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On October 1, 1995, new content-based restrictions took effect for the mailing of products and for the mailing of advertisements for products and services at the Nonprofit Standard Mail rates. The new restrictions are in addition to existing regulations for prohibited and restricted advertising (see 6-3.4),
The new content-based restrictions concern these two areas:
· Whether a product is eligible for mailing at the Nonprofit Standard Mail rates.
· Whether an advertisement for a product or service is eligible for mailing at the Nonprofit Standard Mail rates.
On November 5, 1990, the President signed into law Public Law 101-509, the Treasury, Postal Service and General Government Appropriations Act for 1991, adding new subsection (j) to 39 U.S.C. 3626. This provision prohibits the mailing of material at the Nonprofit Standard Mail rates if it contains advertising for credit, debit, or charge cards or similar financial instruments or accounts. This provision also restricts the mailing of material at the Nonprofit Standard Mail rates if it contains advertising for insurance policies and travel arrangements.
On October 28, 1993, the President signed into law Public Law 103-123, the Treasury, Postal Service and General Government Appropriations Act for 1994. Title VII of the Act, the Revenue Forgone Reform Act, amended 39 U.S.C. 3626 by adding provisions to subsection (j) and new subsection (m). The new provisions in subsection (j) add additional advertising restrictions; new subsection (m) restricts the mailing of products at the Nonprofit Standard Mail rates.
On September 30, 1994, the President signed into law Public Law 103-329, the Treasury, Postal Service and General Government Appropriations Act for 1995, amending Public Law 103-123, which is a revision to 39 U.S.C. 3626(j). This amendment creates an exemption to the statutory provisions for advertisements printed in material that meets the content requirements for a periodical publication as prescribed by the Postal Service.
When considering eligibility for mailing at the Nonprofit Standard Mail rates, the law distinguishes between products and advertisements for products and services. (For a detailed analysis of these rules, see the six-step process in 6-3.)
A product may be mailed at the Nonprofit Standard Mail rates if it meets certain statutory provisions. Under the test for mailing products, it is irrelevant whether a product is substantially related to one or more of the authorized organization's purposes. An advertisement for a product or service, however, must be substantially related to one or more of the authorized organization's purposes, unless the advertisement is in material that meets the four Postal Service content requirements for a periodical publication.
Although a product itself can be eligible for mailing at the Nonprofit Standard Mail rates, an advertisement for that same product still requires applying the content-based restrictions for advertisements. In summary, a product might be eligible for mailing at the Nonprofit Standard Mail rates, but the advertisement for that product or service might not be eligible for mailing at these rates, and vice versa.
Example - Product versus advertising standards
> A church buys Bibles at $10 each. Even though the Bibles are substantially related to the purposes of the church, the Bible is ineligible for the Nonprofit Standard Mail rates because it does not meet any statutory provision for mailing a product. However, advertisements for the Bible are eligible for the Nonprofit Standard Mail rates because the Bible is substantially related to the purposes of the church.
On the other hand, if the church buys key rings for $2 each, the key ring is eligible for mailing at the Nonprofit Standard Mail rates because it meets the statutory product provision for low-cost items. Advertisements for the key rings are ineligible for the Nonprofit Standard Mail rates, unless the key rings are substantially related to one or more of the purposes of the church or the advertisement is in material that meets the content requirements for a periodical publication.
The following six-step process (discussed in detail in 6-3) can help you decide whether your mailpiece is eligible for Nonprofit Standard Mail rates under current content-based rules. (Other requirements must also be considered for determining that a mailpiece may be mailed at the Nonprofit Standard Mail rates. For example, see the cooperative mail rule and other requirements in 4-3.) The flow chart in exhibit 6-2 summarizes these steps:
· Step 1: Examine the mailpiece for products (see 6-3.1).
· Step 2: Determine whether the product to be mailed meets one of the three statutory provisions for mailing at the Nonprofit Standard Mail rates - that is, the product is a low-cost item, a donated item, or a periodical publication (see 6-3.2).
· Step 3: Examine the mailpiece for advertisements (see 6-3.3).
· Step 4: Determine whether the mailpiece contains any prohibited or restricted advertisement (see 6-3.4).
· Step 5: Determine whether the mailpiece meets the content requirements for a periodical publication - also referred to as the "space advertisement exception" (see 6-3.5).
· Step 6: Determine the substantial relatedness of each advertised product or service (see 6-3.6).
Examine the mailpiece for products. Consider these two conditions and proceed as follows:
· If the mailpiece is a product or contains a product, go to step 2.
· If the mailpiece is not a product and does not contain a product, the content-based restrictions for products do not apply. You must next determine whether the mailpiece contains any advertising (discussed in steps 3 through 6). Skip step 2 and go to step 3.
