DMANF TESTIFIES ON UNIVERSAL SERVICE OBLIGATION OF US POSTAL SERVICE AND POSTAL MONOPOLY

Washington, DC., May 21, 2008 — In testimony submitted today at a Postal Regulatory Commission (PRC) public hearing in Flagstaff, AZ, Matt Panos, a member of the Direct Marketing Association Nonprofit Federation (DMANF) Advisory Council and vice president of ministry partnerships and resources at Food for the Hungry, raised questions about the Commission’s proposed definition of Universal Service Obligation (USO) and urged the PRC to take additional time to analyze how that definition will affect nonprofit organizations and their ability to raise money through the mail.

“We know you have to provide a detailed set of findings based on postal reform law, but it is too early to fully offer all answers given all that the postal community faces,” Panos told the PRC. “Moreover, as mail users, we need an opportunity for more in-depth quantitative analysis to determine the effect on nonprofits.”

While praising the Commission for its timeliness in scheduling the hearing — particularly in light of the recent passage of postal reform — and for its willingness to explore a wide range of issues, Panos responded to the PRC’s questions regarding the Universal Service Obligations and the current postal monopoly by making the following points:

• In addressing the scope of the Universal Postal Service, Panos recommended that the PRC examine its definition of USO in light of the changes rendered by the recent postal reform law that provides for a price index based on the Consumer Price Index (CPI). He noted that the new index and how it impacts rate levels based on the measures of “fair and reasonable” may no longer be the same since it is tied to an economic metric, yet fairness is a key factor for the many kinds of mail users in the postal system.

• Regarding the Universal Service Obligation, Panos noted that, for charities, mail security — ensuring that their communications go out without any tampering, and ensuring that donors’ gifts return to their organization without threat of theft — is a key reason that charities rely on the US Postal Service. Consequently, Panos urged caution when the Commission examines the mailbox monopoly issue, so that the mail system remains one of the most secure communications channels in the country.

• On the issue of rates and affordability of service, Panos argued that, for nonprofits, affordability is the most important factor in use of the US Postal Service. If a price increases for a nonprofit organization, said Panos, this will translate into a reduction in its ability to serve its beneficiaries. To that end, he urged the PRC to keep charities in mind as they examine this important area of the USO.

• Lastly, Panos addressed the challenge that the Postal Service is facing in the states with regard to Do Not Mail (DNM) legislation. If a Do Not Mail bill passes, said Panos, “it would gut the universal service obligation by allowing the states to regulate and govern the mailbox, leading to a decline in postal volume, less revenues, less support for the Postal Service infrastructure, and leading ultimately to the demise of this basic government service.”

Panos concluded his testimony by noting that nonprofit organizations “cannot survive without a healthy and thriving USPS for many decades to come.” To that end, he expressed hopefulness that the PRC’s decisions and the ultimate definition of the USO “retain the services needed by the nonprofit community in order to ensure that they can continue to raise money to support their missions.”

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About the Nonprofit Federation of the DMA

The Nonprofit Federation of the Direct Marketing Association (DMA) is the leading association for nonprofit organizations that use direct marketing channels such as mail, Internet, email, telephone, and social networking to gain support from individual donors. For more than 25 years, the Nonprofit Federation (and its predecessor organizations) has served as an effective advocate for nonprofits both in Washington, DC and in all 50 states regarding postal rates and delivery service, data protection, fundraising accountability, and other legislative and regulatory issues that affect nonprofit fundraising. It also leads the way in professional education, market intelligence, and networking for its more than 400 member organizations. In 2006, Americans gave $222 billion to nonprofit organizations; the majority of those donations were the result of direct marketing. For additional information on the Nonprofit Federation, its work, and its member benefits, visit www.nonprofitfederation.org.

About Food for the Hungry

Food for the Hungry (www.fh.org) is a Christian International Relief and Development organization with its U.S. national headquarters in Phoenix, Arizona. Its mission is to walk with church leaders and families in overcoming all forms of human poverty by living in healthy relationship with God and His creation.

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