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After the shock: how to plan for success in spite of Canada Post

publication date: Dec 30, 2013
 | 
author/source: Leah Eustace
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Canada Post’s recent announcement that it’s planning to phase out door-to-door delivery and increase the cost of a stamp exponentially surprised everyone. There seems to have been little (if any) consultation with the charitable sector, and even letter carriers only heard the news when it was announced to the media.Leah Eustace photo

I think it’s safe to say that nobody saw this coming.

Now that the initial shock and surprise has started to fade, it’s time to think about the impact on Canada’s charitable sector. This month, I share some tips on how charities can cope with (and overcome) these changes.

Let’s start by looking at a few research findings. Two years ago, the AFP Foundation for Philanthropy – Canada, working with Ipsos Reid, surveyed Canadians about their charitable giving. Almost half (45%) prefer receiving a letter in the mail (the next highest preferred fundraising approach was an email at 17%). Clearly, direct mail is still a critical part of philanthropy in Canada.

Elimination of door-to-door service

Only one-third of Canadian households have their mail delivered to their door, and this is primarily in urban areas. In other words, the vast majority of us are already picking up our mail from community mailboxes.

How will this impact the charitable sector? We already know that it’s increasingly difficult to get recipients to open a piece of direct mail. If recipients pick up their mail down the road, and pick up more of it at a time because they are only visiting the mailbox a few times a week, will they be even more likely to send direct mail straight to the blue box? It’s possible, and time will tell.

An added concern, particularly for organizations focused on crises and emergencies, is urgency. The sooner those organizations are able to get donations, the sooner those donations will hit the ground in the affected areas. If mail recipients are picking their mail up less frequently, it could, theoretically, mean a delay in emergency response.

However, I think both of these concerns can be eliminated by ensuring we’re adhering to best practices: make sure your mailings are high touch, highly personal, donor-centred and have an appropriate (and compelling) call to action. You should be doing that anyway, but it will become even more critical as we move to community mailboxes.

The fact that emergency donations (by mail) might be slightly delayed should encourage organizations to have an emergency preparedness fund that they can draw on during those critical first 48 hours.

Finally, the move toward community mailboxes is happening over five years. That’s plenty of time to whip your website and e-communications into shape. It also gives you plenty of time to do a whole lot of testing to see what works best for you in the area of direct mail.

Overall, I feel that the elimination of door-to-door delivery will only have an impact on organizations that aren’t operating as efficiently and effectively as they should.

Increase in postal rates

The massive increase in the cost of sending letter mail, on the other hand, will have a much bigger impact on charities in Canada.

It’s true that a lot of direct mail is sent using admail rates (in other words, by third-class mail) and these rates are not going up. Canada Post likely has a very good idea of how important admail is to its business. There would have been absolute outrage (much more than we’ve seen) if those rates had been significantly increased.

But charities are very reliant on letter mail as well. For example, tax receipts in Canada must be sent out using first-class postage. As well, any mailing that is highly personalized (like a thank-you note or event invitation) is not sent out in bulk and is, therefore, not eligible for admail rates.

If charities are organized, they will buy their first class stamps in bulk, therefore seeing ‘only’ a 35% increase in the cost of a stamp (from $0.63 to $0.85). Stamps bought individually will increase by almost 60% (from $0.63 to $1.00).

For charities that use a postage meter, the price of postage will go up only 20% (from $0.63 to $0.75), but those big red indicia are pretty unappealing.

But even the charities that employ best practices and are highly donor focused will still need to buy a heck of a lot of first-class stamps. So a charity that has a postage budget of, say, $2,000, will need to budget at least $2700 come March 1st. In an era of super-scrutiny of how we spend donated dollars, that’s a pretty significant increase to our operating costs.

So, how should charities cope? One thing they absolutely shouldn’t do is decrease the number of thank-you letters, invitations, donor reports and other high-touch communications with donors. What you can do, however, is start looking into sending tax receipts out by email (if you aren’t doing so already). The postage freed up by sending e-receipts could then be invested into the other donor communications noted above.

An added benefit of setting up e-receipting is that it will allow you to gather donor email addresses, which you can then (with appropriate permission, of course) use in your online solicitation and stewardship program.

Special rate for charity mail?

The best scenario would be for Canada Post to exempt registered charities from the rate increase. (In the United States, charities have a special rate, but the same isn’t true of Canada.) Behind the scenes, people are already advocating for exactly that. I encourage everyone to keep an eye open for requests for help in this effort over the coming months.

Leah Eustace is principal and managing partner with Good Works. A “fundraiser’s fundraiser” with a wide background in charitable fund development, she’s worked with clients including the Canadian Red Cross, the Canadian Breast Cancer Foundation, CARE Canada and the UN Refugee Agency Canada on social media, direct marketing, donor research and legacy marketing.

She’s Past President of the Ottawa Chapter of AFP, President-Elect of the AFP Foundation for Philanthropy-Canada, and a member of AHP, NTEN, the CMA and CAGP.

Contact her by email; follow @LeahEustace



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