August 6, 2014
Juggling priorities is a skill that many nonprofits have mastered. There are many stakeholders, from employees and board members to donors and those benefiting from projects. There is also the ever-present need to fundraise and generate awareness. Add in all of the responsibilities that come along with operating any business whether for-profit or a 501(c)(3) organization – such as financial management, performing payroll duties and managing the human resources aspects of operations – and running a non-profit can seem like an all-the-time job for managers and directors.
Top-level employees at a charitable organization need to make sure they're doing everything possible to eliminate unneeded expenses. Not only does this help create a more financially healthy nonprofit and cut down on liability, it leaves more money available to funnel directly into programs supporting the nonprofit's mission. Making sure that grant money is going toward the specific parts of the operation for which it was designated – a common stipulation for such contributions – is another unique concern. Nonprofit Quarterly recently highlighted the case of an Alaskan nonprofit group that had trouble successfully managing its grant and ran into problems with the provider.
One unnecessary financial obligation that can be avoided
An area that often causes consternation for nonprofits is the payment of state unemployment tax (SUTA). Although automatically exempt from the federal version of this tax, charitable groups have to actively take steps to free themselves from the state-level obligation. Nonprofits can declare themselves as reimbursing employers, which uses the alternative strategy of direct reimbursement of unemployment claims from former employees on a dollar-for-dollar basis instead of SUTA contributions. This strategy means that 501(c)(3) groups and governmental organizations don't simply lose the money contributed to SUTA funds if they don't experience any jobless claims during a financial year.
However, nonprofits may be unprepared to deal with a spike in unemployment, should they reimburse on their own. This is where alternative solutions such as an Unemployment Savings Program or Excess Loss Insurance become very useful. By paying into a system that provides more access to designated funds rather than simply giving it away to a SUTA trust fund, nonprofits have control and insight into this money that was not previously available.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Group at FNCUI@firstnonprofit.com or visit www.firstnonprofitgroup.com.
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!