[Congressional Record Volume 147, Number 48 (Wednesday, April 4, 2001)]
[House]
[Pages H1463-H1464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    URGING MEMBERS TO SUPPORT LEGISLATION TO CLARIFY LAW REGARDING 
                 FUNDRAISING BY NONPROFIT ORGANIZATIONS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Maryland (Mr. Ehrlich) is recognized for 5 minutes.
  Mr. EHRLICH. Mr. Speaker, I rise today to announce the introduction 
of legislation that would help clarify the law regarding fund-raising 
by nonprofit organizations.
  I want to first recognize and thank the gentleman from Indiana (Mr. 
Burton), the chairman of the Committee on Government Reform, who is 
sponsoring this bill with me for his leadership on this important 
issue.
  Congress recognized the many important and worthwhile activities of 
nonprofits by establishing a nonprofit mail

[[Page H1464]]

rate for charities, churches, educational advocacy, and other nonprofit 
organizations. These are enumerated in the Postal Reorganization Act of 
1970.
  One of Congress's objectives was to make it more affordable for 
nonprofits to collect donations to fund their activities. For a mail 
piece to be eligible for the lower rate, Congress prescribed two 
requirements: First, the organization or mailer must be qualified to 
mail at the nonprofit rate; and second, the qualified organization must 
own the mail piece.
  Over the last several years, Mr. Speaker, the United States Postal 
Service, which has made great strides under Postmasters Runyon and 
Henderson, has increasingly applied the statutory standard of 
``ownership'' in a way that may have a chilling effect on the use of 
nonprofit mail rates to obtain donations for charity, education, and 
advocacy.
  The purpose of the bill that the gentleman from Indiana (Chairman 
Burton) and I are sponsoring is to clarify ambiguities existing in both 
law and postal service regulations with respect to fund-raising.
  The bill clarifies the law so the postal service does not read the 
statutory ``ownership'' test so literally as to disqualify fund-raising 
mail sent by otherwise eligible nonprofit organizations that negotiate 
a risk-sharing agreement with respect to their fund-raising mail.
  In my view, Mr. Speaker, it is imperative that otherwise qualified 
nonprofit organizations be able to secure donations at the lowest 
possible cost. When nonprofits conduct activities that further purposes 
enumerated in the statute, for example, to provide safety net social 
services, they ease the burden on taxpayers and deliver high quality 
services to all Americans.
  This Congress is asking nonprofits to provide services the government 
has traditionally been ineffective and inefficient in providing. Given 
this purpose, it would be irrational for Congress to limit use of the 
nonprofit bill rate only to fund-raising campaigns that raise donations 
sufficient to pay mailing costs.
  It is important to point out that our bill is not a back door to 
allow unauthorized parties to mail at the nonprofit rate. Current law 
restricts an otherwise qualified organization from utilizing the 
nonprofit rate to sell goods or services. Seeking a donation, however, 
is different from promoting the sale of a product or service.
  Furthermore, Mr. Speaker, Congress has instituted reforms limiting a 
nonprofit's use of the special mail rate to sell products and services. 
This bill does not affect the reforms Alaska Senator Ted Stevens set in 
motion in the 1980s in that regard.
  This bill also recognizes the subsequent reform Congress enacted to 
require sales promoted at the nonprofit rate to be substantially 
related to the purpose for which the nonprofit qualified for the 
nonprofit rate.
  More importantly, Mr. Speaker, this bill does not limit the postal 
service's authority to enforce any other section of the Federal postal 
statutes. Accordingly, the postal service retains all of its tools to 
discover and prosecute fraud, a mission I strongly support.
  The problem addressed by this bill is the postal service's present 
interpretation of the statutory ``ownership'' standard, which is 
causing litigation and inconsistent application in nonprofit fund-
raising cases.
  Respectfully, I ask my colleagues to join me in supporting this 
important legislative measure.

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