April 28, 2014
One of the greatest challenges for nonprofit organizations is cash flow. The need for services is unpredictable, as are the level of funding and the size of donations an organization receives. Ensuring that there is enough money to both pay bills and provide for the community requires meticulous financial management.
The ability to budget and manage cash flow is one of the most impressive feats accomplished by nonprofits since the recession. Since the economic downturn, grants from government organizations have dropped, as did funding from private donors. At the same time, demand remained high for nonprofits to help their communities impacted by the economy.
Nonprofits often have little money to fall back on. Clint Mabie, head of the Community Foundation for Southern Arizona, told Inside Tucson Business that 73 percent of nonprofits in the region have less than six months of operating reserves. Mabie explained these small reserves do not mean that nonprofits are irresponsible with money, but rather it's the reality of a cash gap caused by a lack of funding in the region.
Controlling cash flow by controlling costs
One way for nonprofits to keep their budgets healthy is to take advantage of as many programs as they can. Many organizations, while running a tight budget, are unaware of the wide array of grants and exemptions that could improve their budget. For instance, nonprofits have a great chance to save on their unemployment insurance (UI) costs. By switching to the reimbursable method, organizations can avoid unpredictable state UI tax pools and better manage their budgets.
As a reimbursing employer, nonprofits are responsible only for the actual number of UI claims paid out to former employees. Organizations with no unemployment would have no UI costs. However, if UI spikes, programs at the nonprofit could be put at risk. For this reason, it's important for groups to enlist the help of a UI specialist when considering opting out of SUI tax pools.
Savings programs provide nonprofits the maximum amount of savings and the least amount of risk. Insurance agents can also help their nonprofit clients save a substantial amount on their UI costs by informing them about such programs. These savings can be used any way an organization wishes, allowing them to grow and expand or build a stronger cash reserve. Reimbursing is one the easiest grants that a nonprofit can give itself.
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.
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
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!