November 7, 2013
Incubators and accelerators are finally making their way to the nonprofit sector, helping young organizations get off the ground. The programs provide free office space and access to professional resources for technology and legal issues.
Two recent nonprofit accelerators are Beespace and Blue Ridge Foundation. BRF also provides services for mission-driven for-profits, but Beespace will focus entirely on the nonprofit industry. Beespace's creator, photographer and consultant Marissa Slacker, will also cap residency in the program at two years. This will make room for new startups and encourage more successful ones to grow and move on.
Nonprofits need more than just a free space
Any startup comes with risks, but for nonprofits, jumping in too quickly can mean disaster. According to Grant Space, nonprofits need to determine if the services they intend to offer are already provided by another organization or if they're needed in their community. Nonprofit entrepreneurs also need to confirm very early on if their idea truly qualifies as a 501(c)(3).
Free office space and access to professional help is a great benefit to nonprofits as long they realize they will need to move on. If the idea proves to be a success, organizations must prepare for increased needs related to staffing, HR, fundraising and space to operate. Young organizations must control their growth so that their mission doesn't suffer. Once under control, nonprofit leaders need to ensure their model is sustainable.
Nonprofits should seek outside consulting after the startup phase
As an organization leaves the startup stage and takes on more employees it must consider the growing expense of unemployment insurance, fraud protection and financial management.
Even if a nonprofit maintains its staffing levels as it continues to grow, their costs associated with state UI tax pools will continue to increase for each new employee. Even if no benefit claims are paid out, organizations will still incur a cost. Nonprofits should consider opting out of state UI tax pools and joining an unemployment insurance savings program. Programs that offer organizations membership in a limited liability corporation provide an opportunity to lower UI costs as a self-reimbursing employer with less risk than group trusts.
As an organization grows it will also be faced with the realization that many of the rules and regulations regarding nonprofits are complex. From UI laws to HR management and financial consultants, leaders should consider enlisting the help of professionals to keep their growing organization on the right track.
Content presented by First Nonprofit Group, a leading provider of financial consulting services for 501(c)(3) nonprofit employers.
Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.
The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.
In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.
We have had a great experience with FNP. During Covid, when there was the chance that reimbursable nonprofits would have to pay 50% of the unemployment costs, FNP went to bat for us. We would receive weekly information on the Unemployment claim and how they were working to reduce the costs to reimbursable nonprofits. They have a great service also working with [our claims administrator] to make sure all the paperwork is completed correctly for any unemployment claim.
PORT Health Services has had a great experience with the Unemployment Savings Program offered through First Nonprofit. Throughout the years we have been involved in the program, we have increased our reserve account significantly through this program and find the reporting we receive both timely and useful. We look forward to our continued involvement with this program and our connection with First Nonprofit for many years to come.
Job One was spending a lot of money on unemployment. Our insurance broker, Mark Simcosky, recommended that we switch over to First Nonprofit. We did just that! This switch has been a huge savings for us! This switch saved us over $10,000 in the first year. Their customer service is Superior! Any time we have a question, we get a response very quickly. Any time we send them a report and they have a question; they call rather than just assuming. They were very responsive during COVID, even when they were in crisis mode their selves. They also were always there when we needed during COVID and very helpful! We would 1,000% recommend First Nonprofit to anybody that could benefit from it!
My experience with FNP has always been positive. Every time I have had to contact them, I’m always put in contact with a friendly and knowledgeable person. If something is missing from our account, they reach out to us to request it. It’s nice to work with a company that makes sure our account is current. I would recommend them to any nonprofit looking to reduce their unemployment insurance costs.
We’ve saved tens of thousands of dollars PER YEAR by changing to become a reimbursing employer, freeing funds for much needed capital investment. FNP has been a valued partner in this process, providing assurance that we have stopgap coverage for extraordinary claims and keeping claims response painless and simple. It’s a huge Win/Win!