Nonprofit sector recovering from recession

March 17, 2014

Nonprofit sector recovering from recession

The time could be perfect for many nonprofits to re-evaluate their obligation to state UI tax pools. Nonprofit HR has announced a recent survey that suggests organizations are recovering from The Great Recession. The survey found 45 percent of nonprofits increased staff in 2013, compared to just more than 19 percent in 2009, at the height of the recession.

In 2014, more than 20 percent of nonprofits intend to increase hiring and only 7 percent plan to eliminate positions. Because unemployment at these organizations will remain low, it is a good time for leaders to consider making their nonprofit a self-reimbursing employer.

Cost savings with less risk
As a self-reimbursing employer, an organization can opt out of paying into state UI tax pools and pay the state only for the amount of UI costs actually associated with claims paid out to former employees. The only downside is that when unemployment spikes at an organization, there is no pool to help pay the costs. This can lead to a large amount of unfunded liabilities and force a nonprofit to reduce programs.

However, nonprofits can get the cost benefits of self-reimbursement without the risk by gaining membership in a nonprofit savings program. These alternative measures for meeting UI obligations allow nonprofits to protect their assets by building up funding in an account that they own. It can be used to pay for increases in unemployment and is returned to the nonprofit if they ever leave the program.

Organizations also gain access to experts in the UI industry that have a unique understanding of the specific challenges faced by the nonprofits they serve. UI insurance programs for nonprofits are the best way to save money but also remain prepared should another recession suddenly hit.

For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Companies at or visit


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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