Tax bills that impact nonprofits continue to surface

March 28, 2014

Tax bills that impact nonprofits continue to surface

The New Hampshire House recently killed a bill that would have placed a new tax obligation on some of the state's nonprofits. While lowering the overall business tax from .75 percent to .68 percent, it would have required larger nonprofits to pay the tax for the first time, according to New Hampshire Public Radio.

Some members of the house expressed concern that the bill would place already fragile nonprofits and charities at risk. The motivation for the bill was based on the belief that some of the largest nonprofits employ many individuals and compete with companies in the private sector.

While the bill in New Hampshire failed, nonprofits across the nation have been met with increasing financial obligations to the communities that they serve as state and local governments look for ways to recover revenue lost during the recession.

The Chronicle of Philanthropy recently reported a tax plan announced to the U.S. House of Representatives would place a 25-percent surtax on nonprofits that pay more than $1 million to their employees. While the bill is predicted to be a tough sell during an election year, it still represents a changing attitude among lawmakers regarding the amount of tax that nonprofits should pay.

Organizations can still control UI costs
While nonprofits may be losing tax exemptions elsewhere, they can still save money on state unemployment insurance by becoming reimbursing employers. As a reimbursing employer, they are responsible only for the actual cost of claims submitted against their own organization, and do not need to make tax payments to state tax pools. However, organizations still need direction and a safety net when becoming reimbursers.

With unemployment savings programs, such as those offered by First Nonprofit Group, organizations can enjoy the cost savings of becoming a reimbursing employer but with less risk. Because nonprofits are still responsible for paying UI claim debt, without a savings plan UI costs could be devastating if unemployment suddenly spikes. 

UI programs come with the services of experts in the nonprofit field who can ensure that claims are paid correctly and on time. They can also help organizations choose from a number of different plans, based on unemployment history, size and other factors.

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.

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In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund
streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.

Asian Health Services, Oakland, CA

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.

Ensight Skills Center, Inc, Fort Collins, CO

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.

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New York Council of Nonprofits, Albany, NY

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. We

Thresholds, Chicago, 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, Chicago, IL

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.

Prevent Blindness America, Chicago, IL