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September 29, 2014

The 6 Signs of a Highly Engaged Employee

Engaged employees mean lower turnover and more productivity, as well as results that directly affect your mission.

But finding and hiring highly engaged employees is difficult. You might ask - How can an employee be “engaged” before they’re even hired? Well, the highly engaged employee is often a person who simply leans in that direction in all parts of their life. That’s why finding them is so important for your nonprofit – because it’s easier to help an engaged employee thrive than to try to build one from the ground up.

Here are some signs of a motivated personality when you’re looking at hiring, or even internal development:

1. They don’t expect their organization or their leaders to provide all the stimulation in their workday or their job. They seek out new opportunities to engage in their job on their own. Complaining about a former manager or job not providing enough work satisfaction in an interview can be a red flag that they didn’t take that extra step to engage themselves at their previous job.

2. They know their performance speaks for itself, and they’re not worried about what their organization can give them, but rather about what they can give to their organization. They have a low sense of entitlement. (Although rewarding and recognizing them is important to keeping them engaged!)

3. They help inspire others to love your mission, including clients and volunteers.  They can’t help but be excited about what they’re doing and that translates to others.

4. They are engaged despite the conditions around them. Even if their last job wasn’t perfect, they found ways to be engaged. And even motivation in other places of their life can show an “engaged” personality – like running a 5k to help a local dog shelter. Your job is simply to foster this engagement at work.

5. They enjoy shaping their own outcomes – and the outcomes of your organization. Being a voice in the direction of your organization, whether it’s something small like finding a better way to file invoices, or more strategic like new ideas for an annual campaign, they will feel happiest when they can give something to your organization.

6. They like to stretch the limits. This can be uncomfortable for leaders, but allowing engaged employees to think outside of the box can lead to some amazing results. And sometimes listening and showing you are truly interested in their input, even if it doesn’t get used in the end, shows that this behavior is not only welcome, it’s appreciated – and it should be!
September 28, 2014

EAP and Performance Issues

Q: How does an employer go about using the Employee Assistance Program (EAP) to address an employee’s performance problems that may be related to issues outside of work?

A: The employer should contact the Employee Assistance Program (EAP) directly and request a review of the process for making referrals. In general, during the implementation process, the EAP provides the contracting employer with that information so that employees and employers have a clear understanding of the services the EAP can offer employees and the process by which the employer can make referrals to the service. This service typically includes employer assistance so that employers may communicate directly with the EAP counselor to provide a “heads up” to the counselor regarding the performance issue and obtain guidance for handling the discussion with the employee. Then the employer can have the performance discussion and refer the employee to the EAP as part of the action plan for performance improvement. Discussions between the employee and the EAP are confidential, and the employer should not expect feedback from the EAP regarding those discussions.

While the employer can make the referral, it is ultimately an employee’s choice whether or not to contact and work with the EAP. If the employee chooses not to seek help or address the issue that led to the referral in the first place and performance does not improve, then the employer should follow its progressive disciplinary process, including corrective action up to and including termination of employment.

Question and Answer provided by ThinkHR. Learn more about how your nonprofit can gain access to their expert HR staff here.
September 24, 2014

Emergency Succession Planning: Is your nonprofit ready to stop, drop and roll?

If your Executive Director/CEO, CFO or COO suddenly couldn’t show up to work, would your organization be prepared?

Sometimes it’s sudden, like an accident or health crisis, and other times it’s simply a short term window to prepare for a leader leaving—but it is always important to have a backup plan when it comes to a leader’s absence.

It’s called emergency succession planning, and it’s critical to your organization’s survival.

Like any good emergency plan (think of those fire drills as a kid in school) – there should be clearly laid out steps to your emergency succession plan.  Ready to stop, drop, and roll?  Here are some basic elements to any good leader succession plan:
 
  1. Identify the key responsibilities and functions of the position that would need to be taken over in an emergency loss of a leader.
  2. Who are the people/titles internally who would take over these functions in the interim? Is it one person or multiple?
  3. Create a training and orientation plan for these backups.
  4. Who will the Acting CEO be? Consider whether an Interim CEO would be best for the coming 6-18 months and how you would recruit that role. Best practice states that the Interim CEO should not be an internal employee, so they can be a voice of neutrality for other employees and provide an outside perspective to identify opportunities for improvement.
  5. Determine what the Board’s role in the process will be. How will they be involved in selecting a new CEO, and how will they support the new CEO and the onboarding process?
  6. Have the emergency succession plan reviewed and adopted by your Board.


