[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[Extensions of Remarks]
[Pages 27296-27297]
[From the U.S. Government Publishing Office, www.gpo.gov]



          FUNDRAISING SOLICITATIONS BY NONPROFIT ORGANIZATIONS

                                 ______
                                 

                      HON. ROBERT L. EHRLICH, JR.

                              of maryland

                    in the house of representatives

                       Friday, December 15, 2000

  Mr. EHRLICH. Mr. Speaker, I wish today to announce the introduction 
of legislation that will help clarify the law regarding fund-raising 
solicitations by nonprofit organizations. I also want to recognize the 
efforts of my colleagues, House Government Reform Chairman Dan Burton 
and House Postal Service Subcommittee Chairman John McHugh, for their 
leadership on postal service issues.
  Mr. Speaker, as you may know, Congress recognized the many important 
and worthwhile activities of nonprofits by establishing a nonprofit 
mail rate for charities, churches, educational, advocacy, and other 
nonprofit organizations. These are enumerated in the Postal 
Reorganization Act of 1970. One of Congress'

[[Page 27297]]

objectives was to make it more affordable for nonprofits to solicit 
donations to fund their activities.
  For a mail piece to be eligible for the lower nonprofit 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, 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 
solicit donations for charity, education, and advocacy.
  The purpose of the bill I am introducing today is to clarify 
ambiguities existing in both law and Postal Service regulations with 
respect to fundraising. The bill clarifies the law so the Postal 
Service should not read the statutory ``ownership'' test so literally 
as to disqualify solicitation mail sent by otherwise eligible nonprofit 
organizations that negotiate a risk-sharing agreement with respect to 
their solicitation mail.
  In my view, it is imperative that otherwise qualified nonprofit 
organizations be able to solicit donations at the lowest possible cost. 
When nonprofits conduct activities that further the purposes enumerated 
in the statute, for example to provide ``safety net'' social services, 
it eases the burden on government and taxpayers.
  During a time in which Congress is attempting to allow taxpayers to 
keep more of their hard earned money, it would be advantageous for 
nonprofits to solicit individuals and families, who thanks to tax 
relief and their own individual initiative may have an extra few 
dollars to send to their favorite charity. Likewise, this Republican-
led Congress is asking nonprofits to provide services the government 
has traditionally been ineffective or inefficient in providing.
  Given this purpose, it would then be irrational for Congress to limit 
use of the nonprofit mail rate only to fundraising campaigns that raise 
donations sufficient to pay all solicitation costs. Otherwise qualified 
nonprofit organizations need to be able to negotiate the best deal they 
can for the professional fund-raising services the organization needs--
whether it is creative, copyrighting, list analysis, mail piece 
introduction, or data entry.
  It is important to point out the bill I am introducing 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. There are 
restrictions whether the item offered for sale is related to the 
organization's purpose or unrelated. Soliciting a donation, however, is 
different from promoting the sale of a product or service.
  Furthermore, Congress has instituted reforms limiting a nonprofit's 
use of the special mail rate to sell products and services. The bill I 
am introducing today does not affect the reforms Alaska Senator Ted 
Stevens set in motion in the mid-1980s in this regard.
  The 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, 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 that 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 solicitation cases.
  I am aware of the ongoing discussions within the Postal Service and 
with nonprofit organizations to resolve this issue. I remain hopeful 
the Postal Service can correct this issue without Congressional 
intervention. Hopefully, this bill will encourage all parties to 
continue their constructive dialogue and, perhaps, prevent further 
unnecessary litigation.

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