 |
Authorized medical educational association H concentrates on diseases of the heart and circulatory system and publishes a journal three times a year. The journal is circulated to members. According to the association's annual dues statement, $10 is devoted to pay for the subscription to the journal. Each issue of the journal bears a cover price of $6, copies are sold at various retail outlets, and annual subscriptions are available to nonmembers of the association for $15.
The primary contents of the journal include academic articles by researchers and physicians concerning developments in heart and circulation system research and treatment of related diseases. The journal consists of about 25 percent advertisements, which include advertisements by organization H for books that it produces, advertisements by other nonprofit organizations for their publications, advertisements by for-profit medical supply companies for pharmaceutical products and medical supplies and equipment, and a few advertisements for luxury automobiles.
H seeks to mail the journal at the Nonprofit Standard Mail rates.
The analysis by each step follows:
· Step 1 asks whether the mailing is a product or contains products. The publication itself is considered a product because it bears a price and is sold to readers.
· Step 2 asks whether the product to be mailed meets one of the three statutory product provisions. The publication was not donated to organization H. However, taking all expenses into account, organization H determines that its cost for each copy of the publication is $1.25. Accordingly, the publication is a low-cost item.
If the publication was not low-cost, it would have been necessary to consider the "periodical publication" exemption. A periodical publication must have a title, be issued at regular intervals of at least four times a year, be formed of printed sheets, be issued from a known office of publication, as well as meet certain other requirements applicable to a specific Periodicals qualification category and be circulated to a legitimate list of subscribers or requesters, as appropriate. Because the publication is issued only three times a year, it does not meet these requirements.
· Step 3 asks whether there are advertisements. There are advertisements, which were described in the description of the facts.
· Step 4 asks whether there are prohibited or restricted advertisements. There are no advertisements for financial instruments (prohibited) or for travel arrangements or insurance policies (restricted). Thus, the specific restrictions for these types of advertisements do not need to be considered.
· Step 5 asks whether the advertisements are in material meeting the content requirements for a periodical publication. This publication has a title, consists of printed sheets, has an identification statement containing each of the elements listed in 6-3.5.2, and contains more than 25 percent nonadvertising matter. Accordingly, association H's mailing meets the content requirements for a periodical publication and is eligible for mailing at the Nonprofit Standard Mail rates, despite the advertisements included in it.
For determining whether advertisements are part of material that meets the "content requirements for a periodical publication" (step 5), it is not necessary that the publication meet all requirements prescribed for periodical publications (see 6-3.5). The identification statement should describe the publication's frequency as three times a year and the approximate publication dates.
· Step 6 asks whether all advertising in the mailpiece is substantially related to association H's purposes. It is not necessary to consider this step in this case because the mailpiece complied with the requirements in step 5.
If the mailpiece had not met the content requirements for a periodical publication, it would have been necessary to consider whether each advertisement in the publication was substantially related to the purposes of the qualified organization. Because luxury automobiles do not appear to be related to the association's purposes, the advertisements (and the mailpiece containing them) would not have qualified for mailing at the Nonprofit Standard Mail rates.
This publication is eligible for mailing at the Nonprofit Standard Mail rates.
Authorized association H (described in case study 1) mails a letter to nonmembers requesting donations. The letter states that individuals donating more that $1,000 will receive an electronic cholesterol measuring device and that individuals donating between $500 and $1,000 will receive a copy of each of the five books that the association will publish in the upcoming year. (These items are generally called back-end premiums.) The mailpiece also contains an advertisement and subscription order form for the journal described in case study 1. Association H seeks to enter this mailpiece at the Nonprofit Standard Mail rates.
The analysis of the mailpiece by the six-step process follows:
· Step 1 - The mailpiece contains no products.
· Step 2 - This step need not be considered because the mailpiece contains no products.
· Step 3 - The mailpiece contains advertisements for the journal and for the back-end premiums (the cholesterol measuring device and the five books).
· Step 4 - The mailpiece contains no advertisements for financial instruments (prohibited) or for travel arrangements or insurance policies (restricted).
· Step 5 - The mailpiece does not meet the content requirements for a periodical publication (that is, the mailpiece has no title and no identification statement, and the mailpiece does not contain 25 percent nonadvertising).
· Step 6 - The electronic cholesterol measuring device and books (back-end premiums) appear to be substantially related to the authorized organization's purposes. Likewise, the advertised journal is substantially related to association H's purposes. (By law, advertisements for periodical publications of an authorized organization do not have to meet the substantially related test if they meet the Periodicals eligibility requirements. However, as noted in case study 1, association H's journal does not meet these requirements.)
This mailpiece is eligible for mailing at the Nonprofit Standard Mail rates.
The mailpiece of organization A, an authorized college (educational organization), contains an advertisement for its periodical publication, a sweepstakes entry form bearing the endorsement "No purchase necessary to enter," and a request for donations. The mailpiece is published annually and does not contain a title, identification statement, or at least 25 percent nonadvertising matter.
As described, the mailpiece does not contain any products. Therefore the product rules do not apply. The mailpiece contains only one advertisement (that is, the information pertaining to the periodical publication is advertising). The request for donations and the sweepstakes entry information are not considered advertisements for products and services because no purchase is required. The mailpiece does not meet the "content requirements for a periodical publication" (that is, the mailpiece does not contain sufficient nonadvertising material, a title, or an identification statement). The advertisement for the periodical publication is eligible for mailing at the Nonprofit Standard Mail rates because the publication is substantially related to the authorized organization's purposes.
As noted in case study 2, the law permits advertisements for periodical publications, regardless of the contents of the periodical publication. To be considered a periodical publication, a publication must have a title, be published at regular intervals at least four times a year, be formed of printed sheets, have an identification statement, have a known office of publication, and meet the eligibility requirements prescribed for one of the Periodicals categories for publications (for example, a general publication, a requester publication, or a publication of an institution or society).
The advertisement is eligible for mailing at the Nonprofit Standard Mail rates.
An authorized educational organization's mailpiece contains only this statement: "Members are entitled to obtain life insurance, a credit card, and free tax preparation assistance; write for details. Send your monetary donations by May 1, 1996. We have negotiated favorable rates with X hotel for members who will be attending the fundraising activities the weekend of October 6, 1996. Call 111-111-1111 and reserve your room for $60 per night."
The content of this mailpiece can be analyzed as follows:
· This mailpiece does not contain any product. Therefore, the product rules do not apply.
· The mailpiece does contain one advertisement: the information pertaining to the organization's fundraising activities. This information is considered a substantially related advertisement because all the work is done by the authorized organization's members or supporters without compensation.
· The mailpiece does not contain any prohibited or ineligible restricted advertisement.
· The mailpiece does not meet the content requirements for a periodical publication.
· The mailpiece contains other material that is not considered advertising for these reasons:
- The statements about life insurance and a credit card as stated are permissible references to membership benefits, rather than advertisements, and are eligible for mailing at the Nonprofit Standard Mail rates.
- The request to send donations is not considered an advertisement because nothing is being sold.
- The information about the hotel's room rate is not an advertisement for the hotel (assuming the hotel did not compensate the authorized organization for the reference).
- The information about tax preparation is not an advertisement because nothing is sold.
There are no other arrangements or conditions that make the mailpiece ineligible for mailing at the Nonprofit Standard Mail rates. This mailpiece is eligible for mailing at the Nonprofit Standard Mail rates.