Learn more about emergency succession planning in this report.
September 24, 2014

The ABCs of Ethics in the Workplace

While a substantial paycheck may entice a job candidate to seek employment at a particular nonprofit, an organization’s reputation for ethical procedures and workplace culture can be just as persuasive. An ethical workplace provides a fair and harmonious environment for every worker, promoting equal opportunity, honesty and open communication. Specifically for leaders, developing and adhering to ethical values in the office is key to helping employees determine what type of behaviors are expected of them.

Here are a few ways you can maintain an ethical culture at work:
 
  • Communicate ethical priorities through training, meetings and ongoing encouragement—From the get-go, it’s imperative to train your employees on the fundamental values of your organization. Explain why ethical behavior is a priority, and how to effectively carry out ethical action. Give them realistic examples of potentially tough decisions, and equip them with the knowledge and tools they need to make the ethical choice.
  • Lead by example and be consistent with your follow-through—Your employees can readily identify inconsistency or unfair treatment. Rather than merely telling them how to act, show them that you not only support ethical behavior, but practice it on a day to day basis. This includes addressing bad decisions, and brainstorming ways to improve ethical practice.
  • Hire employees with a similar ethical compass—Being upfront with your nonprofit’s ethical culture during the recruitment process can help you determine best-fit candidates. More often than not, employees will have a difficult time upholding ethical priorities if they do not agree with them. Hiring individuals with the same morals can lead to an easier transition and will further strengthen your nonprofit’s ethical foundation.


Because nonprofits are often small organizations working in a small sector, their reputations are precious. Creating and implementing a strong ethical culture where employees maintain integrity will improve internal morale and help the overall business grow.

Learn more about how to encourage strong ethics within a work environment here.
September 22, 2014

10 Ways to Avoid Costly Employee Turnover

In order to minimize costly hourly employee turnover, there are 10 things you can do, writes Mel Kleiman on his Humetrics blog:
 
  1. Hire tough (so you can manage easy).
  2. Let every new employee know why their job is important.
  3. Avoid the mindset that it is “only an entry-level job” (in both the new employee’s mind and in your own mind).
  4. Pay the highest wages you can afford. (When you can pay more, then you can expect and get more.)
  5. Give a pay raise as soon as the new employee deserves one (not on a time schedule, but on a productivity/ learning schedule).
  6. Give recognition when recognition is deserved.
  7. Train for process, not for speed.
  8. Help the new employee make friends at work.
  9. Learn to fail fast. (When you realize you made a hiring mistake, release and replace that person immediately.)
  10. Make work FUN!!


Here at UST, we believe hiring the right employees is one of the top ways to reduce your organization's overall unemployment costs. That's why we're committed to this blog, and giving nonprofits the tools they need to reduce turnover, reduce costs, and reduce time spent managing them!  We also want to make sure nonprofits aren't overpaying for unemployment taxes. You can find out by filling out a (free) savings evaluation here.
September 19, 2014

The Harsh Yet Necessary Step Toward Nonprofit Growth

Bad habits can be contagious

Even your strongest staff members can be negatively influenced when working with bad employees. Pairing others with someone who is unmotivated and performing inadequately can cause a domino effect of poor performance—making the overall business suffer.

Poor employees could chase away top performers

Top tier employees want to work with others who are just as driven and focused as they are. When talented workers see poor behavior or lack of contribution go unnoticed, they will begin looking for alternative job opportunities—ones where they can work with other high performers and feel more appreciated.

Low performers take up valuable space

By keeping low performing employees, you could be missing out on a new crop of talent. But how can you hire these rockstar candidates if there are no available roles at your organization? Making room for strong individuals who are willing to take initiative and contribute to the team is imperative when building a strong organizational foundation.

