Postal Increase to Cost Nonprofit Sector $40 Million Over Next 12 Months

SAN DIEGO, CA – July 1, 2002 – The June 30th postal rate hike of 7.9% for First-Class and 7.5% for nonprofit Standard Mail is expected to cost nonprofit organizations $40 million over the next 12 months in additional direct mail expenses, according to a cost analysis study by online solutions provider Kintera, Inc. The study indicates that this increase could further erode nonprofits' return on investment (ROI) for traditional direct mail efforts.

The Direct Marketing Association (DMA) reports that nonprofit organizations spent nearly $3.9 billion in direct mail costs in 2001. Kintera estimates nonprofits spent $500 million in postage alone in 2001.

Dr. Harry Gruber, founder and CEO of Kintera, an Internet marketing services provider to nonprofits that include the American Heart Association, Easter Seals and Big Brothers Big Sisters of America, notes, "For nonprofits, postal rate increases will significantly cut into their ROI for direct mail marketing. As a result, savvy organizations will accelerate their use of direct marketing such as email campaigns and eNewsletters as a complement to traditional direct mail methods to better segment and bond with supporters. By melding traditional offline marketing efforts with online methods for their most important processes – donor acquisition, retention and stewardship – nonprofits will be more successful."

According to Dr. Gruber, with Internet-based direct mail, nonprofits acquire real-time data with regard to donations, participation and online campaigns. By collecting this comprehensive data, organizations can use modern statistical and control methods to better interact with their donor base to maximize desired results.

"The Internet is not going to replace direct mail and can actually increase its use, but direct mail now needs the data and immediacy the Internet offers to be more effective," adds Dr. Gruber.    

About Kintera, Inc.
Kintera is the leading Internet marketing services provider offering nonprofit organizations advanced web-based solutions to help raise awareness and funds. Kintera's services, highlighted by its proprietary "Friends Asking Friends™" technology, leverage the power of the Internet to enrich user experiences when interacting with nonprofit organizations. The company's end-to-end Internet solutions meld with traditional fundraising to enhance donor acquisition, retention and stewardship programs. For more information, visit the Kintera web site at www.kintera.com or call 858.795.3000. Kintera's headquarters are located in San Diego, California.

This release contains information about future expectations, plans and prospects of Kintera, Inc. and constitutes forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.





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