U.S. Postal Service:

Factors Affecting Fund-Raising Stamp Sales Suggest Lessons Learned

GAO-05-953: Published: Sep 30, 2005. Publicly Released: Sep 30, 2005.

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Congress has directed the U.S. Postal Service to issue three fund-raising stamps, also called semipostals, since 1998. These stamps are sold at a higher price than First-Class stamps, with the difference going to federal agencies for specific causes. The proceeds from the three stamps address breast cancer research, assistance to families of emergency personnel killed or permanently disabled in the terrorist attacks of September 11, and domestic violence. The law authorizing the Breast Cancer Research stamp directed GAO to report on the fund-raising results. To provide additional information to the Congress, GAO expanded the study to include all three semipostals. GAO's study addressed (1) the amounts raised and the factors affecting sales, (2) how the designated agencies used the proceeds and reported the results, and (3) lessons learned for the Postal Service, agencies receiving the proceeds, and others.

Over $56 million has been raised through semipostal sales as of June 2005, and sales were likely affected by several key factors. Individually, proceeds totaled $44 million for the Breast Cancer Research stamp, over $10.5 million for the Heroes of 2001 stamp, and nearly $2 million for the Stop Family Violence stamp. Sales patterns and levels differed greatly, with four key factors affecting sales patterns: (1) fund-raising cause, (2) support of advocacy groups, (3) stamp design, and (4) promotion by the Postal Service. The designated federal agencies currently award or plan to award grants with the proceeds; none of the agencies has reported specifically on results. Breast Cancer Research stamp proceeds have been used to award research grants by the National Institutes of Health and the Department of Defense. No grants have yet been awarded with the proceeds from the two other semipostals. The Federal Emergency Management Agency plans to distribute Heroes of 2001 stamp proceeds through grants to families of emergency personnel killed or permanently disabled from the September 11 attacks, while the Department of Health and Human Services plans to use Stop Family Violence stamp proceeds for grants to organizations for projects aimed at enhancing services to children exposed to domestic violence. Key lessons that have emerged from the three semipostals: (1) the nature of the charitable cause can greatly affect sales patterns and other results. A disaster, for example, is more likely to have a brief but intense response, while an ongoing health issue will have a longer one; (2) early and continued involvement of advocacy groups helps sustain semipostal support; (3) stamp design, promotion, and clear understanding about how proceeds will be used can greatly affect consumers' response; (4) semipostals generate proceeds immediately, but the logistics of using the moneys raised takes much longer, and (5) reporting can enhance accountability. Congress included a reporting requirement in the Semipostal Authorization Act of 2000, but these three semipostals are not subject to that requirement.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In June 2007, DOD told us that it has included information on the Breast Cancer Research Semipostal (BCRS) in Appendix C of DOD's 2006 Annual Report of the Congressionally Directed Medical Research Programs. Appendix C includes information on the amount of proceeds transferred to DOD's Breast Cancer Research Program, how those proceeds were used, and the research and management cost allocation of funds DOD received. In addition, DOD is currently preparing a soon-to-be-released

    Recommendation: To enhance accountability for semipostal proceeds, the Secretary of Defense, Secretary of Homeland Security, and Secretary of Health and Human Services should annually issue reports to the congressional committees with jurisdiction over the Service, as is currently required for agencies that are to receive semipostal proceeds under the Semipostal Authorization Act. Reports should include information on the amount of funding received, accounting for how the funds were allocated or otherwise used, and any significant advances or accomplishments that were funded, in whole or in part, out of the funds received through the semipostal program.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In August 2007, HHS/ACF told us that its report to Congress, "Family Violence Semipostal Stamp: Enhancing Services for Children and Youth Who Are Exposed to Domestic Violence", was issued to the Committee on Oversight and Government Reform in the House of Representatives and the Committee on Homeland Security and Governmental Affairs in the Senate. It included information on the programs funded with proceeds from the Stop Family Violence semipostal and HHS/ACF's expectations of the programs funded. In June 2007, HHS/NIH told us that currently it has no plans to prepare a report to the Congress on the Breast Cancer Research Semipostal.

    Recommendation: To enhance accountability for semipostal proceeds, the Secretary of Defense, Secretary of Homeland Security, and Secretary of Health and Human Services should annually issue reports to the congressional committees with jurisdiction over the Service, as is currently required for agencies that are to receive semipostal proceeds under the Semipostal Authorization Act. Reports should include information on the amount of funding received, accounting for how the funds were allocated or otherwise used, and any significant advances or accomplishments that were funded, in whole or in part, out of the funds received through the semipostal program.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: In 2005, GAO reported that a key lesson learned from the existing semipostals was that a reporting approach can enhance accountability. The Federal Emergency Management Agency (FEMA), within the Department of Homeland Security (DHS), is not required to report to Congress on the use of proceeds from the Heroes Semipostal, as is now required for semipostal issued under the Semipostal Authorization Act. The fund-raising organizations that GAO spoke with were unclear as to how semipostal proceeds were being used or would be used and none of these organizations knew of any outcomes resulting from these proceeds. These organizations said that program reporting is an important standard for ensuring accountability of charitable proceeds. GAO recommended that DHS issue a report to the congressional committees with jurisdiction over the Postal Service that includes information on the amount of funding received, accounting for how the funds were allocated or otherwise used, and describes any significant advances of accomplishments that received proceeds from the Heroes semipostal. In December 2011, FEMA reported on its use of the Heroes proceeds in a report to the Postal oversight committees of both the House and Senate. As a result, there is greater accountability and transparency regarding FEMA's use of the proceeds from the Heroes semipostal.

    Recommendation: To enhance accountability for semipostal proceeds, the Secretary of Defense, Secretary of Homeland Security, and Secretary of Health and Human Services should annually issue reports to the congressional committees with jurisdiction over the Service, as is currently required for agencies that are to receive semipostal proceeds under the Semipostal Authorization Act. Reports should include information on the amount of funding received, accounting for how the funds were allocated or otherwise used, and any significant advances or accomplishments that were funded, in whole or in part, out of the funds received through the semipostal program.

    Agency Affected: Department of Homeland Security

 

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