Nonprofit sector recovering from recession

March 17, 2014

Nonprofit sector recovering from recession

The time could be perfect for many nonprofits to re-evaluate their obligation to state UI tax pools. Nonprofit HR has announced a recent survey that suggests organizations are recovering from The Great Recession. The survey found 45 percent of nonprofits increased staff in 2013, compared to just more than 19 percent in 2009, at the height of the recession.

In 2014, more than 20 percent of nonprofits intend to increase hiring and only 7 percent plan to eliminate positions. Because unemployment at these organizations will remain low, it is a good time for leaders to consider making their nonprofit a self-reimbursing employer.

Cost savings with less risk
As a self-reimbursing employer, an organization can opt out of paying into state UI tax pools and pay the state only for the amount of UI costs actually associated with claims paid out to former employees. The only downside is that when unemployment spikes at an organization, there is no pool to help pay the costs. This can lead to a large amount of unfunded liabilities and force a nonprofit to reduce programs.

However, nonprofits can get the cost benefits of self-reimbursement without the risk by gaining membership in a nonprofit savings program. These alternative measures for meeting UI obligations allow nonprofits to protect their assets by building up funding in an account that they own. It can be used to pay for increases in unemployment and is returned to the nonprofit if they ever leave the program.

Organizations also gain access to experts in the UI industry that have a unique understanding of the specific challenges faced by the nonprofits they serve. UI insurance programs for nonprofits are the best way to save money but also remain prepared should another recession suddenly hit.

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


Ready to chat?
Get in touch today to request a no-obligation savings evaluation.


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.

New York Council of Nonprofits, Albany, NY

We were introduced to First Nonprofit through another housing authority. In our analysis and comparison to what we were paying the State, our first year savings was $5,800 plus. We have been with them since the end of 2008 and I am glad we have been. I consider them an arm of our HR department.

Kankakee County Housing Authority, Kankakee, IL

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.

Illinois Network of Charter Schools

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.

Hugh Parry, Retired President of Prevent Blindness America