Under the law, the restrictions on mailing products at the Nonprofit Standard Mail rates have an extremely broad reach. These restrictions can apply to utilitarian items, publications (such as books), and some periodical publications. For a discussion about the general provisions for mailing a product as well as the specific provision for mailing a periodical publication, see step 2.
A front-end premium is an item that an organization mails with a solicitation requesting a donation. A back-end premium is an item that an organization mails in return for a donation previously made to the organization.
Even though these premiums are usually connected with a donation to the authorized organization, they must be treated like any other product to determine eligibility for mailing at the Nonprofit Standard Mail rates.
Examples - Product rules apply
> For fundraising, authorized organization A sends a front-end
premium - a mailpiece containing a box of greeting cards and a letter stating:
"These cards are yours to keep. We ask that you consider sending a small
donation to our organization." The greeting cards are considered a product.
The product rules (steps 1 and 2) must be applied.
> Organization B sends a letter to members seeking donations and stating: "Those sending $50 will receive a box of greeting cards." The greeting cards are called a back-end premium. If the greeting cards are mailed at the Nonprofit Standard Mail rates, the product rules must be applied. (The initial solicitation letter is considered an advertisement (see steps 3 through 6).)
The product rules consider material produced by the authorized organization as well as material produced by third parties - for example, other persons or organizations (whether for-profit or nonprofit organizations).
A publication is considered a product if it is sold or has a listed price or represented value. The following examples can help you determine when printed matter is considered a product.
Example - Product rules apply
> Authorized organization B prints and distributes a quarterly publication. The publication is subsidized by membership dues, sold on newsstands, and printed with a cover price. The publication is considered a product because it is sold and has a cover price. The product rules (steps 1 and 2) must be applied.
Examples - Product rules do not apply
> Every 2 months, authorized organization C mails a four-page newsletter to its members. This newsletter is not sold either on newsstands or by application of part of membership dues, and it does not bear a listed price. The newsletter is not considered a product. The product rules (steps 1 and 2) do not apply.
> For fundraising, authorized organization D mails a catalog offering several items and includes information for ordering these items. The catalog itself is not sold and has no listed price. The catalog is not considered a product. The product rules (steps 1 and 2) do not apply.
Determine whether all products to be mailed meet one of the three statutory provisions listed in 6-3.2.2. Consider these two conditions and proceed as follows:
· If one or more of the products do not meet any statutory provisions, the mailpiece is ineligible for mailing at the Nonprofit Standard Mail rates.
· If all products meet at least one statutory provision, go to step 3.
For a product to be eligible for mailing at the Nonprofit Standard Mail rates, it must meet one of these three statutory provisions:
· A low-cost item (purchased or produced by the organization).
· A gift or donation (received by the authorized organization).
· A periodical publication meeting certain requirements.
Unlike advertisements for products and services, it is irrelevant whether the
product is substantially related to one or more of the authorized organization's
purposes. If the product meets one of these three statutory provisions, the
product must still be examined to determine whether it contains advertising and
whether the content-based restrictions for advertisements apply (steps 3
through 6).
Examples - Substantially related but not exempt
> Authorized church C buys copies of a Bible for $8 each and plans to mail the Bibles to church members. The Bible is substantially related to the purpose of the church. The Bible is ineligible for mailing at the Nonprofit Standard Mail rates because it does not meet the statutory product provision for low-cost items or the other two provisions for donated items or periodical publications.
> Authorized university U mails to former economics majors the latest textbook written by university U's Nobel Prize-winning economics professor. The textbook, which university U buys for $18 each and requires for an economics class taught at the university, is considered substantially related to university U's educational purposes. The book is ineligible for mailing at the Nonprofit Standard Mail rates because it does not meet the statutory product provision for low-cost items or either of the other provisions.
The determination of whether an item is considered a low-cost item - whether purchased or made by the organization - is based on the actual cost to the authorized organization or on whose behalf the product is distributed. The term low-cost item is defined in 26 U.S.C. 513(h)(2) of the Internal Revenue Code.
Effective January 1, 1996, low-cost items were items costing no more than $6.75. At the beginning of each calendar year, the value of low-cost items is adjusted for changes in the cost of living. This information is published in the Internal Revenue Service's Internal Revenue Bulletin.
Examples - Low-cost items
> Authorized organization A prepares a mailpiece that contains a paperback book bought for $3. The book is eligible for mailing at the Nonprofit Standard Mail rates - if it does not contain ineligible advertisements - because it meets the statutory product provision for low-cost items.
> Authorized labor organization L plans to mail a calendar bought for $2. The calendar, which does not bear ineligible advertisements, is not substantially related to the organization's qualifying purposes. The calendar is still eligible for mailing at the Nonprofit Standard Mail rates because it meets the statutory product provision for low-cost items.
