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.
Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.
My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!
First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!
My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!
I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years
ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!
I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!
First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.
Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!