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.
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.
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.
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.
We have had a great experience with FNP. During Covid, when there was the chance that reimbursable nonprofits would have to pay 50% of the unemployment costs, FNP went to bat for us. We would receive weekly information on the Unemployment claim and how they were working to reduce the costs to reimbursable nonprofits. They have a great service also working with [our claims administrator] to make sure all the paperwork is completed correctly for any unemployment claim.
PORT Health Services has had a great experience with the Unemployment Savings Program offered through First Nonprofit. Throughout the years we have been involved in the program, we have increased our reserve account significantly through this program and find the reporting we receive both timely and useful. We look forward to our continued involvement with this program and our connection with First Nonprofit for many years to come.
Job One was spending a lot of money on unemployment. Our insurance broker, Mark Simcosky, recommended that we switch over to First Nonprofit. We did just that! This switch has been a huge savings for us! This switch saved us over $10,000 in the first year. Their customer service is Superior! Any time we have a question, we get a response very quickly. Any time we send them a report and they have a question; they call rather than just assuming. They were very responsive during COVID, even when they were in crisis mode their selves. They also were always there when we needed during COVID and very helpful! We would 1,000% recommend First Nonprofit to anybody that could benefit from it!
My experience with FNP has always been positive. Every time I have had to contact them, I’m always put in contact with a friendly and knowledgeable person. If something is missing from our account, they reach out to us to request it. It’s nice to work with a company that makes sure our account is current. I would recommend them to any nonprofit looking to reduce their unemployment insurance costs.
We’ve saved tens of thousands of dollars PER YEAR by changing to become a reimbursing employer, freeing funds for much needed capital investment. FNP has been a valued partner in this process, providing assurance that we have stopgap coverage for extraordinary claims and keeping claims response painless and simple. It’s a huge Win/Win!