July 1, 2014
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 FNCUI@firstnonprofit.com or visit www.firstnonprofitcompanies.com.
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
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.
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!
First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.
The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.