Failure to adhere to Not-for-Profit Postage Rules will not result in your synagogue's losing its tax-exempt status. However, it will require you to pay ordinary postage rates rather than realize the significant savings in postage available by using the Nonprofit Standard Mail rate. This rate is available to synagogues that have received authorization and whose individual mailings meet the additional eligibility rules that apply to the Nonprofit Standard Mail rate. These Not-for-Profit Postage Rules are somewhat onerous and are not easily met. They can be revoked if certain categories of advertisements are used in a mailing.
An authorization to mail at the Nonprofit Standard Mail rate is a privilege that is reserved by law for authorized organizations. Civil and criminal penalties apply to false, fictitious, or fraudulent statements made in connection with the improper use of this rate. Authorized organizations must follow a strict set of guidelines issued by the United States Postal Service. The postal regulations are spelled out in Publication 417, titled Nonprofit Standard Mail Eligibility, which is available from the United States Postal Service on the web at www.pe.usps.gov. Because the interpretation and application of these regulations vary, you should work with your local postmaster to insure appropriate compliance.
Listed below are some guidelines from the regulations that will assist you in initiating your inquiry. In order for your synagogue to qualify for the Nonprofit Standard Mail rate, your bulletin must meet the requirements for a periodical publication. These include:
Printing some specific administrative data in the bulletin, such as including a masthead with the name and address of the publisher, the date and number of the issue, and the frequency of publication
Devoting no more than twenty-five percent of the total pages to advertising
Including no ads for travel agencies, travel-related ventures, or insurance of any kind
The Postal Service requirements must be consistent with Internal Revenue Service rules in determining whether advertisements for products and services are substantially related to the authorized organization's purposes. If the advertisements are deemed not to be, they can subject the synagogue to an unrelated business income tax, discussed below.
According to Postal Regulation 417 section C-2.2, when the unrelated business income tax was extended to churches and synagogues, it was expected that unrelated business taxable income would not be triggered by the "printing, distribution, and sale of religious pamphlets, tracts, calendars, papers, books, and magazines that have a substantial religious content (even though the document might contain a small amount of advertising), as long as these activities are carried on in connection with the church."
Acknowledgments of organizations and individuals who have contributed to the bulletin are generally not treated as advertising. Material is considered an acknowledgment rather than advertising if it appears on a page under a heading such as "Sponsors," "Contributors," or "Donors." In addition, such listings should not be labeled as advertising on rate cards or in other parts of the publication.