July 31, 2014
Risk management is certainly a popular topic for nonprofits that want to remain agile and effective. However, there’s one area that tends to be overlooked by such groups: state unemployment taxes (SUTA). The two traditional options for covering the SUTA obligation are paying into the state fund, as a for-profit business would, or electing to become a reimbursing employer and paying out unemployment claims directly, dollar for dollar. Paying the tax into the state fund often means overspending on unemployment taxes and losing money even if your organization has low or no unemployment claims in a given year. The reimbursing employer strategy provides more financial control, but can be extremely risky if an organization experiences a rise in unemployment.
First Nonprofit Group (FNG) offers the safest available programs that mix the best aspects of these two approaches into a risk-averse, cost-effective solution. By providing far more control over unemployment costs, FNG alternatives help nonprofits save money while also protecting them from pooled risk. By employing the use of surety and insurance coverage products and avoiding the cost-pooling elements of contributing to a SUTA fund, nonprofits don’t waste money that could otherwise be spent on operational and project budgets, as well as future claims. With a managed savings or insurance plan, nonprofits can carry such funds as an asset in their books and can even borrow against it when needed. The combination of predictable fees and equal quarterly payments – instead of the heavy first- and second-quarter contributions common with SUTA funds – helps normalize contributions and lessen the financial burden on nonprofits.
First Nonprofit Group also offers the customer support that is lacking from the other options available to charitable groups. Instead of dealing with state 1-800 numbers and dedicating staff members’ valuable time to dealing with these issues, First Nonprofit Group’s customers can use the services of friendly, dedicated and experienced representatives to handle their unemployment needs.
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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.