Tag Archive for: employees

Employee Benefits to Offer as a Small Nonprofit

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Employee benefits packages play a big role in attracting and retaining top talent. According to Forbes, 10% of workers say they’d take a pay cut to get access to better benefits.

As a small nonprofit, it can be difficult to determine what benefits mean the most to your employees, especially if you’re working within a strict budget. This nonprofit employee benefits guide goes through the most common types of benefits and how you can add them to your benefits offerings.

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What to Consider Before Offering Employee Benefits

Just like volunteer management, nonprofit employee management should seek to show employees they’re valued and important to the organization. However, small nonprofits may not have access to the same resources as for-profit businesses or large nonprofits. You’ll need to carefully consider your options when building an employee benefits package.

Some things to consider when creating your small nonprofit benefits include:

  • Budget constraints: How much can you afford to spend on benefits?
  • Staff needs and employee preferences: What do your employees need or want from their benefits?
  • Legal compliance: Does a benefit offering meet legal requirements or standards?
  • Missions alignment: Are you offering benefits that stay true to the mission of your organization?
  • Competitive analysis: What are similar organizations offering their employees?
  • Long-term stability of programs: Can your organization sustain a benefit offering for years to come?

Common Benefits Employees Love

Health Insurance

Health insurance is perhaps one of the most important employee benefits you can offer. While organizations with fewer than 50 full-time employees aren’t required to offer health insurance, it’s still a great tool for employee retention. For many employees, a good health plan is almost as important as financial compensation.

Group health insurance plans are one of the most common ways to provide insurance for employees. A group plan offers lower insurance rates to members (in this case, your employees) because the insurance company spreads risk among the group. With a group health plan, you’ll work with an insurance company or healthcare provider to purchase a health plan and then offer employees the chance to join the plan.

Another great way to provide health coverage for employees is through a Health Savings Account (HSA). An HSA is a specialized savings account that allows people with high deductible health plans to save money for health costs. The money in an HSA grows tax-free when used for qualified health expenses, such as doctor visits or prescription drug purchases.

Many employers offer a group health plan and an HSA for employees. If within your budget, you could also contribute to employee HSAs as an added benefit.

Retirement Plans

Like health insurance, a good retirement plan is a major incentive for employees. Two great retirement plan options for small nonprofits include:

  • 401(k)
  • SIMPLE IRA

Both types of plans allow employees to save for retirement by contributing a portion of their paycheck to the plan.

A 401(k) is generally a more complex retirement plan option, but it gives you more flexibility as an employer. For example, employers can set the vesting schedule of employer contributions. By spreading the vesting period out over several years, you can encourage employee retention. Additionally, 401(k) employee contribution limits are higher than SIMPLE IRA limits, which could be beneficial for employees. Employers are not required to contribute to 401(k)s, but offering a contribution match can encourage plan participation.

SIMPLE IRAs, on the other hand, require employer contributions, and all contributions vest immediately. Being vested immediately could lead to employee turnover if other aspects of the job aren’t meeting employee expectations. However, a SIMPLE IRA is a straightforward approach to retirement plans. They generally have lower fees than 401(k) plans and offer more investment options.

Flexible Working Hours or Location

After the COVID pandemic, many employees realized the benefits of working from home or working flexible hours. If your organization can offer these options, it could be a great way to attract and retain great employees.

Some ways to offer flexible working conditions include:

  • Work from home and fully remote roles
  • Hybrid work schedules
  • Flexible scheduling for employees to set their own hours

Not all organizations can offer remote work. An animal shelter, for example, needs on-site employees to care for animals.

However, you can still add flexible working options or incentives as perks of the job. For example, a 4-day work week gives employees a longer weekend while still providing necessary staff.

Offer Paid Time Off (PTO)

Employees with little to no time off will quickly get burnt out–no matter how much they love your mission. Providing ample PTO is essential to helping employees stay motivated and excited to work.

There are many ways to give employees the time they need to reset and rest, such as:

  • Earned vacation days
  • Sick leave or a designated number of sick days
  • Holidays, including paid holidays

Your budget will likely be one of the biggest factors when creating an employee PTO plan. However, you should still aim to give your employees plenty of options for paid time off, even if you’re working with a small budget. Consider giving employees days off that schools are regularly closed. This can really be a stand-out for working parents when considering which employer to go work for. An employee who has the time they need to take care of themselves or their family will be more efficient and effective at work.