Because nonprofits often work with limited budgets and resources, developing and retaining a top-notch staff is key to successfully attaining mission objectives. And while it’s never an easy task to fire a bad employee, you’re doing what’s necessary as a leader to keep your organization moving forward.

Learn more about talent development strategies here.
September 17, 2014

HR Question: Can we transfer a sub-par employee?

It can be okay to replace a sub-par employeee[/caption]Q: Would it be permissible to transfer a long-term part-time employee who is an average to poor performer to another role and replace that position with a full-time employee?

A: Unless there is an employment contract or collective-bargaining agreement that suggests otherwise, employers do have the ability to set an employee’s work hours and job duties based on business needs. In the situation you described, you have a poor performer whom you want to transfer to another position, enhance the job, and bring in another employee to do the work. We assume that you have been addressing the current incumbent’s poor performance issues and the job that you are moving the employee into will be more in line with his or her skills and hopefully provide an opportunity for the employee to be more successful on the job. If you have not addressed your performance concerns, now is the time to do so. Explain why the change is necessary and use the opportunity to discuss the employee’s career goals and development needs. It is critical that the employee receive feedback regarding performance and behavior, as this may continue into either role and should be addressed to correct the concerns or take progressive discipline as appropriate. Have these conversations before you announce the new employee transferring into the expanded position.

The employee may have questions regarding why you are taking a part-time position and turning it into a full-time one and may suggest that he or she could be successful in the job if allowed the additional time each day to complete the duties. Be prepared to address that and provide the employee with a copy of the expanded job duties and explain why he or she is not the right fit for that job. Having a direct and respectful conversation, with specific feedback and action plans to move forward, can go a long way to making the change successful.

Question and Answer provided by ThinkHR. Learn more about how your nonprofit can gain access to their expert HR staff here.
September 16, 2014

How to Create a Smooth Transition for You and Your New Hire

New employees provide fresh ideas, new skill sets, and positive thinking—all of which impacts any nonprofit’s potential growth. However, a new hire’s success rate is greatly influenced by their initial onboarding experience.

Follow these 6 simple methods to ensure a successful employee transition:
 
  1. Educate everyone prior to the new hire’s start date—Encourage your new employee to learn more about the nonprofit’s history and mission objectives, either through research or conversation. In addition, notify current staff of the new employee’s background and role responsibilities so everyone is prepared for the transition.
  2. Create and communicate realistic goals—Develop both short and long-term goals for your new hire. Be as clear as possible when outlining job priorities, and check in consistently to give constructive feedback on their work.
  3. Assign a senior mentor—Having a senior employee, who is well versed in your nonprofit’s procedures and history, will provide your new hire with a valued resource that can further build their sense of belonging. This additional outlet will also free up some of the time you would be spending on your new employee’s training.
  4. Encourage innovative thinking and listen to new ideas—Explaining correlated challenges and strategic goals to your new hire could help inspire new solutions. A new employee’s fresh perspective can help break the cycle of seemingly unavoidable problems.
  5. Help them feel like they’re part of the team—Construct interactive opportunities in team meetings and planning sessions. It’s also important to have team building opportunities, enabling your staff to develop strong professional and personal relationships with one another.
  6. Celebrate early wins—No matter how small the accomplishment, celebrate early wins as a form of encouragement for the new employee’s hard work. But don’t forget to celebrate the team’s work as a whole to continue the positive momentum.


Taking the time to efficiently train your new employees on your nonprofit’s culture, strategic goals, and personal role expectations will not only help new hires adjust, but also strengthen your organization as a whole.

Learn more tips about how to manage new employees here.
September 09, 2014

HR Question: Can the board request payroll info?

Q: Can executives or board members review our company payroll register upon request?

A: Yes. You may wish to inquire as to what types of compensation information they need so that you are providing the detail and data that is relevant for their review and discussion. You will want to ensure the privacy of your employees’ personal information, such as concealing Social Security numbers, garnishments, etc.

Executives typically need relevant summary compensation information for decision-making with revenue and cost considerations. Reviewing the actual intent of how the data will be used may enable you to provide a summary report without revealing data that could potentially be perceived as inappropriate to reveal.

