Nearly 30 years ago, First Nonprofit (FNP) set out on its mission to fix a major problem impacting nonprofit employers: These organizations were forced to choose between paying the overpriced State Unemployment Insurance (SUI) tax for this mandatory insurance cost and exposing their organization to unforeseen risk by self-insuring their unemployment claims. To address this, FNP designed programs that allow 501(c)(3) nonprofits to take advantage of the savings that comes with reimbursement financing while minimizing risk. Today, FNP helps more than 2,000 organizations across the country, including libraries of a variety of sizes, save millions of dollars on SUI each year.
About FNP Programs
Whether you are looking to lower your unemployment costs, minimize claim liability, reduce the stress on your workforce associated with the claims process, or simplify other aspects of the employment life cycle such as recruiting or developing your staff, FNP has safe solutions for you.
FNP program benefits provide:
- Up to a 40% savings on SUI taxes
- Unemployment claims management, hearing representation & auditing
- Live HR consultants and continuing education
- Recruiting tools: job description builder, benefit document creator, salary comparisons, etc.
- Budgetary certainty with a fixed, annual unemployment cost and flexible payment plans
How to Enroll
With unemployment costs rising across the board, we encourage you to take just a few minutes to fill out this evaluation request form so FNP can show you your savings plan. The evaluation will provide a 2023 SUI tax rate projection (if applicable), and there is no obligation to join.
General FNP questions?
Contact First Nonprofit’s Vice President, Cheryl Jones for more information!
Cheryl L Jones (she/her)
Commonly Asked Questions & Answers
Q. What is SUI or state unemployment insurance?
State Unemployment Insurance is one of several taxes that employers must pay via payroll taxes to cover their employees. Commonly referred to as SUI, this tax is used to pay unemployment benefits to former employees who have lost their jobs through no fault of their own. SUI is typically paid in tandem with FUTA (the federal unemployment insurance program), however, 501(c)(3) nonprofits are exempt from paying FUTA.
Q. Who pays the SUI Tax?
In most states, employers are solely responsible for paying state unemployment insurance taxes to fund their state’s unemployment insurance system. It is a common misconception of many employees that they pay into the State Unemployment Insurance program.
Q. Are nonprofits required to pay SUI?
In all states, 501(c)(3) nonprofits are required to pay for unemployment claims in one of two ways: through state unemployment insurance taxes (SUI) or as a reimbursing employer. Reimbursing employers only pay the state for claims paid out to former employees – in essence, it is self-insurance for unemployment claims.
Q. Are there advantages to opting out of the SUI tax system and Reimbursing benefits?
Yes. The main advantage of opting-out is cost savings. While savings numbers vary from State to State, organizations that opt-out and enroll into First Nonprofit’s programs can save up to 40% a year on SUI taxes.
Q. What are the risks associated with becoming a reimbursing employer?
Reimbursing provides no insurance against excessive unemployment claims, creating unprotected liabilities. The bottom line: the cost of Reimbursing the state for large unemployment claims can place an organization’s budget at risk as downsizing, loss of funding, and recessions often lead to elevated unemployment claims.
Q. Are there options to reduce the risk associated with self-insurance and still save money?
First Nonprofit offers several programs to help nonprofits reduce exposure and lower unemployment costs. FNP program benefits include: up to a 40% savings on SUI taxes, unemployment claims management (with hearing representation and charge auditing) and access to live HR consultants.
Q. How much can my organization save with First Nonprofit programs?
Click here to request a savings evaluation for your organization. The analysis is complimentary and there is no obligation to join!