available” • applies to the actual coverage stated in an insurance policy, not premiums, underwriting, or financial condition of the insurer. • Consideration is given to coverage benefits, limitations, and exclusions, and to the availability of coverage to the targeted recipients. • The specific characteristics of the mail recipients (geo location or demographics) is considered. • Also not generally otherwise commercially available if the nonprofit is the insurer themselves.

18. Nonprofit Standard Mail - Insurance ‘TIF’ Charitable Gift Annuities (CGA’s) • Annuities are basically insurance to convert a large lump-sum payment into life-long small, incremental paybacks. • CGA's are designed to donate approximately half the lump sum to the charity while giving tax benefits to the donor. • therefore CGA's are not considered "generally commercially available" insurance for the purpose of promotion in NP Std Mail.

19. Nonprofit Std Mail - Financial Instruments ‘TIF’ TIF - Financial Instruments • Prohibited: Any credit, debit, or charge card or similar financial instrument or account, provided by or through an arrangement with any person or organization not authorized to mail at nonprofit prices (There are no exceptions to this rule). Credit Cards & the Adjective Rule • Credit cards by brand, including their logos, may be mentioned as an option of payment, …but only without any adjectives describing the card. This is prohibited. • “Use our ‘low-rate’ affinity credit card that earns you cash-back from all purchases to donate to our annual fundraising drive.”Not eligible!

20. Nonprofit Std Mail - Financial Instruments ‘TIF’ • Advertising for a bank’s services other than prohibited credit cards or other such financial instruments may be mailed at nonprofit rates in Nonprofit Std Mail meeting the content requirements of a periodical publication.

21. Nonprofit Std Mail - Cooperative Mailing Cooperative Mail • A cooperative mailing is one by which an authorized organization arranges with one or more organizations to share the costs, risks, or benefits of the mailing. • Two (or more) organizations may enter a cooperative mailing at nonprofit rates if each of the parties is authorized to mail at nonprofit rates.

22. Nonprofit Std Mail - Cooperative Mailing • An ineligiblecooperative mailing occurs when not all of the cooperating parties are authorized to mail at nonprofit rates • Postage for ineligible cooperative mailings must be paid at Regular Standard Mail rates

23. Nonprofit Std Mail - Cooperative Mailing Factors considered in determining whether the cooperative mailing is ineligible: • Is mailing the product of a joint enterprise or a principal/agent relationship? • Who devised and paid for the design and prepared of the mailpiece? • Who directly or indirectly paid the postage? CSR PS-209

24. Nonprofit Std Mail - Cooperative Mailing • Cooperative Mail Rule –exception to mail at Nonprofit Std Rates when cooperating with a Commercial Fund Raising (CFR) firm to solicit donations. • The commercial entity may “share” the Nonprofit Std Mail authorization, when soliciting funds on behalf of the nonprofit, regardless of their risk, fees, margins and expectations for the effort. CSR PS-333

25. Nonprofit Std Mail -Advertising Exception • An exception to the Substantially Related advertising rule allows authorized Nonprofits to include non-related, general advertising in their newsletters or bulletins. • Called the “advertising exception,” eligibility for the exception requires meeting the “Content Requirements of a Periodical”

26. Nonprofit Std Mail -Advertising Exception Content Requirements of a Periodical Publication in Nonprofit Std Mail: • Have a Title • Published at regular intervals at least 4X per year • Formed of printed sheets • Consist of at least 25% editorial or non-advertising (with a maximum of 75% advertising) • Have and identification statement including… • Publication title (may appear on the cover instead) • Issue date (may appear on the cover instead) • A statement of frequency • Issue Number (consecutive in a series) • Subscription price, if applicable (optional) • Name & address of known office of publication

27. NP Std Mail - Sponsorship vs. Advertising • A business-card-style ad implies… • Individual’s name • Business name • Address* • Phone* or email* or other* • If consideration was paid and contact information is present, it’s an advertisement • If consideration was paid and contact in information is absent, just individual name, business (& logo), it’s sponsorship

28. NP Std Mail Business Card Advertising – Travel ‘TIF’ Implication • Generic business-card-style advertising –- with contact information–-is considered an ad for all the goods or services supplied by the advertiser. (esp. relevant to TIF rules) • Ex : Joe’s Travel “World’s best travel agent!” Email me if you want to go places Travel@arrangements.com'.

29. NP Std Mail Business Card Advertising – Travel ‘TIF’ Implication • But, for example, if the business-card-style ad mentions one or two specific elements of travel alone, it would not be considered ‘travel’ Joe’s Bargain Airfare “Airline tickets are us!” Email me if you want to go places Travel@airticketsonly.com

31. Nonprofit Std Mail - Member Benefits Member Benefits • Rules under DMM 703.1.6.7 allow adjectives, terms, conditions, and brand names to describe member benefits—including travel, insurance, and financial instruments such as credit, debit, or charge cards—to be entered at the nonprofit rates in certain circumstances.  The USPS adopted the new rules to allow nonprofit organizations more latitude to use nonprofit rates to solicit members.

32. Nonprofit Std Mail - Member Benefits • Description of member benefits may accompany a solicitation for funds and must not exceed ½ the solicitation letter or be isolated separately on one additional sheet of paper. • The solicitation or renewal is assumed to be a printed letter. Any included brochure, circular, flyer, or other documents will be considered advertising if they contain any advertising, promotional, or application materials. CSR PS-299

33. NP Std Mail - Personalization • Personalized mail must go 1st Class • Except: • Inclusion of personal info---for example, last year's amount donated---for the purpose of soliciting this year's donation is permissible in Nonprofit Standard Mail if that is the singularpurpose for the personalization.

