June 13, 2014
In Kentucky, local nonprofits saw a boost in funding from this year's annual Kentucky Gives Day. More than 400 nonprofits in the state participated in the Web-based fundraiser, hosted at KYgives.org, according to WYMT. The event raised more than $330,000 for the organizations and will likely be held again in 2015.
Nonprofits in states around the country have held similar "give days," most of which take a Web-based approach to fundraising. While the funds are ultimately spread fairly thin, the cost to participate is essentially zero to each of the organizations involved. With a single marketing campaign and one website, hundreds of organizations can benefit. While crowdfunding does not replace more traditional forms of engagement with donors, it is an inexpensive way to raise some extra funds.
Crowdfunding is just one of the many methods organizations are utilizing to keep their books balanced as they continue to recover from the recession. The past five years exposed the fragility of many organizations, and nonprofits have realized that they must be far more conscious about their budgets. While many see the need to save more money in case another recession hits, no groups want to cut programs. To make sure that operations don't suffer because of tight budgets, nonprofits must take advantage of all the opportunities they can to improve their finances.
The benefits of becoming a reimbursing employer
One cost-saving measure that many organizations are not familiar with is the ability to opt out of state unemployment insurance tax (SUTA) pools. One of the many financial blows that was dealt to nonprofits during the Great Recession was the increasing cost of SUTA contributions resulting from extraordinarily high benefit payouts that overwhelmed state unemployment agencies funds. SUTA funded risk pools are unpredictable during good economic times and nearly guaranteed to rise during bad periods. The best move for any nonprofit regardless of the current economic climate is to become a reimbursing employer.
Under this designation, nonprofits are responsible only for the actual amount of money paid out to former employees as unemployment insurance (UI) claims. A nonprofit with no unemployment would have no costs. However, if unemployment does spike, the nonprofit could struggle to pay the state unless it has an alternative financing option. Nonprofits should meet with a professional organization that can determine the best method for satisfying their UI obligations when they have made the decision to opt out of SUI tax pools.
Content presented by First Nonprofit Group, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.
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We’ve been a member of First Nonprofit’s Unemployment Savings Program since 2011 and highly recommend joining. The program is terrific and allows us to earn interest on our own funds while still meeting the state’s requirements on unemployment payments. In addition, the staff are great and always helpful sorting out any questions we may have. Thank you all!
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.
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.
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.