Question and Answer provided by ThinkHR. Learn more about how your nonprofit can gain access to their expert HR staff here.
September 01, 2014

HR Question: Can FMLA be used for frequent bathroom breaks?

Question: If an employee states that he or she needs to use existing Family and Medical Leave Act (FMLA) designation during the day for restroom breaks, is that something the employee can do?

Answer: More than likely the frequent use of a restroom may be a serious health condition; however, one would look to the Americans with Disabilities Act (ADA) prior to counting this time against the Family and Medical Leave Act (FMLA) entitlement.

In general, when counting bathroom time against an employee’s FMLA entitlement, only do so if the frequency and duration extends beyond the employee’s normal lunch and break periods.
 

Question and Answer provided by ThinkHR. Learn more about how your nonprofit can gain access to their expert HR staff here.

August 28, 2014

HR Question: Terminating Employees for Past Mistakes

Q: Can an employer terminate an employee for making a costly error years ago that has just been discovered?

A: This answer is based upon the fact that there is no specific employment contract in place that outlines specific reasons for termination of employment and that the employer has an employment-at-will policy in place that provides for termination at will based upon the employer's discretion.

From the detailed description of the situation, this employer does have an internal disciplinary procedure in place that specifies termination of employment for performance. This error was made years ago and could have been detected if the employee had been conducting annual audits of the file, which was not done, compounding the error.

Although employers can terminate employment "at will", there should always be a legitimate business reason for the termination that is well documented, nondiscriminatory and carefully considered in order to reduce the employer risk of liability from wrongful termination suits.

The employer should consider the following prior to making the final decision:
 
  • Is this employee in a protected class (race, gender, age, disability) where s/he might believe that s/he is being targeted because of that class?
  • Was the process for auditing and correcting the errors documented and was this employee trained to conduct the audit?
  • Is this a one-off issue with the employee or have there been other instances of performance concerns? If so, have those concerns been brought to the employee's attention and was s/he given the opportunity to correct the performance deficiencies?
  • Is there anything that the employee's manager or senior management missed that could have prevented this situation?
  • Has this situation ever happened before with another employee? If so, how was it handled?
  • If an audit of other customer files took place today, could there be this same type of error made by other employees (pointing to an overall training or supervision issue)?


If the employer believes that the situation warrants termination of employment because it is well-documented, the employee has been properly trained, the supervision was adequate, and that this is a unique situation, then a termination is allowed, but we recommend confirming the decision with legal counsel prior to the termination.

Question and Answer provided by ThinkHR. Learn more about how your nonprofit can gain access to their expert HR staff here.
August 26, 2014

Think You’re Ready to Hire More Employees? Read This First.

Your organization has been doing really well lately, and you’re looking to create new positions and hire new employees to help fulfill your mission. You’ve written the job descriptions, gotten approval from all of the relevant stakeholders and are ready to begin recruitment.

But slow down just a minute. Are you sure your organization is ready to hire more employees?

Although only your organization can determine if you’re actually ready to hire new employees, Inc. recommends answering the following questions about your organization, where you want it to go, and what is happening now.

What kind of organizational structure do you want?

Do you want your organization to grow extensively? Are you pretty happy with the size it is now, but unable to meet the demands of your mission with your current staff, or are you hoping to grow organically whenever the need arises?

Will you be able to slow down growth if you need to?

Not all organizations have significant control over how much growth they will experience in any given time. For instance, if your organization helps provide disaster relief to a specific area and the area suddenly experiences a large-scale disaster, your response must be immediate and decisive. Or, if your organization helps animals and takes part in a multi-county animal seizure, you must be able to provide shelter and care for all of the animals involved for the foreseeable future.

But if your organization works to help a select group of impoverished students succeed, it’s reasonable to expect that there will not be an unmanageable influx of students to your program in any given year.

Do you really need help?

Do any of your employees have extra time throughout their week or month that can be used to address some of the needs that you’d like to hire new employees for? If so, can these employees be trained to perform some of the needed tasks?

While it might not fully address your needs, it would cut down on organizational waste and potentially allow for a part-time position to be created in lieu of the more expensive full-time position.

