Nonprofits should have an unemployment strategy

July 1, 2014

Nonprofits should have an unemployment strategy

Most nonprofits are focused on the future, putting their efforts into making their missions successful and helping those in need. The economy has stabilized and jobs are slowly coming back, even at nonprofit organizations where operating income isn't always the first priority.

A recent report from Indiana University shows how drastically employment rates in the nonprofit sector fell in Indiana during the Great Recession. Overall, more than 1,000 staff members at charitable groups across the Hoosier State lost their jobs due to the economic downturn that started in 2007. These numbers are similar, if not worse, than those of most other states, according to the report. The good news is that since 2011, both jobs and incoming funds have increased for nonprofits.

Keep required spending low to stay agile
While the economy is currently improved, nonprofits know that the market is volatile and lean times may soon arrive again. To keep operating with as few disruptions as possible, 501(c)(3) organizations should consider any and all ways to save money without having to sacrifice efficiency or quality. One area where significant savings can be found is to move from contributing to State Unemployment Insurance (SUI) pools to becoming a reimbursing employer. Instead of having to pay into large-scale state accounts, nonprofits can be responsible for only the unemployment claims of their own former employees. This cost cut can aid organizations that have high SUI obligations, as well as those worried contribution rates will rise as a result of expiring federal loans to states and corresponding increase in state unemployment tax rates.

However, this path requires that nonprofits find a way to manage risk. When organizations become reimbursing employers, a spike in unemployment can create a significant financial strain. Nonprofits can counteract this by participating in an unemployment savings program. This setup allows nonprofits to save money on possible unemployment claims without having to simply surrender those funds. An unemployment savings program allows organizations to carry any contributions as an asset and even bears interest. Payments can also be normalized and spread out over the course of a year, instead of the common payments made to SUI funds during the first half of each calendar year.

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


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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.

WI Council of Religious & Independent Schools (WCRIS), Madison, WI

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.

Community Care Inc., Milwaukee, WI

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.

Gulfside Healthcare Services, New Port Richey, FL

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!

Advancing Academics, Turtle Creek, PA

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.

Chicago Children’s Theatre, Chicago, IL

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.

Daniel Kids, Jacksonville, FL

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.

Homes of Hope, Chicago, IL

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!

Women's Choice Network, Pittsburgh, PA