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Postal Explorer > Publication 417 - Nonprofit Standard Mail Eligibility > Appendix A Case Studies: Content-Based Restrictions
Appendix A
Case Studies: Content-Based Restrictions
An authorized medical educational association, "MEA," concentrates on
diseases of the heart and circulatory system. MEA publishes a journal three
times a year and circulates the journal to its members. According to the
MEA's dues statement, $10 of the annual dues pays for the subscription to
the journal. Additionally, 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 a year.
The primary contents of the journal include academic articles by researchers
and physicians concerning developments in the heart and circulation system,
as well as research and treatment of related diseases. The journal consists of
about 25 percent advertisements, including advertisements by MEA for books
that it produces, advertisements by other nonprofit organizations for their
publications, advertisements by for-profit medical supply companies for
pharmaceutical products, medical supplies and equipment, and a few
advertisements for luxury automobiles.
MEA wants to mail the journal at the Nonprofit Standard Mail (nonprofit)
rates.
The analysis by each step follows:
• Step 1 asks whether the mailing is a product or contains products.
Answer: The publication itself is a product because it has a price and
is sold to readers.
• Step 2 asks whether the product to be mailed meets one of the three
statutory product provisions.
Answer: The publication was not donated to MEA, but, taking all
expenses into account, MEA determines that its cost for each copy of
the publication is $1.25. Therefore, the publication is a low-cost item.
Alternative answer: If the MEA journal 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, be circulated to a legitimate list of
subscribers or requesters, and meet other requirements applicable to a
specific Periodicals qualification category. Because MEA's journal is
issued only three times a year, it does not meet these requirements.
• Step 3 asks whether there are advertisements.
Answer: There are advertisements, which were described in the
statement of the facts - i.e., for MEA books, for publications of other
nonprofit organizations, for the products of for-profit medical supply
companies, and advertisements for luxury automobiles.
• Step 4 asks whether there are prohibited or restricted advertisements.
Answer: There are no prohibited or restricted advertisements for
financial instruments, travel arrangements, or insurance. Thus, the
specific restrictions for these types of advertisements do not apply.
• Step 5 asks whether the advertisements are in material meeting the
content requirements for a periodical publication.
Answer: 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 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.
Answer: 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. Unless the mailing is ineligible
for the nonprofit rates for other reasons, mailings generally will be
accepted at the nonprofit rates upon the mailer's certification that the
income derived from the sale of products or services advertised in the
mailing is not subject to the Unrelated Business Income Tax (UBIT)
described at 26 U.S.C. section 512, and that each of the products or
services is substantially related to the nonprofit organization's qualifying
purpose.
This publication is eligible for mailing at the nonprofit rates.
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