Unemployment Savings for Nonprofits
First Nonprofit unemployment savings programs have saved Florida nonprofits over $2 million in the last 10 years!
Thinking outside the box can be quite beneficial especially when it comes to financial management. You certainly spend a lot of time and effort developing innovative ways to raise money, but you might miss out on creative ways to cut costs. One smart choice is to sign up for one of First Nonprofit’s unemployment programs rather than continuing to use your state’s unemployment system. Doing so might save tens of thousands of dollars annually, but the State imposed deadline to save is November 30.
Florida companies typically pay $1.36 in SUI (State Unemployment) taxes for every $1 in claims paid out each year. Despite the pandemic, the Florida Department of Revenue received approximately $21 million in excess jobless claim payments in FY 2020. Experts anticipate costs will continue to rise.
According to federal law, organizations are free to reject the state’s unemployment insurance bureaucracy. In addition, you can save between 30% and 40% of your current payments to the state system by paying for your own claims, but you must move quickly because the deadline to opt-out is November 30. Click here for information on the options available.
In FY (fiscal year) 2020, Florida received nearly $21 million in overpayments from unemployment claims. The pandemic’s widespread fraud will continue to result in cost rises. Learn how to opt-out of this expensive program and cut unemployment expenditures by 30–40% by attending the free webinar on October 26. The webinar will include:
- How to save 30–40% on unemployment costs
- How to reduce fraud costs
- Effective documentation processes
- Determine unemployment claim liability
Because of COVID, the federal government spent nearly $656 billion on enhanced unemployment compensation. Due to easy access to money, fraud significantly increased. Additionally, the enormous influx of new claims, the lockdown, and being required to operate from home made many state agencies vulnerable. It indicates that Florida made erroneous payments totaling between 10% and 13% in 2020. Anticipate continued rises in unemployment costs due to the need to replace these funds.
Is It Legal?
This choice is not just acceptable; it is also restricted to charitable, governmental, and tribal organizations. “The states are required to provide nonprofit organizations, or groups of such organizations, with the option of reimbursing the state for unemployment compensation payments attributable to the service with the organization in lieu of paying contributions under the normal tax provisions of the state law,” according to the Internal Revenue Code. To put it simply, nonprofit organizations have the option to stop paying into the state’s tax system and start paying their own unemployment claims.
Is It Financially Viable?
You’ll probably save between 30% and 40% of your present payments to the state system by paying for your own claims. However, regardless of whether your unemployment claims totaled that amount or not, you must pay the state a set sum each year. As a result, you overpay into the state system every year. And the state NEVER gives you your money back. Florida organizations saved an average of 36% in 2017 and 31% in 2019.
Is it Safe?
The significant dangers of leaving the state program make many charities unwilling to do so. For instance, the monetary amounts of submitted claims could possibly bankrupt a nonprofit in a year when it loses funding and experiences unforeseen layoffs. Instead, you can enroll in one of First Nonprofit’s unemployment programs, which are safer than self-insurance and more economical than state plans, as a safe alternative to paying state unemployment insurance fees.
Already self-insuring this cost?
First Nonprofit programs offer a fixed annual cost, eliminate the uncertainty of your exposure, and reduce the danger of being a self-insured business.
Additional benefits include:
- A designated unemployment claims administration staff is available to help you with all claims, appeals, and hearings, among other advantages.
- Background checks at a discount, starting at just $9.94, with no yearly fees or minimum usage requirements.
Are Nonprofits Using This Option?
Over 2,000 charity, governmental, and tribal organizations nationwide rely on First Nonprofit to control, manage, and protect their budget from speculative unemployment insurance costs.
How Can You Take Advantage of This Opportunity?
Click here to view the application form.
Fill out this application to get a free, no-obligation savings analysis on your state’s unemployment costs. Any queries you may have can be directed to Cecilia Piazza at cpiazza@firstnonprofit.com or (312) 728-9962.
Footnotes: 1-IRC Section 3309 (a)(2).
In FY 2020, Florida received nearly $21 million in overpayments from unemployment claims. The pandemic’s widespread fraud will continue to result in cost rises. Learn how to opt-out of this expensive program and cut unemployment expenditures by 30–40% by attending the free webinar on October 26.
Goodwill South Florida has used the program for several years. The first year on the program they saved $38,000. Bridget Pallango, Senior Vice President, Human Services, answered some questions about their experiences with the program for Florida Nonprofits:
Q: What would you say to anyone considering this program?
A: From our experience at Goodwill we would encourage everyone to “at least give it a look”. We were skeptical at first, but we gave it a look, compared our financials with what could be possible and then we made the switch. We are glad that we did.
Q: How has the program affected your budgeting?
A: It has created a more stable budget in the unemployment area with fewer fluctuations.
Q: What is the greatest benefit of the program?
A: The administration of the unemployment program is very hassle free. We have saved an incredible amount of money over the years which has helped our budget immeasurably. It has also saved a lot of staff time.
Q: How has it been working with First Nonprofit?
A: It has been flawless from day one!
Q: Have you ever had a special request?
A: No, I don’t believe that we have ever had a special request because everything always runs so smoothly.
First Nonprofit programs provide reduced unemployment expenses, risk management, improved cash flow, and expert claim and HR advice to more than 2,000 organizations across the country. As a Florida Nonprofit, you can request a free, no-obligation savings evaluation from First Nonprofit and receive a 20% discount on their one-time enrollment fee with membership. The evaluation will provide:
- An estimate of your 2022 SUI tax rate.
- A comparison of what you would pay in unemployment insurance taxes versus First Nonprofit programs.
First Nonprofit will handle all paperwork with the state unemployment agency when you enroll in their unemployment programs.
If First Nonprofit is unable to save your organization money, they will let you know that as well. Click here to have peace of mind knowing that your organization is efficiently financing unemployment insurance in 2022 by requesting an evaluation from First Nonprofit.
This program is a Florida Nonprofits membership benefit. Call Marina Pavlov 305.557.1764 to enroll. Thank you to Cecilia Piazza and Cruz Mendez, First Nonprofit Unemployment Savings Program, LLC.
