DMA STUDY SHOWS POSTAGE RATE INCREASE DRIVES ELECTRONIC DIVERSION OF NONPROFIT FUNDRAISING
SAN FRANCISCO, October 22, 2002 – The Direct Marketing Association (The DMA) today announced that the most recent postage rate increase not only hurt program delivery by nonprofit organizations, but also is encouraging them to employ alternative channels, draining money away from the postal system.
The DMA conducted the study of its Nonprofit Federation membership to gain insight into the impact of postage rate increases on this sector as it struggles to deal with a call to provide additional services even more than a year after the events of September 11, 2001.
“We found two disturbing dynamics that seem to feed on each other,” said H. Robert Wientzen, president & CEO, The DMA. “The albeit small, but negative impact of the increase on the organizations’ ability to deliver services to their constituencies and increasing fiscal pressure to test and adopt electronic diversion strategies. The latter one is particularly troubling for the future of the Postal Service.”
“Given the close dependence of nonprofit organizations on direct mail for fundraising, especially so with charities, it is clear that postage rate increases must only be undertaken as a last resort,” said Senny Boone, executive director, The DMA Nonprofit Federation.
“The rate increase had three measurably negative effects,” said Peter Johnson, senior economist, The DMA. “The ability to raise funds and deliver program; the share of their budgets accounted for by direct mail fundraising and program delivery; and in their prospective reactions to rate increases, in terms of both reducing existing mail costs and in terms of finding alternatives to the mail,” said Johnson.
Copies of the results and the study can be found online at http://www.the-dma.org/cgi/disppressrelease?article=363
The DMA is the leading trade association for businesses
interested in interactive and database marketing, with nearly 4,700 member
companies from the United States and 53 other nations. Founded in 1917, its members include direct
marketers from every business segment as well as the nonprofit and electronic
marketing sectors. Included are
catalogers, Internet retailers and service providers, financial services
providers, book and magazine publishers, book and music clubs, retail stores,
industrial manufacturers and a host of other vertical segments, including the
service industries that support them. According to a DMA-commissioned study, direct and interactive
marketing sales in the United States exceeded $1.86 trillion in 2001, including
$118 billion in catalog sales and $30 billion in sales generated by the Internet. The DMA's Web site is www.the-dma.org, and its consumer Web site is www.shopthenet.org.
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