> Authorized university U buys books for $8 each and plans to mail them to alumni. The book is substantially related to the university's educational purposes. The book is ineligible for mailing at the Nonprofit Standard Mail rates because it does not meet the statutory product provision for low-cost items.
> Authorized college C buys for $3 each canvas tote bags bearing the college logo. College C plans to mail the tote bags to its alumni, each of whom pays the college $10 for the bag. The tote bag meets the statutory product provision for low-cost items because the actual purchase price did not exceed $6.75. (The amount that an authorized organization pays for an item - not the amount at which the organization sells the item - determines whether an item is a low-cost item.)
> Authorized fraternal organization F buys materials to make notebooks. The notebooks cost organization F about $2 each, including labor, materials, and overhead expenses, making it a low-cost item. (If an authorized organization makes the product itself, the costs incurred by the organization determine whether the product is a low-cost item.) The notebook is eligible for the Nonprofit Standard Mail rates because it meets the statutory product provision for low-cost items.
> Authorized organization C sends a front-end premium - that is, a mailpiece that requests a donation and contains a box of greeting cards. The box of greeting cards costs the organization $3 each. The product is eligible for mailing at the Nonprofit Standard Mail rates because it meets the statutory product provision for low-cost items.
To qualify as a gift or donated item, the item must be obtained by the authorized organization at no cost. The actual cost to the donor is not considered. If the authorized organization, however, directly or indirectly compensates a third party, the item may not be considered a gift or donated item.
Example - Donated item
> Authorized organization C receives a donation of raincoats on July 1, 1996. The donor paid $7 for each raincoat. The raincoat is eligible for mailing at the Nonprofit Standard Mail rates because it meets the statutory product provision for donated items even though the donor paid more than $6.75.
Periodical publications may be considered products if they are sold or have a listed price or represented value. By law, a periodical publication of an authorized organization is eligible for mailing at the Nonprofit Standard Mail rates, provided that the publication does not contain an advertisement that is ineligible for mailing at these rates. To qualify as a periodical publication, the publication must meet these criteria:
· Have a title.
· Be published at regular intervals of at least four times a year.
· Be formed of printed sheets.
· Have an identification statement.
· Have a known office of publication.
· Meet the eligibility requirements prescribed for one of the Periodicals categories (for example, a general publication, a requester publication, or a publication of an institution or society).
· Be eligible for mailing as Standard Mail (A) matter.
A periodical may also qualify for mailing at the Nonprofit Standard Mail rates as a product if it is a low-cost item or a donated item. Because most periodicals are likely to be low-cost items, consider that statutory provision first before examining the publication for the periodical publication criteria.
Example - Low-cost publication
> Authorized organization Q produces a publication twice a year that is available to subscribers at an annual rate of $8. The publication contains no ineligible advertisements. The publication is considered a product because it is sold, but it does not meet the criteria for a periodical publication exemption because the publication is not published at least four times a year (see 6-3.2.5 for other requirements). Organization Q's cost of producing the publication, however, is only $1 a copy. The publication is eligible for mailing at the Nonprofit Standard Mail rates because it meets the statutory product provision for low-cost items.
Examine the mailpiece (including any product) to determine whether it contains any printed or other matter that can be considered advertising for a product or service. Consider these two conditions and proceed as follows:
· If the mailpiece contains no advertising, the content-based restrictions for advertisements do not apply and the mailpiece may be eligible for mailing at the Nonprofit Standard Mail rates.
· If the mailpiece contains advertising for a product or service, apply the appropriate test to determine whether the mailpiece qualifies for the Nonprofit Standard Mail rates. (A conclusion that a mailpiece contains advertising does not disqualify it from being mailed at the Nonprofit Standard Mail rates.) Go to step 4.
As used in this publication, the terms advertising and advertisement mean any thing that "advertises, promotes, offers, or, for a fee or consideration, recommends, describes, or announces the availability of any product or service," as defined in 39 U.S.C. 3626(j).
Under the law and regulations, the following material is considered advertising:
· All material for the publication of which a valuable consideration is paid, accepted, or promised that calls attention to something to get people to buy it, sell it, seek it, or support it.
· Reading matter or other material for the publication of which an advertising rate is charged.
· Articles, items, and notices in the form of reading matter inserted by custom or understanding that textual matter is to be inserted for the advertiser or the advertiser's products in the publication in which a display advertisement appears.
· A newspaper's or periodical's advertisement of its own services, issues, or any other business of the publisher, whether in display advertising or reading matter.