Wellness Programs

Wellness and fitness programs have become a popular employee benefit in recent years. Wellness programs generally include options like:

  • Gym membership reimbursement
  • Wellness challenges and support, such as a monthly steps goal challenge
  • Fitness classes
  • On-site workout rooms
  • Immunization clinics or medical screenings

In addition to physical health programs, consider offering mental health support for employees. For example, you could offer access to a stress management program or weekly meditation sessions.

Family-Friendly Policies

Family-friendly work policies are an excellent way to encourage employee retention and create satisfied employees. Familial leave policies, such as maternity and paternity leave, paid bereavement for loss of a pregnancy, and allowing new parents to step away from work and focus on their new child.

Additionally, you can improve work-life balance through flexible working conditions. For instance, allowing parents to shift their working hours to accommodate dropping kids off and picking them up from school.

Before you consider whether a paid parental leave is an option, consider all of the costs. We advise our clients to ask themselves:

  • Would allowing a team member take a paid leave actually cost the organization any additional money? This could be through paying a temporary employee or loss of revenue that the team member in question would be earning through contracts or other earned revenue options. 
  • How many employees would actually be at risk for utilizing this benefit each year? And, how does this compare to the cost of offering and paying for a portion of a short-term disability plan? In many cases, short-term disability is even more expensive.
  • Would a paid parental leave help with recruiting and retention of highly sought after talent? 

We have seen that many clients realize that the cost of offering these policies are not as much as they would have thought.

Transportation Benefits

Organizations in urban areas can offer transportation benefits for employees, such as transit or parking passes. You might also want to encourage the use of public transportation or employee carpools using incentives for employees who do so.

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Remember to Weigh Your Benefits Options

A good employee benefits program can motivate employees and attract top talent. Once you have a benefits plan in place, it’s important to also share it with employees and new hires so they can start taking advantage of it.

If you’re wondering how to maximize employee benefits while staying on budget, contact The Charity CFO today.

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Common HR Compliance Mistakes in a Nonprofit

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It is no secret: people drive the mission in a charitable nonprofit.

So, human resources are critical towards the overall success of a nonprofit. Staff are the key to turning your nonprofit into a successful one. But, people providing services to nonprofits can be classified as: employees, independent contractors, or volunteers.

Because employment laws and specifics are complicated, and subject to change, Tosha Anderson, CPA, of The Charity CFO sits down with Moses Balian, an HR Consultant at Justworks, in the latest episode of A Modern Nonprofit Podcast.

LISTEN TO COMMON HR COMPLIANCE MISTAKES IN A NONPROFIT PODCAST EPISODE HERE!

In this episode, Tosha and Moses discuss:

  • Understanding the difference between an employee and an independent contractor
  • Deciding whether, and how, you should pay interns
  • Creating lasting relationships with volunteers, and when you should pay them
  • Per diems
    • When is it acceptable to pay freelancers or staff a per diem?
    • What happens to hourly or salary when you initiate per diems with freelancers?
  • And much more!

Importantly, the conversation and tips on this version of A Modern Nonprofit Podcast is not intended to be legal advice. Rather, it is an opportunity to learn the endeavors that have worked for nonprofits and human resources professionals as a means of guiding your modern nonprofit to achieve greater success.

That said, The Charity CFO utilizes JustWorks to ensure its employees are correctly compensated. As Moses said in this podcast, JustWorks helps entrepreneurs and businesses grow with confidence. Your nonprofit can receive access to big-company benefits, automated payroll, HR tools, and compliance support — all in one place.

Consider JustWorks today and use The Charity CFO’s referral code, which you can access here. 

You listened to this episode of A Modern Nonprofit Podcast. Now what?

Check out The Charity CFO on social media and on YouTube. As we strive to be a modern resource for modern nonprofits, our community is growing like never before. Follow and subscribe to our content for future episodes releases, nonprofit accounting tips and much more related to helping your organization achieve its best self.

Don’t forget to SUBSCRIBE to A Modern Nonprofit Podcast, too! 

Interested in learning more about how our organization can best help your nonprofit achieve efficient accounting and bookkeeping practices, all at a price you can afford? Request a free consultation with us and let’s start your nonprofit’s journey to newfound success TODAY. 

 

 

How to Manage Payroll as a Nonprofit

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According to the United States Bureau of Labor Statistics, 12.3 million people are employed by nonprofits. That’s a lot of employees to manage!

Payroll is a critically important part of running any business and nonprofits are no different. This guide will explore everything you need to know about how to manage payroll for your nonprofit with accuracy.

