April 28, 2014
One of the greatest challenges for nonprofit organizations is cash flow. The need for services is unpredictable, as are the level of funding and the size of donations an organization receives. Ensuring that there is enough money to both pay bills and provide for the community requires meticulous financial management.
The ability to budget and manage cash flow is one of the most impressive feats accomplished by nonprofits since the recession. Since the economic downturn, grants from government organizations have dropped, as did funding from private donors. At the same time, demand remained high for nonprofits to help their communities impacted by the economy.
Nonprofits often have little money to fall back on. Clint Mabie, head of the Community Foundation for Southern Arizona, told Inside Tucson Business that 73 percent of nonprofits in the region have less than six months of operating reserves. Mabie explained these small reserves do not mean that nonprofits are irresponsible with money, but rather it's the reality of a cash gap caused by a lack of funding in the region.
Controlling cash flow by controlling costs
One way for nonprofits to keep their budgets healthy is to take advantage of as many programs as they can. Many organizations, while running a tight budget, are unaware of the wide array of grants and exemptions that could improve their budget. For instance, nonprofits have a great chance to save on their unemployment insurance (UI) costs. By switching to the reimbursable method, organizations can avoid unpredictable state UI tax pools and better manage their budgets.
As a reimbursing employer, nonprofits are responsible only for the actual number of UI claims paid out to former employees. Organizations with no unemployment would have no UI costs. However, if UI spikes, programs at the nonprofit could be put at risk. For this reason, it's important for groups to enlist the help of a UI specialist when considering opting out of SUI tax pools.
Savings programs provide nonprofits the maximum amount of savings and the least amount of risk. Insurance agents can also help their nonprofit clients save a substantial amount on their UI costs by informing them about such programs. These savings can be used any way an organization wishes, allowing them to grow and expand or build a stronger cash reserve. Reimbursing is one the easiest grants that a nonprofit can give itself.
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!