Example - Listing considered as advertising
> A church newsletter contains a page labeled "sponsors" that is limited to the names of businesses. Elsewhere on the page is the statement: "For ad information, call MNO at 111-1111." MNO, a for-profit company, enters into contracts with each "sponsor" labeled "Advertising Agreement." These listings are, therefore, considered advertising because there appears to be an understanding between the church, MNO, and the businesses that they are advertising.
> Authorized organization A mails a solicitation seeking new members. The letter includes descriptions of various membership benefits available. These benefits include eligibility for the organization's "no annual fee affinity credit card," and an opportunity to purchase "low-cost life insurance." This solicitation is considered advertising for the credit card and the insurance.
Examples - Nonadvertising
> Authorized organization O mails a letter soliciting donations. The letter does not contain advertisements for products or services. Because requests for donations are not considered advertisements, the content-based restrictions for advertisements do not apply.
> Authorized consumer organization XYZ mails a newsletter containing an article that discusses the merits and prices of insurance policies offered by companies O, P, Q, and R and lists telephone numbers at the companies for obtaining more information. Companies O, P, Q, and R do not pay organization XYZ or provide any other consideration for the newsletter article. Because companies O, P, Q, and R did not pay organization XYZ to publish the article, the article is not considered an advertisement.
> Authorized organization A's mailpiece contains a solicitation for donations, with prize entry information and a notice that a product or service need not be purchased to enter the drawing for the prize. Because the recipient can enter the drawing without buying a product or service, the solicitation is not considered an advertisement for the prize.
> Authorized organization E's mailpiece contains a solicitation for donations, sweepstakes entry information, and an announcement that the first 500 persons to return their sweepstakes entry form will receive a set of steak knives. The recipient may enter the sweepstakes regardless of whether he or she sends a donation. Because nothing is sold, the request for a donation is not considered an advertisement. Also, because the recipient is not required to make a donation to enter the sweepstakes, the announcement of the sweepstakes and the knife set is not considered an advertisement.
> If an authorized organization solicits donations and announces that a donation may be paid by a credit card, the mention of payment by that credit card is not considered an advertisement for the credit card unless a third party (for example, the firm issuing the credit card) gives the authorized organization valuable consideration to mention the card. The reference is not advertising for the authorized organization and no consideration has been paid for its publication.
An authorized organization may advertise its periodical publication if it meets certain statutory requirements (see 6-3.2), regardless of the products or services advertised in the periodical publication. The publication itself may be mailed at the Nonprofit Standard Mail rates if it complies with the product restrictions, if it is eligible for mailing as Standard Mail (A) matter, and if it complies with the rules for prohibited and restricted advertisements (if the publication contains advertising).
Under the law, the advertising restrictions have an extremely broad reach. The content-based restrictions for advertisements apply to written and other material that advertises (as defined in 6-3.3.2) any product or service. These restrictions include the authorized organization's advertising of its own products and services as well as third-party advertising (for example, advertising for products or services of other persons, companies, or organizations).
Examples - Advertising
> If an authorized educational organization advertises a seminar and states that the fee may be paid using the organization's affinity card, the announcement is considered an advertisement for the seminar and for the affinity card. Because the statement announces the availability and discusses potential uses of the organization's affinity card to get people to use it, the announcement must be considered an advertisement.
> For fundraising, authorized organization Y sends members a mailpiece that includes this message: "We are selling delicious ABC Candy for only $5 per box for members only. Please call Jane Jones at 111-1111 with your order." Because the message contains promotional material describing the candy as "delicious ... only $5," the message is considered an advertisement.
> Authorized organization R mails matter with this statement: "Members are entitled to receive an affinity card with an interest rate of 2 percent above the prime rate." Because the statement includes conditions about the card, the statement is considered an advertisement for the credit card.
> Authorized organization G includes in its membership packet this information: "Members who are 25 to 30 years old can buy a $20,000 life insurance policy for $20 a month." The information is considered an advertisement for insurance because it includes a price and conditions.
> Authorized organization X distributes information stating that it will host an educational seminar at a hotel (and includes the hotel's name, address, and room rates for those who may participate in the seminar). The information is considered advertising for the seminar because it is an attempt to get support for the seminar. The information is not considered an advertisement for the hotel unless the authorized organization receives consideration for publishing the information.
> Authorized organization X will host a meeting at a hotel and includes in the organization's mailpiece a brochure received from the hotel and for which the qualified organization is compensated by the hotel to distribute at the Nonprofit Standard Mail rates. The brochure is considered an advertisement for the hotel because the hotel paid to have the information distributed. In addition to the content-based restrictions for advertisements, the arrangement between the hotel and the authorized organization must be considered to determine whether the cooperative mailing rule applies (see chapter 5).
> Authorized church X mails an announcement of a bake sale to be held on the church's premises. All baked goods are prepared by members of the church and donated to the church. All income from the sale of the baked goods is added to the church's treasury. Because the announcement seeks support for the bake sale, the announcement is considered an advertisement.