Finding Payroll Services

Firstly, your organization needs a payroll manager and software to manage all the employee data. What is a payroll manager? This is someone specifically trained to manage the ins and outs of all your payroll needs including taxes and employee benefits.

Your organization likely needs to invest in a quality portal for payroll services. If your organization is really small and brand new, you might be able to get away with just a spreadsheet, but it’s not the best practice for accuracy and data transparency.

Payroll management isn’t easy and if you’re asking yourself how to manage my payroll, you’re definitely in need of professional assistance. Besides knowing the intricate details of payroll tax management and other tricky laws, these services can cut checks, facilitate direct deposits, and even track paid time off.

The best payment systems are two-sided so that employees can also log in and download their own data when they need it. Most of them even have smartphone apps!

This is a great resource for finding the payroll system that fits your organization. Paying a monthly cost for these services is well worth it in the long run for you and your employees to have a good work experience.

Getting Started With Payroll

As you get ready to start paying your employees, you should ask yourself a few key questions. This will help make tax season easier and ensure there aren’t any issues with your employees!

What Are Your Benefits?

Keeping track of all the information for each employee’s benefits can seem like a ton of work, but it’s crucial that the correct amount of money is removed from your employees’ pay checks each month.

Employee benefits might include, but aren’t limited to:

  • Health Insurance
  • Health Savings Account/Flexible Spending Account
  • Dental Insurance
  • Vision Insurance
  • Retirement Plan
  • Life Insurance
  • Transportation Fund
  • Paid Time Off
  • Sick Time

All of these benefits are up to the employer to offer, but every organization should verify their exact requirements to provide health insurance to their employees under the Affordable Care Act. This also may stipulate what portion, if any, of employee health insurance your nonprofit is required to cover.

Who Are Your Employees?

Do you hire contractors or part-time staff? These workers may not have employee benefits and their payroll will need some tweaking. Contractor taxes also differ from that of full-time employees, so be sure to have all of this information prior to starting.

In addition to collecting W-4 forms from employees, be sure to provide all necessary paperwork for enrolling in health insurance and other employee benefits. Keep meticulous records on each employee both digitally and in hard copies.

How Are You Handling Payroll Taxes?

Tax season might be everyone’s least favorite time of year, but it’s crucial for your nonprofit organization to withhold the correct amounts for each employee for both state and federal taxes, as your state allows.

After you collect each employee’s W-4 tax form, input the data into your payroll software and be sure to verify this information with your employee.

Here is a list of some taxes your organization might need to withhold from paychecks and potentially match per dollar:

  • Local Income Tax: This pertains to cities, like New York City or Washington D.C.
  • State Income Tax: Some states don’t have this, like Tennessee and Florida. It depends where your nonprofit is located.
  • Federal Income Tax: The W-4 will let you know how much to withhold for each paycheck.
  • Worker’s Compensation: This is to protect your nonprofit from any injuries that could occur on the job.
  • State Unemployment Tax: This is a pool of funds that go to unemployment benefits.
  • Social Security: This supports those on social security benefits.

What Are My Legal Requirements?

In addition to your requirements to provide healthcare, your full-time employees have rights that you must adhere to according to the law.

For example, depending on your state, you may be required to offer a certain amount of sick days or vacation days.

You also may be required to provide paid or unpaid leave for new parents. Check with your nonprofit legal counsel to learn your particular state’s legal requirements before setting up your payroll system and employee handbook.

Tips to Manage Payroll

Part-time employees, full-time employees, and contract workers all rely on your ability to pay them on time and in full. While nonprofits might be exempt from certain taxes, they still function as a business and owe their employees a progressive payment system that accommodates all their needs.

If you don’t want to hire a payroll service, here are a few more options.

Accounting Department: If your organization is growing rapidly, consider forming a department to handle all of the financial information in-house with the help of software.

Hire a Bookkeeper: Bookkeepers have an extensive knowledge of payroll and financial systems. They can either be someone you hire to be in-house, but if your organization is small it is worth investing in a company and being one of their clients. Then, your bookkeeper is only used when needed. This is a great way to cut costs while taking the burden of payroll off your own plate while ensuring accuracy for employees.

Online Payroll/Software: If you’re brave, scrappy, and financially inclined, try managing all of this on your own.

Finalizing Employee Payroll

Now that you have all the insider tips on how to manage payroll for your nonprofit, contact us for more information on how we can help your nonprofit have efficient and transparency pay processes.

After all, you should focus on your mission and we’ll handle the rest!