Are you fully prepared to recruit, hire, and train more employees?

Our ThinkHR resources and your UST Customer Service Representative can help you ensure your organization is best positioned to do all three without exposing you to excess liability in the future.

Not yet a member? Learn more about the UST program here.
August 20, 2014

Is Your Nonprofit Falling Prey to These 5 Common Myths?

The Unemployment Services Trust recently released its newest whitepaper, “The 5 Myths That Are Increasing Your Nonprofit’s HR Costs” – which explains how to identify and debunk these costly myths at your organization.

For a limited time, you can download the whitepaper for free and find out:
 
  1. Which myths might be hurting your organization
  2. How you can proactively reduce HR costs
  3. Whether you are overpaying for unemployment claims


Learn the secrets of other nonprofit executives and HR staff who have reduced their human resource and unemployment claims costs. Download your complimentary copy of 5 Myths That Are Increasing Your Nonprofit’s HR Costs today.

By providing exclusive access to such cost saving resources, UST aims to educate 501(c)(3) organizations on the latest HR best practices and compliance laws—living up to its mission of “Saving money for nonprofits in order to advance their missions.”

Fill out a complimentary Savings Evaluation to find out if you can save with UST.
August 14, 2014

How an Effective Hiring Team can Recruit Top-Notch Employees

The hiring process can be daunting, time-consuming, and burdensome. For nonprofits especially, hiring the best-fit employee the first time around is vital. Often working with a limited budget and smaller staff size, nonprofit organizations must find a candidate that can quickly adapt and effectively work towards mission advancement objectives.

But how do you find the right employee? Simple. Recruit a hiring team internally before recruiting any potential staff.

The hiring team you assemble should be your recruitment backbone—helping you create the hiring timeline, outline specific role responsibilities, and conduct interviews.

Here are 6 tips to keep in mind when creating and working with your recruitment team:
  1. Select relevant team members—Pick people who have past experience with the incoming employee’s job role, as well as those who will be working with them directly. In general, the larger the organization, the more hiring team members you’ll need.
  2. Assign individual responsibilities—Decide which members are in charge of drafting the job description, advertising the job opening, organizing resumes, interviewing, making the final decision, etc.
  3. Identify current strengths and weaknesses—As a team, identify what your organization’s strategic goals are. What are your employees doing right? Where is there room for improvement?
  4. Decide what skills will address knowledge gaps—Once your hiring team decides what skill gaps exist within your nonprofit, list the specific tasks the new hire will be responsible for. Being honest about your nonprofit’s needs will make it easier when it’s time to write the job description/requirements.
  5. Create a timeline—Create a detailed schedule that maps out your entire hiring process. This should give deadlines for the job description, job promotional efforts, candidate interviews, and the final decision.
  6. Encourage open communication—Maintaining an open dialogue with your recruiting staff will not only build trust, but also lower the risk of making the wrong hiring decision. Listening to both positive and negative feedback can only strengthen future hiring endeavors.


Having the support of a dedicated hiring team can help speed up the hiring process, while increasing efficiency. Knowing when and how to engage your hiring staff can help you identify the best possible candidate for any potential position—giving your nonprofit the edge it needs accomplish mission objectives.

Learn more about how to select and utilize your recruitment team here.
August 08, 2014

Congratulations to the Nonprofits Honored as a Part of The Nonprofit Times Power & Influence Top 50

The 17th annual catalog of The Nonprofit Times Power & Influence Top 50 shows an increased emphasis on the effective implementation of a more civil society. Those elected for the honor “illustrates the power of people pushing society for equal access and opportunity…[as] recently it seems that the insistence for inclusion has need ratcheting up and sector leaders have responded.”

Everyone at UST wou

 

ld like to extend our heartfelt congratulations to those included. We’d also like to thank all of the organizations that we work with for continuing to fight the good fight and make a difference for those around them.

See the full list of innovators being recognized by this years’ Power & Influence Top 50 here.