> Authorized school S receives a donation of clocks. School S then decides to sell the clocks as a fundraiser and mails a notice containing information only about the clock fundraiser. Because the notice seeks support for the fundraiser, the notice is considered an advertisement.
> Authorized organization B's mailpiece contains this statement: "Stay at the Grand Hotel in Paris for $150 per night." The statement is considered an advertisement for the hotel. It is not an advertisement for a travel arrangement because there is no travel component in the offer.
Under the law and regulations, these materials are not considered advertising:
· References to membership benefits of an authorized nonprofit organization (see 6-3.3.7).
· Acknowledgments of organizations or individuals who make donations to the authorized organization (see 6-3.3.8).
· Public service announcements for which no consideration is received (see 6-3.3.9).
References to and a response card or other instructions for making inquiries about services or benefits available to members of the authorized organization is permitted, provided that advertising, promotional, or application material for such services or benefits is not included. (This standard is sometimes referred to as the "permissible reference" rule.)
A simple reference to a membership benefit of an organization is not considered advertising (for example, "Members receive an affinity card. Write for details"). The rules allow an authorized organization to reference membership benefits if the benefits are not advertised.
Examples - Permissible references
> Authorized organization X includes in its membership packet this statement: "An insurance plan is one of the many benefits offered to members. Write for insurance information." This simple reference to the availability of insurance as a benefit of membership in the organization is not considered advertising but merely a permissible reference to membership benefits.
> An authorized organization distributes a circular with the announcement: "Members are entitled to life insurance coverage, dental insurance coverage, and free tax preparation assistance. Call 111-1111 or write for more information." The announcement is not considered an advertisement for life insurance or dental insurance, but merely permissible references to membership benefits, and is not an advertisement for a tax service because nothing is sold, that is, the service is free.
Examples - Impermissible references
> An authorized organization distributes a circular with the announcement: "Members are entitled to low-cost life insurance coverage, competitive dental insurance coverage, and free tax preparation assistance. Call 111-1111 or write for more information." The circular contains impermissible advertising for the life insurance and the dental insurance. The circular is not limited to permissible references. The term "low-cost" and "competitive" are considered promotional. The reference to tax preparation service is not an advertisement for a tax service because nothing is sold.
A listing of sponsors, donors, or contributors is permissible and is a type of acknowledgment. Such a listing is not considered advertising if:
· The listing of each individual or organization appears on a page under a heading such as "sponsors," "contributors," "donors."
· The listing does not contain promotional material.
· The listing is not labeled as advertising in other parts of the mailpiece.
As a rule, a listing containing only the names of sponsors is not considered promotional, but the inclusion of additional information might be considered promotional, depending on its content. For example, if the listing includes such a line as "Acme Ice Cream Parlor, Our City's Favorite Ice Cream Parlor," the listing is considered an advertisement because the phrase "Our City's Favorite Ice Cream Parlor" is promotional. The phrase "Acme Ice Cream Parlor" is permissible if that parlor is the sponsor.
Public service announcements (PSAs) are commonly found in Nonprofit Standard Mail material, especially periodical publications. These announcements are not treated as advertising. PSAs are announcements for which no valuable consideration is received by the publisher; which do not include any matter related to the business interests of the publisher; and which promote programs, activities, or services of federal, state, or local governments or of nonprofit organizations, or matter generally regarded as in the public interest.
Examples - Public service announcements
> An authorized educational organization publishes this message in its mailpiece: "There will be a political forum in auditorium G for all citizens of county X. Come hear the candidates' points of view on topics that affect you." Because no valuable consideration was paid, the message is a public service announcement, not an advertisement.
> Authorized organization B's mailpiece contains this statement: "Be prepared for the unexpected. Authorized organization D sells an automobile survival kit for $15." Because organization B received no consideration for publishing the statement, the statement is considered a public service announcement, not an advertisement.
Determine whether the mailpiece contains any prohibited or restricted advertisements. Consider these three conditions and proceed as follows:
· If the mailpiece contains any prohibited advertisement (that is, for a credit, debit, or charge card or similar financial instrument or account), the mailpiece is ineligible for mailing at the Nonprofit Standard Mail rates.
· If the mailpiece contains any restricted advertisement (that is, for an insurance policy or travel arrangement), the mailpiece is ineligible for mailing at the Nonprofit Standard Mail rates unless the advertisement meets the conditions described in this section.
· If the mailpiece contains no prohibited or ineligible restricted advertisement but contains any other advertisements, go to step 5. If it contains no prohibited or ineligible restricted advertisements and no other advertisements, the content-based restrictions for advertisements do not apply, and if there are no other problems such as noncompliance with the cooperative mailing rule, the mailpiece is eligible for mailing at the Nonprofit Standard Mail rates.
