March 24, 2014
In mid-March, claims for first-time unemployment benefits rose by 5,000 to 320,000, according to Bloomberg. While these numbers rise and fall week to week, their fluctuation suggests the economy is still on its long road to recovery, and unemployment remains an important issue for organizations across the country.
Meeting the financial demand of unemployment benefits has proved difficult for many states that exhausted their funding pools following the Great Recession. States which borrowed from the federal government to meet an increase in unemployment claims are now struggling to pay down the debt. Employers in many states could see a reduction in federal tax credits, leading to higher unemployment insurance costs.
Options for nonprofits
Nonprofits do not pay federal UI tax, however, they are responsible for the state portion. State UI costs could also rise as governments attempt to rebuild funding levels in the state pools. Nonprofits are extended the benefit of opting out of state tax pools and becoming reimbursing employers, which can offer extensive savings. Opting out, nonprofits can avoid annually varying tax rates and reduce the actual cost of benefits to a dollar-for-dollar amount.
However, if unemployment suddenly spikes, nonprofits could see increased costs if they have not taken advantage of alternative financing programs. Alternative methods that offer nonprofits membership in a limited liability corporation or bonded service program provide organizations with the largest cost savings and the least amount of risk.
Nonprofits should also look for unemployment financing solutions that provide access to experienced administrators that understand complex state UI laws. These experts can conduct audits and help nonprofits avoid unnecessary risk and overpaying claims. The safest group programs should also limit the total risk, and do not increase the cost for one member organization for the increased claims of another.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Group at FNCUI@firstnonprofit.com or visit www.firstnonprofitcompanies.com.
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First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.
First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.
Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.
FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!
Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.
FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.
When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.
First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!