Cash Without the Fundraising

Cash – without the fundraising!

Is your organization in need of additional funding? Positive cash flow? You may be overlooking an operating cost you can reduce and budget—state unemployment insurance!

Nonprofit employers across the Mountain State are submitting their first quarter 2017 unemployment tax (SUTA or SUI) payments to the WorkForce unemployment agency this month. Employers paying the state unemployment tax are making their largest payment of the calendar year along with their wage reports. Organizations who self-insure (or reimburse) their unemployment are receiving their quarterly statement of unemployment benefits paid. But exactly how much does unemployment insurance cost?

Employers in West Virginia paid an average SUTA cost of $216 per employee in 2009. Since then, the average cost has increased to $348! Therefore, on average, an employer with 50 employees pays about $17,400 annually. However, maximum-rated employers can pay up to $1,020 per employee! But what happens when an organization has no unemployment claims? WorkForce West Virginia does not issue any refund for unused unemployment funds.

Employers who are self-insured and no longer paying SUTA are already saving money, but face challenges when it comes to maximizing cash flow, reducing costs and minimizing risk. Employers in West Virginia have a maximum claim liability of up to $11,024 per individual. In the event that an employer shuts down a program that leads to the layoff of 5 people, the organization is open to $55,120 of unemployment claim liability from this single event. Self-insured employers have no cap on their unemployment insurance claim costs and often have fluctuating quarterly payments. It should also be noted that in fiscal year 2016, WorkForce made claim overpayments of over $10 million.

West Virginia Nonprofit Association Business-Consultant member, First Nonprofit Group (FNG), provides unemployment programs to 501c3 nonprofit and government entities at a lower cost than SUTA. FNG’s fixed program fees are calculated exclusively using employers’ specific unemployment experience and employment profile. There is no shared risk and particularly, there is no joint and several liability. Nationally, nearly 2,000 organizations rely on First Nonprofit to reduce, manage and safeguard their budget from uncertain unemployment insurance expenses. Program benefits include:

• An average 30% savings over SUTA costs
• Refund and experience credit options
• Fixed quarterly payments to coincide with budgets and improve cash flow
• Stand-alone excess loss insurance to cap costs
• Access to unemployment claim professionals to assist with claims processing, auditing claim payments, appeals and hearings

To find out how much money your organization can save and create a positive cash flow, contact First Nonprofit Regional Sales Director, Marshall Whittey at mwhittey@firstnonprofit.com or (312) 239-8394. You can also visit www.firstnonprofitcompanies.com to learn more about unemployment insurance costs and options.