Material that advertises, promotes, offers, or, for a fee or consideration, recommends, describes, or announces the availability of any insurance policy is ineligible for mailing at the Nonprofit Standard Mail rates unless these three conditions are met:
· The organization promoting the policy is authorized to mail at the Nonprofit Standard Mail rates at the office of mailing.
· The policy is designed for and primarily promoted to the members, donors, supporters, or beneficiaries of that organization.
· The coverage provided by the policy is not generally otherwise commercially available.
Example - Ineligible insurance advertisement
> Authorized organization A offers a whole life insurance policy to its members as a membership benefit and distributes a circular containing the policy's fees and amounts of coverage available for the policy. The policy is considered to be generally commercially available. The insurance advertisement is ineligible for mailing at the Nonprofit Standard Mail rates because the rules prohibit mailing advertisements for insurance policies that are generally commercially available.
Material that advertises, promotes, offers, or, for a fee or consideration, recommends, describes, or announces the availability of any travel arrangement is ineligible for mailing at the Nonprofit Standard Mail rates unless these three conditions are met:
· The organization promoting the arrangement is authorized to mail at the Nonprofit Standard Mail rates at the office of mailing.
· The arrangement is designed for and primarily promoted to the members, donors, supporters, or beneficiaries of that organization.
· The travel contributes substantially - aside from the cultivation of members, donors, or supporters or the acquisition of income or funds - to one or more of the purposes that constitute the basis for the organization's authorization to mail at the Nonprofit Standard Mail rates.
Determine whether the mailpiece meets the content requirements for a periodical publication (also referred to as the "space advertisement exception"). Consider these two conditions and proceed as follows:
· If the mailpiece meets the four content requirements for a periodical publication (discussed in 6-3.5.2), the content-based restrictions for advertisements do not apply. However, you must consider whether the publication contains prohibited or ineligible restricted advertisements as discussed in step 4.
· If the mailpiece does not meet the four content requirements for a periodical publication, go to step 6.
To meet the content requirements for a periodical publication, the mailpiece must:
· Have a title. The title must be printed on the front cover page in a style and size of type that clearly distinguish the title from other information on the front cover page.
· Be formed of printed sheets. (The publication may not be reproduced by stencil, mimeograph, or hectograph processes; however, reproduction by any other process is permitted.) Moreover, any style of type may be used.
· Contain an identification statement on one of the first five pages of the publication that includes these elements:
- Title.
- Issue date. The date may be omitted if it is on the front cover or cover page.
- Statement of frequency showing when issues are to be published (for example, daily; weekly; monthly; monthly except June; three times a year in June, August, and December; annually; irregularly).
- Name and address of the authorized organization, including street number, street name, and ZIP+4 or five-digit ZIP Code. The street number and street name are optional if there is no letter carrier service.
- Issue number. Every issue of each publication is numbered consecutively in a series that may not be broken by assigning numbers to issues omitted. The issue number may be printed on the front cover or cover page instead of in the identification statement.
- International Standard Serial Number (ISSN), if applicable.
- Subscription price, if applicable.
· Consist of at least 25 percent nonadvertising matter in each issue.
Example - Identification statement
| Publication's title and number: | CHURCH A WEEKLY BULLETIN (ISSN 1111111X) |
| Issue date: |
JULY 10, 1995 (may be omitted if on the front cover or cover page) |
| Statement of frequency: | PUBLISHED WEEKLY |
|
Authorized organization's name and address: |
CHURCH A 123 MAIN ST WASHINGTON DC 20013-1111 |
| Issue number: |
ISSUE NO. 30 (may be omitted if on the front cover or cover page) |
| Subscription price: | (If applicable) |
The test in this exception (meeting the content requirements for a periodical publication) is more liberal than the test required under:
· The product rules (see 6-3.2.2) for mailing periodical publications.
· The advertising rules (see 6-3.3.4) for advertising periodical publications.
That is, this exception requires that the mailpiece meet only the content requirements for a periodical publication rather than all requirements prescribed for a periodical publication.
For example, an organization's newsletter published three times a year does not meet the requirements for a periodical publication. However, if the newsletter meets the four requirements listed in 6-3.5.2 for "content requirements for a periodical publication," the advertised products and services in the newsletter do not have to be substantially related to the authorized organization's purposes.
Example - Eligible advertisements
> Because authorized labor union X publishes its newsletter three times a year, the newsletter does not meet the requirements for a periodical publication. However, because the newsletter meets all four content requirements for a periodical publication, the advertised products and services in the newsletter do not have to be substantially related to one or more of the authorized organization's purposes, and the advertising restrictions do not apply.