 

August 07, 2014

Spotlight on New Jersey: Reducing Improper Payments and Unemployment Benefit Collection Fraud

For the better part of the past decade, improper and fraudulent unemployment insurance collections have accounted for about 10 percent of all unemployment benefits paid to jobless workers across the U.S. During the most recent Recession, it became abundantly clear why states must cut down on SUI (state unemployment insurance) fraud.

Unfortunately, for many states, the realization came a little too late.

During the height of the Recession, almost 40 states borrowed a combined $50 billion from the Federal Unemployment Trust Administration (FUTA) to continue providing jobless benefits. This much debt required many states to make long-term changes to their unemployment systems by either charging penalties or fees to businesses or by cutting jobless benefits. Many made historic cuts to the number of weeks of aid available, but some—like New Jersey which racked up more than $1.5 billion in debt—took a long, hard look at the administration of their trust.

In New Jersey that long, hard look at the administration of their unemployment trust fund resulted in some spectacular results. Over the past four years New Jersey has identified more than 300,000 people who tried to wrongly collect benefits through identity theft, failure to report a new job, schemes, and honest mistakes. Also:
 
  • The state has stopped borrowing from the federal government to cover its unemployment benefit costs
  • Their trust fund is once again considered solvent
  • They were able to extend a tax cut to New Jersey businesses because of the trust fund’s solvency
  • Just $376 million in debt remains from the height of their borrowing


But what did New Jersey do that set them on the path to successfully rebuild their unemployment trust fund?

They updated their system.

Namely, they began using a strategy referred to as ‘identity proofing.’ With the help of LexisNexis, the state of New Jersey requires applicants to verify a wide range of personal information through a quiz on the state labor department’s website. The questions are specifically developed to be ones that the individual who owns an identity could accurately answer.

Then, using the billions of public records that LexisNexis collects, the answers—which range from what kind of car an applicant has, to who lives at their address—help weed out potential frauds.

Less than a year-and-a-half into the effort, more than $4.4 million in improper payments have already been stopped, and almost 650 instances of identity theft have been avoided.

Want to know how well your state is catching improper payments? The U.S. Department of Labor provides this state-by-state breakdown for 2013.

Read more about how New Jersey is fighting improper payments and unemployment fraud here.
August 05, 2014

How to Get Your Employees on Board with Organizational Change

Discomfort; insecurity; apprehension; fear. These are just a handful of emotions people experience when plans for organizational change surface in the workplace. The idea of change tends to scare people because they will be forced to step outside of their comfort zones and embrace the unknown.


Altering such negative perceptions surrounding change requires a heavy emphasis on internal solidarity. And since the only way to effectively maintain change is through widespread support from your staff, learning how to acknowledge and address employee feedback is key. Specifically for nonprofits, internal collaboration is vital when it comes finding new ways to advance one’s mission.

Follow these 5 easy steps to create sustainable changes within your nonprofit:
 
  1. Provide the facts and research—Explain what changes you are looking to achieve, and why. Providing the reasons behind your decisions will help your employees view each change as a necessity. In addition, offering the chance to provide feedback will also give your employees a greater sense of control.
  2. Spend extra time educating the leadership team—Because your staff leaders are in charge of teaching and supporting their employees, it’s important to make sure they understand the logic behind every change that is being implemented.
  3. Move from generalizations to specifics—The ease that comes with everyday tasks can make it difficult to alter employees’ common behaviors. Identifying your employees’ shared behaviors and habits will help you focus on what needs to change within the company culture as a whole.
  4. Embrace the “slow but steady” mentality—In order to create lasting change, recognize that your employees are experiencing a great deal of uncertainty. Allowing your employees to slowly modify their behaviors can help them more readily adjust to ongoing changes.
  5. Share the positive results with everyone—Positive reinforcement is always a great way to preserve change. When they see immediate wins and profit as a direct result of their changes, your employees are likely to stay committed to their changed behaviors.


Change is what keeps nonprofits moving forward. Taking the time to foster cooperation amongst your employees is the easiest way to create lasting change—which provides ongoing opportunity for organizational growth within the nonprofit sector.

