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NOT-FOR-PROFITS AND THE UNITED STATES POSTAL SERVICE
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By Ashley Jones, CPA
– Senior Accountant
When a company experiences a $15.9 billion dollar loss in one year, changes are bound to be made. In November 2012 the United States Postal Service reported just that, a record setting loss with more to come in 2013. Although $11.1 billion of that loss was due to retiree health benefit payments, which the postal service defaulted on, and other non-operating expenses, an operating loss of $2.4 billion is still alarming and demands changes.
Recent consumer activity shows a 14% increase in package delivery and a decline in letters and other mail over the last few years. To address consumer demands and cut costs, the post office is proposing ending regular mail delivery on Saturdays, but still delivering packages and keeping post offices open. The change, scheduled to take effect August 5, 2013, is estimated to save the Postal Service $2 billion dollars over the last few years.
Tony Conway, Executive Director of the Alliance of Nonprofit Mailers, feels that this is something not-for-profits can support and even prefer over other options such as increasing postage. In reality however, some of the postal service's new cost saving measures are being seen as unfair to the not-for-profits. For example, of the six new discount rates only one is lower than the old rate for not-for-profits. With the gap between nonprofit and for profit rates closing, for-profit mailers seem to be the only ones benefiting from the new rates.
Although Congress has not yet approved the new delivery proposal, they are considering different options to improve the Postal Service's financial situation and while the effect on not-for-profits is uncertain at this time, changes are certainly coming. Sources: http://www.ohioscpa.com/publications/news/2013/02/07/nonprofits-feel-sting-of-new-postal-rules (* Link removed by www.ohiocpa.com) and The NonProfit Times
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