Determine the substantial relatedness of each advertised product or service. Consider these two conditions:
· If all the products or services advertised in the mailpiece are substantially related to one or more of the authorized organization's purposes, the advertisements are eligible for mailing at the Nonprofit Standard Mail rates.
· If any product or service advertised in the mailpiece is not substantially related to one or more of the authorized organization's purposes, the mailpiece is ineligible for mailing at the Nonprofit Standard Mail rates.
If the advertisement for the product or service is a part of material that does not meet the content requirements for a periodical publication (see step 5), advertised products and services must be substantially related to one or more of the purposes on which the organization's authorization to mail at the Nonprofit Standard Mail rates is based. However, if the advertisement for the product or service is part of material that meets the content requirements for a periodical publication, advertising restrictions for products and services (other than travel arrangements, insurance policies, and financial instruments) do not apply.
Examples - Not substantially related advertisements
> Authorized religious organization E's mailpiece contains an advertisement for a financial planner, a nail salon, and a hair salon. Unless organization E demonstrates that each of the advertised services is substantially related to its religious purposes, the mailpiece is ineligible for mailing at the Nonprofit Standard Mail rates. If the mailpiece meets the content requirements for a periodical publication, the advertisements can qualify under the space advertisement exception; that is, they need not be substantially related to the authorized organization's purpose(s).
> Nonprofit conservation organization J prints a catalog containing 94 items. Of those items, 93 are for items such as bird feeders, books, and specialized camping equipment and clothing that are substantially related to organization J's purposes. The 94th item is a key ring with organization J's name. The key ring is not substantially related to organization J's purposes. The catalog is ineligible for mailing at the Nonprofit Standard Mail rates because all advertisements are not substantially related.
Advertised products and services must be substantially related to the authorized organization's specific purposes. The qualifying purposes are those on which the organization's authorization to mail at the Nonprofit Standard Mail rates is based. Whether the seller is the authorized organization is insignificant.
> Note: An organization's authorization is based on its primary purpose. Not all purposes shown in the organizational documents may be considered as qualifying purposes.
Examples - Organization's purpose
> Labor organization X stresses safety on the job. Its membership includes welders and employees who use sandblasters. Labor organization X's mailpiece contains an advertisement for safety goggles. This advertisement is substantially related to labor organization X's purposes even though the goggles are sold by a for-profit corporation. The advertisement is eligible for mailing at the Nonprofit Standard Mail rates.
> Advertisements for reproductions of items in the museum's collection or in the collection of a similar museum, or educational materials (including pictures, posters, postcards) related to or discussing items in the museum, are considered substantially related to the authorized museum's qualifying purposes. Therefore, advertisements for those reproductions and materials are eligible for mailing at the Nonprofit Standard Mail rates.
> Scientific organization G specializes in physiology, and scientific organization H specializes in botany. A paid advertisement for human anatomy charts may be included in organization G's mailpiece because it is substantially related to organization G's purposes, but the same advertisement may not be included in organization H's mailpiece because it is not substantially related to organization H's purposes.
Examples - Advertisements for other organizations
> An authorized modern dance organization's mailpiece contains an advertisement for a different authorized modern dance organization. This advertisement is substantially related.
> An authorized jazz music organization's mailpiece contains a music audition advertisement for a different authorized jazz music organization. This advertisement is substantially related.
> A mailpiece from an authorized modern art organization contains an advertisement for a modern art gallery. This advertisement is substantially related.
> An authorized modern art organization's mailpiece contains an advertisement for a classical art gallery. This advertisement is not substantially related.
> An authorized symphony's mailpiece contains advertisements for a store selling flutes, a musical instrument repair shop, a classical radio station, and a classical record store. These advertisements are substantially related.
> An authorized performing arts organization's mailpiece contains an advertisement for a similar performing arts festival. This advertisement is substantially related.
> A mailpiece produced and printed by an authorized university press contains advertisements for materials published by other qualified university presses. These advertisements are substantially related.
> An authorized educational organization's mailpiece contains advertisements for scholarly journals on astronomy. The educational organization has a school of astronomy. These advertisements are substantially related.
> A mailpiece from an authorized thoracic organization contains advertisements for respiratory equipment, respiratory medications, oxygen concentrators, ventilators, portable oxygen systems, and respiratory inhalers. These advertisements are substantially related.
> An authorized diabetes organization's mailpiece contains advertisements for edible diabetic-safe products and podiatric aids for diabetic foot ulcers. These advertisements are substantially related.
> An authorized general health organization's mailpiece contains an advertisement for medical condition identification bracelets and necklaces. This advertisement is substantially related.
