Nonprofits Should Ignore Old Stigmas and Practice Better Business

November 14, 2013

Nonprofits Should Ignore Old Stigmas and Practice Better Business

Some old stigmas regarding the operations of nonprofits need to go if organizations want to stay successful as the country continues to climb out of the recession. Some of the unspoken and unwritten rules of nonprofit etiquette are unnecessary and hold the entire sector back.  

In a blog for Huffington Post, Social Velocity President Nell Edgington names five taboos that nonprofits need to get over to be successful:

  • Raising a surplus
  • Pay market rate salaries
  • Get board members involved in fundraising
  • Never question donors
  • Invest in fundraising

The first two bullet points are financial management strategies that for-profits would never frown upon. While it may seem unethical to run a surplus of money, dialing down fundraising just because arbitrary goals have been met is not wise. As Edgington explains in the article, nonprofits with operating reserves can invest in creating a more resilient organization and improve staff recruitment, among other things.

Hiring and maintaining top talent in the nonprofit sector is a frequent topic of discussion surrounding the woes of nonprofit organizations. While nonprofits want employees that are mission driven, paying talented employees what they are worth should not be a mark of shame. Eventually, even devoted workers will leave for more money.

When it comes to boards, donors and fundraising, nonprofits should again consider if age-old adages are worth adhering to. It's OK for nonprofits to let donors know what they need and why they need it. While donors may want assurance that investments in the organization go straight to the mission, board members and fundraising leaders should not be afraid to explain that to be successful, the organization needs staffing, office space, etc. It's also acceptable to ask board members (and all employees at a nonprofit) to help in fundraising. Asking for donations is a necessary part of the nonprofit model and everyone that believes in the mission should help facilitate successful fundraising efforts.

Investing in top talent, inside and out
Nonprofits should focus not only on how they can improve their organization with talent from the inside, but also consider the benefits of outside services. Financial advisers, unemployment insurance savings programs and other consulting measure can help nonprofits improve the delivery of their mission. 

Successful nonprofits that are well funded can continue to expand the scope of their services and increase their impact. When nonprofits are successful, the people they help and the causes they fight for are also better for it.

Content presented by First Nonprofit Companies, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.


Ready to chat?
Get in touch today to request a no-obligation savings evaluation.


CCSCT was approached by First NonProfit to discuss its Unemployment Savings Program and ways the program could significantly reduce the amount of unemployment taxes we were paying. At the time, our agency was paying approximately $80,000 per year. First NonProfit conducted an analysis to determine if making the switch would be in our best interest, and it clearly was based on our circumstances. The first year on the program, CCSCT saw a 70% reduction in its unemployment costs and each year, continues to experience further reductions as a result of having minimal claims. Some additional benefits of the program including having a fixed annual cost, an interest-baring reserve account, professional unemployment claims management and representation at all unemployment hearings. This has been one of the best decisions we have made.

Community Council of South Central Texas, Inc., Seguin, TX

We first started using First Nonprofit’s Unemployment Savings Program when we were a small startup nonprofit.  We didn’t have an HR department and needed expertise in the event that an unemployment claim was made.  We knew we were eligible to be a reimbursing employer, but weren’t sure how to navigate that process.  They made it easy to set things up, plan for, and then manage claims when they came at a very reasonable cost. The amount of time and stress they’ve saved us dealing with all this has been worth way more than the cost.  We’ve now grown to a large nonprofit and do have an HR department but have no plans to stop using their services.  I highly recommend them to every nonprofit I come into contact with!


Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools, Chicago, IL

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios.

Thresholds, Chicago, IL

NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

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.

Visually Impaired Preschool Services, Louisville, KY

Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!

Neurologic Music Therapy Services of Arizona, Phoenix, AZ