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4. Petitioner’s mailing fees under the Contract--$0.05 per
prospect letter and $.10 per housefile letter--were within, but
about the high end of the range of charges in what Herge
described as a representative group of fundraising contracts.
Petitioner was charged package fees for housefile mailings under
the Contract. In Herge’s group of contracts, package fees were
ordinarily found only in conjunction with lower mailing fees; in
only one instance in this group (The Viguerie Co.’s contract with
The Solidarity Endowment) was there both a package fee and a high
mailing fee. As Tigner points out, it is difficult to evaluate
the reasonableness of a particular mailing fee unless one
understands the volume of mailings that are anticipated. In
general, the greater the volume of mailings anticipated, the
smaller the mailing fees. This relationship was clearly
recognized in five of the fundraising contracts in Herge’s group
of contracts, involving four different fundraisers, which
provided graduated mailing fees, depending on the volume of
mailings actually sent. Thus, when the parties to a fundraising
contract do not have a basis for confidently estimating the
volume of mailings to be sent, a graduated mailing fee schedule
is a device that may be used to protect both sides. In April
1986 petitioner and W&H agreed to a cap on housefile mailing fees
in exchange for a reduction, from 70 to 50 percent, in the
cumulative net income from housefile mailings that petitioner was
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