34. NP Std Mail - Personalization • Personalization such as previous years donation information has to be mailed 1st Class, not NP Std Mail (DMM 243.2.2) unless it contains • Advertising for goods or services for sale or lease - or - • An explicit donation solicitation • All the personal info is included solely in support of the advertisement or solicitation. And… • If this example were also to include "Save this receipt for tax purposes," the reference to the addressee's prior year's donation would have a dual purpose and the mailpiece must go First Class. CSR PS- 262, 322

35. NP Std Mail - Personalization CSR PS-323 “Computer-Prepared Mailpieces Entered by Authorized Nonprofit Mailers” • Examples of personalization • Variations that are considered “solicitation for donation” • Examples of personalization in support of solicitation for donation • Terms that may be used as substitutes to personalization

36. NP Std Mail - Personalization The following language in reference to a prior donation indicates another purpose for inclusion and will make the mailpiece ineligible for Nonprofit Standard Mail rates: • “Tax Receipt” • “Receipt” • “Keep this notice as a receipt for tax purposes.” • “Keep this for your records.”

37. NP Std Mail - Personalization This language will not disqualify the mailpiece for entry at Nonprofit Standard Mail rates provided that nothing indicates another purpose: • “Your contribution may be tax-deductible.” • “No goods or services were provided in exchange for this gift.” •  “The IRS requires written substantiation of charitable gifts of $250 or more”

38. All Mail Classes - Lotteries & Raffles • Lotteries & Raffles • Defined by 3 things (really 4 things): • Chance (“What are my odds of winning?”) • Prize (“What do I win?”) • Consideration (“How much for a ticket?”) • Ticket - a perforated ticket; a serial number printed on each side; one you keep, the other-write your information, tear it off; it goes in a drawing tumbler.

39. All Mail Classes - Lotteries & Raffles • Regulated by the US Dept. of Justice (DOJ), administered by the USPS • …also the state in which you mail. • Wisconsin, for example, may not allow the remedy described to break the federal definition of a raffle for purposes of mailing “tickets.” • DOJ does not enforce the criminal lottery statute (18 USC Sec. 1302) against gambling advertisement mailers if the activity advertised is legal and the mailing does not provide any entry materials, particularly tickets.

40. All Mail Classes - Lotteries & Raffles • Legal Fundraiser Drawing with “tickets” in the mail: • Eliminate “Consideration.” • “Consideration not required to enter drawing. Limit one free entry per person.” • Recommendations • Make the free entry disclaimer in the cover letter. • Print “Suggested Donation $ xx” on the “ticket.” • Do not use the word “ticket.” --anywhere • Describe your financial fundraising goal. • Refer to the “drawing,” not raffle or lottery.

41. Nonprofit Return Address • DMM 703.1.5 states the return address on nonprofit standard mail must identify the authorized organization. • Often interpreted literally by USPS • CSR PS-366 (April 2011) says as long as the name and return address is legitimately the organization’s, it need not be literally the same as the authorization paperwork. • Ex: Conservation Institute instead of Conservation Institute, LLC …is OK • A legit address of the Org near their fulfillment house instead of their HQ would be OK

42. References DMM 703 Nonprofit Standard Mail and Other Unique Eligibility http://pe.usps.com/cpim/ftp/manuals/dmm300/703.pdf or http://pe.usps.com/text/dmm300/703.htm Quick Service Guide 703 Special Standards; Standard Mail - Nonprofit Eligibility http://pe.usps.com/text/qsg300/Q703.htm Publication 417 Nonprofit Standard Mail Eligibility (March 2006) http://pe.usps.com/text/pub417/welcome.htm USPS Customer Support Rulings (All, sortable) http://pe.usps.com/text/CSR/csrtoc.asp (Searchable) Postal Explorer http://pe.usps.com/ .. check "Customer Support Rulings” and enter search term (i.e. "nonprofit") Problems with USPS Business Mail Entry (incorrect determinations) related to USPS Sarbanes-Oxley (SOX) compliance procedures? Email: MailerSoxConcerns@USPS.gov

43. References Business Mail Entry Locator: http://www.usps.com/ncsc/locators/find-bme.html 433 W HARRISON ST RM 4008 CHICAGO IL 60607-9651 Phone : (312) 983-8460 Fax : (312) 983-8484 6801 W 73RD ST BEDFORD PARK IL 60499-9651 Phone : (708) 563-7770 Fax : (708) 563-7703 350 W SAINT PAUL AVE MILWAUKEE WI 53203-9651 Phone : (414) 287-2548 Fax : (414) 287-2500 USPS Mailpiece Design Analyst The MDA Support Center connects customers with a Mailpiece Design Analyst who will provide timely assistance and evaluations of mailpiece design, including Reply Mail. Phone: 855-593-6093 or send a request via email to mda@usps.gov. Hours of operation are Monday through Friday, 8 am – 5 pm, CST. Associations: Direct Marketing Association – Nonprofit Federation Senny Boone, SVP 1615 L Street, NW, Suite 1100 Washington, DC 20036 202.861.2410 SBoone@the-dma.org http://www.nonprofitfederation.org/ Alliance of Nonprofit Mailers Stephen Kearney, Executive Director 1211 Connecticut Avenue N.W., Suite 610 Washington, DC 20036-2705 (202) 462-5132 (202) 462-0423 Fax alliance@nonprofitmailers.org http://nonprofitmailers.org/

44. Contact information Phil Claiborne Director of Circulation (The) Elks Magazine 425 W Diversey Pkwy Chicago, IL 60614-6196 Ph: (773) 755-4910 direct Cellular: (414) 520-5593 Fax: (773) 755-4911 Email: philc@elks.org Alt. Email: philclaiborne@sbcglobal.net twitter: @nonprofitpostal Facebook: “Nonprofit postal”