January 16, 2014
Nonprofits in North Carolina are growing concerned about a sales tax expansion that could eat into the revenue of ticket sales for museums, sports games and cultural events. Many of the organizations rely on the income from ticket sales for financial support, so a 7 percent bite could be costly.
"If you were giving $100 worth of tickets for a $100 contribution, then you've got to pay the tax on that or whatever amount that may be," Thalian Hall Center for the Performing Arts Executive Director Tony Rivenbark told North Carolina's NPR affiliate. "You know, we have people that give a $5,000 gift or a $10,000 annual gift, then they may get several hundred dollars worth of tickets for that. But we're going to have to pay 7 percent on that several hundred dollars worth of tickets."
Rivenbark said that he was also concerned about the indirect costs of the tax increase, such as additional bookkeeping.
Nonprofits often struggle with state taxes
Nonprofits may also find themselves taking a hit from state unemployment tax pools. While nonprofits are exempt from federal taxes related to unemployment, they are still responsible for meeting the state obligation. States make the actual payments to unemployed individuals but not all businesses are able to cover their own costs. The pooled contributions mean that even nonprofits with no unemployment turnover still pay into the state system.
While for-profit businesses have no other options than to pay the tax, nonprofits can opt out of state UI pools and become self-reimbursing employers. Under this designation, nonprofits are responsible only for the actual amount of money paid out in claims to former employees. A nonprofit with no claims would have no costs.
However, opting out of the state program can leave nonprofits open to unexpected costs if they suddenly experience a large turnover. To avoid this situation, organizations should take advantage of other options such as a UI savings programs. Saving programs through an experienced provider allow nonprofits the cost savings of opting out with less risk. Once members of the program, organizations have access to claim protection if unemployment spikes.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Companies at FNCUI@firstnonprofit.com or visit www.firstnonprofitcompanies.com.
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.
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.
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.
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.
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.
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!
First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.
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.