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A cooperative mailing is a mailing produced by an authorized organization that "cooperates" with one or more organizations to share the cost, risk, or benefit of the mailing. Cooperative mailings may not be entered at the Nonprofit Standard Mail rates unless all cooperating organizations are authorized to mail at these rates at the post office of mailing.
Furthermore, the cooperative mail rule prevents authorized organizations from sharing their authorizations with others who are not authorized. The rule restricts Nonprofit Standard Mail mailings to the authorized organizations' own mail.
For determining whether a mailing is eligible for the Nonprofit Standard Mail rates, the Postal Service evaluates the answers to these questions:
· Who devised, designed, and paid for the mailpiece?
· Who paid the postage on the mailing, either directly or indirectly?
· How are the profits and revenues divided from the mailing or an enterprise it supports?
· What risks are entailed with the mailing or with an enterprise it supports and who bears these risks?
· Who makes managerial decisions about the content of the mailing or the enterprise it supports?
· What are the participants' intentions and interests?
An authorized organization may use a commercial mailing agent (or other unauthorized entity) if the organization can show that the relationship is a legitimate principal-agent relationship. If a question arises whether a mailing is eligible for the Nonprofit Standard Mail rates, the authorized organization must provide, on request, documentation of the relationship that includes all contracts between the organization and other parties to the mailing.
Examples - Acceptable principal-agent relationships
> Authorized university U enters into an agreement with agent A (a for-profit company) to handle university U's conference. Agent A's sole function is to plan and manage the conference. For this function, agent A receives $1,500 (a fixed payment that is consistent with the amount agents typically receive for such services in that city). Agent A enters mailings for university U that are acceptable at the Nonprofit Standard Mail rates. Although the arrangement with agent A is acceptable, arrangements with others might make the mailing an improper cooperative mailing.
> Authorized organization O hires commercial mailing agent C at a fixed fee to print and mail organization O's newsletter at the Nonprofit Standard Mail rates. Organization O's name and return address appear on the envelope containing the newsletter. The envelope shows agent C's permit imprint number (identified with "Nonprofit Organization," "U.S. Postage Paid," etc.). This arrangement is considered an acceptable principal-agent relationship.
Mail matter associated with joint enterprises between an authorized organization and a commercial enterprise (or other unauthorized mailer) is ineligible for the Nonprofit Standard Mail rates. Typically, ineligible cooperative mailings are arranged as follows:
· Both parties contribute something to the mailing:
- A list of names and use of the Nonprofit Standard Mail authorization by the authorized organization.
- Payment of printing or mailing costs by the commercial enterprise.
· Both parties take something out of the mailing (a share of the proceeds or profits).
Example - Ineligible cooperative mailing
> Authorized organization B and grocery store G agree to prepare mailpieces for distribution to organization B's members. Organization B provides its membership list and uses its Nonprofit Standard Mail authorization to enter the mailpieces at the Nonprofit Standard Mail rates. Grocery store G pays the postage and donates to organization B two percent of the sales to organization B's membership during a 1-year period. Because grocery store G pays the cost of the mailing and benefits accrue to it, this improper cooperative mailing is ineligible for the Nonprofit Standard Mail rates.
Qualified political committees are subject to the cooperative mailing requirements. However, unlike cases involving cooperative mailings between an authorized nonprofit organization and a commercial organization, there is often an ongoing relationship between the qualified political committee and the committee's candidate.
A political candidate may be connected to the authorized political committee mailer by being a member of and/or financial contributor to the political party represented by the committee. The committee is, of course, interested in promoting, encouraging, and supporting the candidate's election.
Postal laws and regulations do not prohibit the candidate from contributing to the committee or the committee from supporting the candidate. The concern under postal laws and regulations is whether the political candidate's financial contribution to the authorized political committee is in return for the mailing or mailings that support the candidate.
Example - Proper use of contributed funds
> Politician A is a member of the qualified political committee. The qualified political committee plans to include in a mailpiece information supporting politician A's candidacy for office and has asked the candidate for a biographical sketch. The candidate provides the information and makes a contribution to the qualified political committee. The qualified political committee will retain authority to accept or reject information provided by the candidate, and the contribution by the candidate is not a contribution to pay for the mailing. This is not considered to be a cooperative mailing because the qualified political committee retained discretion over the decision to mail and the contents of the mailing.
An authorized political committee may mail election-related materials, including but not limited to candidate endorsements and sample ballots, at the Nonprofit Standard Mail rates if the materials are exclusively those of the authorized political committee. An authorized political committee may make political mailings in support of its candidates, provided that no monies contributed by the candidate to the qualified committee shall be specifically earmarked for use in making the political mailing or in return for the political mailing.
Example - Committee discretion retained
> Politician B, a candidate for a statewide political office, mails a check to authorized political committee C, the state committee for his party. Politician B encloses a note with the check that says: "This check is for my pro rata share of a sample ballot." Committee C has mailed a sample ballot to state residents for the past five elections. However, committee C makes the decision on whether to send sample ballots on an election-by-election basis. Committee C has not had any discussions with politician B on this subject, nor has it reached an understanding with politician B that sample ballots will be produced and mailed. Committee C deposits politician B's check into its general fund to be used for committee expenses. Committee C will not return the check even if it decides not to mail sample ballots. Committee C later decides to mail sample ballots for the election in which politician B is a candidate. Notwithstanding politician B's contribution, this is not considered to be a cooperative mailing because committee C retained discretion whether or not to mail the sample ballots.
A candidate may make or solicit contributions to a qualified political committee, provided that the committee retains absolute discretion over how the funds are spent. If the candidate or other nonqualified entity pays the preparation, printing, or postage costs for the mailing in return for the qualified political committee's agreement to make the mailing, that mail matter is not eligible for the Nonprofit Standard Mail rates.
A political candidate may provide suggested copy, pictures, biographical information, or similar assistance requested by a qualified political committee that is preparing a mailing in support of the candidate. The qualified political committee may also ask a candidate to review a proposed mailpiece for accuracy. However, the qualified political committee must have final authority over the decision to mail the political matter and the contents of that matter.
Example - Improper candidate funding
> Authorized political committee D announces the creation of a "Candidate's Coordinated Mailing Fund." Contributions to the fund will be used exclusively for mailings supporting candidates. Candidates E, F, G, and H contribute to the fund, and committee D makes a multicandidate endorsement for candidates E, F, G, H, and I. This would be considered a cooperative mailing. It would not be a cooperative mailing if (a) the fund created is not announced as one that will be used exclusively for mailings, and (b) committee D retained absolute discretion as to whether or not to make the mailings at all.
Mailings by qualified political committees often bear endorsements such as "Paid for by [committee] and authorized by [candidate]." These endorsements are often required by federal or state law. The presence of these endorsements alone does not disqualify the mailing from being sent at the Nonprofit Standard Mail rates. The presence of factors discussed in the preceding sections of this chapter is required to find the mailing ineligible for the Nonprofit Standard Mail rates.