Postal Rate Increases and More … Are You Ready, Nonprofits?

Postal Rate Increases and More … Are You Ready, Nonprofits?

Strap yourself in because there is a lot more than just a simple rate increase coming with the changes taking effect on July 13, 2025. In addition, there are a few interesting things taking place between the USPS and the Postal Regulatory Commission (PRC), and, dare I say, there may even be a small glimmer of hope!

The July 2025 rate increase is more complicated than those in previous years because in addition to rate increases, the USPS is implementing modifications to some of the standards (workshare rules) used to calculate rate discounts.

Below is the quick snapshot of the rate changes that I am sure many of you have seen over the past few months. However, the key word you must focus on in the snapshot is average.

  • First-Class stamp: 5-cent increase; new rate: 78 cents
  • Domestic postcards: 6-cent increase; new rate: 62 cents
  • Marketing Mail letters: average increase of 7.8%
  • Marketing Mail flats: average increase of 9.7%
  • Periodicals: average increase of 9.4%
  • Nonprofit Marketing Mail: average increase of 7.95%

Why average? Because presort rates and discounts depend on how much work a mailer does for the USPS, and those workshare rules are changing.

The USPS is eliminating the Network Distribution Center (NDC) / Destination Network Distribution Center (DNDC) discount for Marketing Mail, Periodicals, and Bound Printed Matter. Additionally, Sectional Center Facility (SCF) discounts have been reduced.

This means depending upon your list saturation and how you have been mailing (presort, dropship, commingle), you could see a larger or smaller increase than the averages listed above. For example, if you have a high saturation list going to an SCF, you could see an increase as high as 10.3% for your Nonprofit Marketing Mail letter.

What can you do?

In a nutshell – continue to implement best practices. They still work!

  • Clean your mailing list to reduce waste and reach more mailboxes.
  • Run postal evaluations to make sure you are maximizing postal efficiencies.
  • Explore the USPS promotions and incentives. Not all of them will be cost effective for nonprofits, but find out which ones are and take advantage of them.
  • Evaluate segments and target your best audience.*
  • Explore commingling, even for First-Class Mail.*

* Don’t just take these steps without testing.

What’s on the horizon?

What's on the horizon for this summer's postal rate increases

Here are some interesting things we all need to understand and watch to see how they develop:

  1. The USPS introduced the Regional Transportation Optimization (RTO) initiative, which involves eliminating afternoon mail collections at 75% of post offices nationwide, potentially leading to delays in outbound mail delivery.
  2. The USPS filed a proposal with the PRC seeking to modify the product descriptions for First-Class Mail, Marketing Mail, and Periodicals. These changes, according to the USPS, are being implemented to better align pricing/cost to the USPS updated logistical network structure. This includes implementing zoned pricing based on driving times between originating and destination centers. The proposal also updates workshare discounts and could mean a change in dropshipping discounts. For more information, see the posting in the Federal Register
  3. This is the small glimmer of hope. On June 9, 2025, the PRC filed two orders looking to revise the rate system.

    In the first order, the PRC determined that the current system for regulating rates and classes for market-dominant products – those for which the USPS has a near monopoly and faces limited direct competition, including First-Class Mail, Marketing Mail, Periodicals, and Package Services like Library Mail – is not achieving the objectives of the Postal Accountability and Enhancement Act.

    The second order made two proposals:

Let us help you get ready!

As you can see, there is much going on with the USPS that will affect nonprofit fundraising. But you don’t have to figure it all out on your own – the IDM Production team is here to assist you. Please contact me if you have any questions.

You can’t stop the postal increases, but you can survive them. Don’t panic, be smart, and test, and your direct mail will deliver!

Bill Buckley