Mark it cancelled: Recraft postal bill for good of all. (General Ramblings).

There is one point upon which all fundraising mailers -- nonprofit and for-profit -- can agree. The cooperative mailing rules need to be clarified and in some cases reversed.

All it takes to cost nonprofits millions of dollars is one overly aggressive, misinformed postal official who doesn't completely understand the guidelines. But then, who does understand all of the rules and nuances?

The mailing community can not, however, agree on changes that would protect nonprofits and the cherished postal discounts coveted by for-profit mailers. This is a fight that has left few in the arena without mud on their clothing. There has been name-calling, finger-pointing, back-stabbing, character assassinations and witch hunts all in the name of preferred postal rates. The rancor has gotten to a level loud enough for members of Congress to hear. And, that could damage the chance at real reform.

The basic fight centered on H.R. 1169, now dead but which probably will be resurrected this month. It is what's commonly referred to as the cooperative mailing legislation. The bill would have allowed a more liberal use of the nonprofit preferred postage rates by for-profit fundraisers who handle the mailings for charities.

A centerpiece of the legislation would have allowed the so-called no-risk contracts, where a for-profit entity handles a mailing for a charity but if negotiated in the contract, may keep ownership, in whole or in part, of the list of donor names.

It would also allow the for-profit to control the cash flow, taking expenses off the top while getting give-backs from favored printers and other vendors -- before the charities saw a dime.

There is also the issue of some of these contracts bestowing a non-voting seat at board meetings. Whether the position is called "board member" or simply "member," the for-profits are in a position to steer and perhaps control the conversation and subsequent awarding of contracts.

What makes this relationship more difficult is when the charity pays those individuals tens and sometimes hundreds of thousands of dollars in service fees for fundraising. Such relationships may later this year put the charity afoul of two federal entities, the U.S. Postal Service and the Internal Revenue Service. The IRS's Intermediate Sanctions final regulations are expected at any minute (IRS-time) and these deals probably won't pass the arm's-length test that will be applied.

While some nonprofits disclose the relationship on their Forms 990, that may not be enough for the IRS, according to one former IRS official knowledgeable about the topic.

The fight is pitting two of the top trade associations against each other. The Association Of Direct Response Fundraising Council took the correct stand in opposing the legislation and seeking to find a middle ground between that which would curtail postal service excesses without ending scrutiny for fundraiser excesses.

Some of the The DMA Nonprofit Federation leaders, several of whom are entrenched in these relationships, supported the bill, despite others on the DMA's advisory council opposing the legislation. And, those in opposition were admonished in an email message for speaking publically about the discussions.

The bottom line is this. There are good guys and, there are pirates. It is up to the board members at nonprofits to decide with which group they want to be associated.

There are some very honorable for-profit fundraising consultants who would not enter into such agreements but remain on the hook for millions of dollars because of the misguided postal rules. The rules need clarification -- perhaps retroactively -- for these vendors and their charity clients.

And, there are for-profit consultants using the privilege of the preferred rates to line their own pockets. They push the bounds of the guidelines and then scream foul when they get smacked. There is a reason some of these guys have been sued by their own clients. Sure, anyone can sue at any time for any reason. But when you see firms with more than a dozen suits, you have to ask some questions.

There is a valid problem that needs to be addressed. Nonprofits need to have more flexibility to craft business relationships with professional fundraisers and lettershops. But, H.R. 1169 was not the right vehicle.

Either compromise legislation or new United States Postal Service rulemaking could grant that competitive flexibility, without the commercial vendor ending up owning the names of people who thought that they were giving to charity. The rules could also mandate that checks be sent to a mailbox controlled by the nonprofit, not the vendor, and that money goes from the charity to the vendor, not the other way around.

There is room to make this work for everyone.