If the product or service advertised is primarily utilitarian, that utilitarian purpose must be considered. For example, an item such as a wine cup specifically used in religious services is substantially related to that religious organization's purpose, whereas a coffee mug depicting a religious scene but primarily used for everyday purposes is not substantially related.
Example - Product's purpose
> Advertisements for the sale of reproductions of items not found in any collection, or items not substantially related to the museum's purposes, or items whose utilitarian purpose dominates over their historical or cultural significance, and general merchandise are ineligible for mailing at the Nonprofit Standard Mail rates. For example, authorized modern art museum M's mailpiece contains an advertisement for No. 2 lead pencils. The pencils are not substantially related to the educational purposes of the art museum.
The sale of the product or the providing of the service must have a causal relationship to the achievement of one or more of the authorized organization's exempt purposes - other than through the production of income. The fact that income is produced from selling an advertised product or providing a service does not make such action a substantially related activity, even if the derived income will be used to accomplish one or more of the authorized organization's primary purposes.
If an advertised product or service is subject to payment of unrelated business income tax, then that product or service is not substantially related to the authorized organization's purposes regardless of whether unrelated business income tax is paid or whether the income and expenses for an advertised product or service will be reported on Internal Revenue Service Form 990-T, Exempt Organization Business Income Tax Return.
Because an organization is not liable for unrelated business income tax does not mean that an item is substantially related for the purposes of the Internal Revenue Service or the Postal Service (see appendix C). Even though a product or service is not substantially related, the authorized organization might not be liable for unrelated business income tax for other reasons.
Some advertising is considered substantially related to the organization's purposes, regardless of the specific nature of the product or service.
Advertisements for products and services, including products and services offered as prizes or premiums, "substantially all" received by a qualified organization as gifts or contributions are considered substantially related to the organization's purposes. This means that items received as donations may be advertised. Also, announcements of an organization's activities are considered substantially related if most of the work in conducting the activity is done without compensation by the organization's members or supporters.
Examples - Substantially related advertisements
> Authorized veterans' organization V receives a donation of pocket knives that the donor bought for $8 each. Organization V includes one of the knives in the mailpiece and an advertisement stating that the organization has additional pocket knives for sale at $10 each. Because the pocket knives were a donation, they are considered substantially related to the organization's purposes. The advertisement for the pocket knives is thus eligible for mailing at the Nonprofit Standard Mail rates. (The product rules must be used to determine whether the knife is eligible for mailing at the Nonprofit Standard Mail rates. In this case, the knives are eligible for mailing at the Nonprofit Standard Mail rates because they were donated.)
> Authorized organization A publishes a notice stating: "Each person who donates $20 will receive a book titled Child Rearing in the 1990s." Organization A receives the book as a donation. Because the book is a donation, it is considered substantially related to organization A's purposes. The notice is eligible for mailing at the Nonprofit Standard Mail rates.
> Authorized public radio station R is having a fundraiser. Radio station R's mailpiece contains a solicitation asking individuals to send at least X amount and that those responding will receive a tote bag bearing the logo of the for-profit company that will donate the bag. Although a tote bag does not appear to be related to radio station R's educational purposes, the bag is considered substantially related because it was donated to radio station R. The advertisement is eligible for mailing at the Nonprofit Standard Mail rates.
If an advertisement generally promotes an advertiser's business, the advertiser's full line of products and services must be considered under the substantially related test. If the advertisement does not promote all the advertiser's products or services but only specific products or services, only those products or services advertised are considered under the test.
Only the specific item advertised should be considered even if the organization also sells nonrelated items.
Examples - Specific advertised products and services
> Authorized art organization A, which has the teaching of art as one of its purposes, mails a piece containing a store's advertisement for only art supplies (paint, brushes, and canvas supplies). The advertisement is substantially related.
> Clothing store P sells a wide range of clothes for men and boys. It places an advertisement in a mailpiece mailed by the local Buddhist temple stating: "Clothing store P has a large stock of saffron robes starting at $50." This product is substantially related to the temple's purposes and qualifies because the saffron robe is required attire for Buddhist monks. (If the advertisement also promotes clothing store P's general business with a statement such as "Serving all your clothing needs since 1960," it does not qualify.)
> Supermarket S places an advertisement in a mailpiece of an authorized Jewish synagogue stating only: "A full line of Passover foods is sold in the store." The advertised foods are required for religious purposes. The advertisement is substantially related to the authorized organization's purposes.
> Authorized high school H's mailpiece contains a video store's advertisement that is limited to an educational video mathematics game. The advertisement is substantially related to the high school's educational purposes.
> Bookstore B places an advertisement in an authorized Methodist church's mailpiece. The advertisement is limited to Bibles even though the bookstore sells other products. The advertisement for Bibles is eligible for mailing at the Nonprofit Standard Mail rates because the Bible is substantially related to the purposes of the church.