Individual Donations: A Postal Issue?
How much does individual giving in Canada depend upon Canada Post? And, conversely, how much does Canada Post depend upon the nonprofit sector? Should fundraisers care about postal rate increases, unpredictable labour disruptions and the future of mail service?
In Canada, about 14 percent of the $9.6 billion dollars in charitable giving is donated in response to a direct mail piece.(1) That’s a whopping $1.3 billion dollars donated by messages sent using Canada Post. On top of outgoing appeals for donations, there are also millions of reply envelopes carrying cheques and credit card donations back to charities. But mail also inspires a growing number of online donations and still, after 20 years of the internet, only 7 percent of donations are given online. (2)
Canada Post’s 2018 annual report (3) states that it carries about 850 million pieces of Personalized Mail (or Admail as we once called it) among their nine billion parcels, magazines, flyers and bills. Personalized Mail is the postal rate that most fundraisers use to send direct mail and other marketers do too. But you’ve probably noticed fewer personalized pieces of mail from financial, auto and retail companies these days as they turn to non-printed promotional channels–ones that often don’t seem to work as well for charities.
So, who is sending those 850 million pieces of Personalized Mail? My estimate is that more than half of Canada Post’s revenue for this category of mail comes from the nonprofit sector. How else could $1.8 billion dollars of mail donations be achieved? It takes hundreds of millions of pieces of mail to inspire that many gifts. Having been in the direct mail business for years, I watch millions of pieces leave our facility annually and have grown an appreciation for what the nonprofit sector produces across the country.
On top of appeals, charities send millions of tax receipts and thank you letters at full Lettermail rates, which contribute millions more in revenue for Canada Post. The Personalized Mail postage rate for a typical DM mailer is currently $0.485 per piece and Lettermail is $0.87 per piece, which translates into hundreds of millions of dollars in expense for charities and millions of dollars in revenue for Canada Post. The nonprofit sector may just be Canada Post’s biggest “customer category.” But do they realize this? Do we?
Asked for comment, Canada Post replied, “Canada Post is proud to play an important and long-standing role in helping charities reach potential donors, receive donations and send notes of appreciation or tax receipts. Fundraising through the mail continues to be highly-effective and we are looking at options that would allow us to better serve this important segment of Canadian organizations.”
Next time fundraisers learn that Canada Post workers may go on strike or that Parliament is considering postage increases, I’d suggest that the nonprofit sector stand up and be heard. Charitable revenue in Canada is dependent upon a strong, affordable and reliable postal system. Similarly, Canada Post is dependent on charities who use mail effectively and systematically with great success, year after year.
Steve Falk is a member of the AFP Canada Government Relations Committee and the president of Prime Data, a data-driven marketing services company.Steve Falk is a member of the AFP Canada Government Relations Committee and the president of Prime Data, a data-driven marketing services company.