Learn more about how to gain employee support for organizational change here.
August 04, 2014

4 Things Your Nonprofit Must Know About Unemployment Insurance

As an unemployment tax alternative for nonprofit organizations, UST fields a wide variety of questions about unemployment claims and unemployment tax options from members and non-members alike. Stemming from this, we have compiled a list of the top 4 things that every nonprofit must know about their unemployment insurance taxes to ensure that the organization is not wasting money.
What is the Unemployment Tax? And how does the unemployment insurance program work?

The Department of Labor (DOL) provides a short overview of the program on their website, and summarizes it by saying: "Unemployment Insurance is a federal-state program jointly financed through Federal and state employer payroll taxes. Generally, employers must pay both state and Federal unemployment taxes...However, some state laws differ from the Federal law and employers should contact their state workforce organizations to learn the exact requirements."

The program itself works to provide jobless workers who have lost their job through no fault of their own with temporary, partial wages while they search for a new position. For more information on how unemployment insurance works, read our more complete overview on the state program.

Is Your Nonprofit Liable?

501(c)(3) nonprofits are exempt from federal unemployment taxes, but may be liable for state contributions if they meet something called the “4 for 20″ provision. This provision is triggered when four or more individuals are employed on the same day for 20 weeks in a calendar year, though not necessarily for consecutive weeks. It is important to note that who is considered “employed” for these purposes is not always straightforward – see Independent Contractors below.

Why Independent Contractors May Still Be Considered Employees

There are different rules and tests used by government organizations to determine independent contractor status, because different organizations are responsible for separate aspects of law. For the purposes of unemployment insurance, the Department of Labor uses something called the “ABC test”, which makes it sound simple, but is more complicated when applied to real situations.

The ABC Test establishes criteria that an work relationship must meet in order to for the services of that individual to not be considered employment. The three parts of the ABC Test relate to employer control/direction of the worker, place(s) of business or courses of business, and proof that the worker is independently established in the trade. A nonprofit may have to pay unemployment taxes even if the IRS or their state revenue services determine that, for income tax purposes, individuals may be independent contractors.

Cost-Saving Alternatives

The Unemployment Services Trust (UST) provides an alternative to paying into the state unemployment tax system, and can be a cost-saving option for nonprofits with more than 10 employees. Through UST, organizations directly reimburse the state only for the claims of their former employees, rather than paying the state unemployment insurance tax which covers all employers throughout the states.

And, because keeping unemployment costs low is vital to so many organizations across the U.S., we've added state-by-state information for taxable wage bases from the Department of Labor so you can see where your organization falls on the tax scale.

We encourage nonprofits to be proactive in learning what their options are, and what types of unemployment tax alternatives best suit their needs. Complete a complimentary Savings Evaluation to see if your organization could save money on its unemployment costs.
  This post does not constitute official or legal advice. A version of this article originally appeared on blog.nonprofitmaine.org by Molly O'Connell.
July 24, 2014

Budget Today, Succeed Tomorrow

Nonprofits are constantly looking for new ways to develop and achieve their mission-driven objectives. Unfortunately for smaller organizations, big aspirations aren’t generally matched by a big budget. So how can nonprofits manage financial restraints while also maximizing organizational sustainability?

Taking the time to plan out one’s budget, on a more consistent basis, can help an organization better identify, prioritize, and build towards their goals. To create an effective budget, follow these 6 simple steps:
 
  1. Build a Budget Committee—Committee members should be familiar with budget and goal history, as well as future objectives. The committee often includes the Board Treasurer, CFO, Executive Director, and other finance-oriented positions.
  2. Create Deadlines—Pinpoint the deadline for final approval, as well as mini-deadlines leading up to it. Delegate tasks to each committee member to ensure that everything is accomplished in an efficient manner
  3. Analyze Last Year’s Budget Do’s and Don’ts—Look for patterns in past budget fluctuations and identify potentially unrealistic goals. Which budget items were allocated too much/too little money? How have goal priorities shifted this year?
  4. Draft a Budget Structure and Timeline— Map out target goal dates for each objective, as well as their individually estimated costs. Don’t forget to include a reserve for miscellaneous expenses and potential emergencies.
  5. Present Budget to the Board—Because the Board often must approve the final budget, allow additional time for feedback and questions.
  6. Review Throughout the Year—After everything is finalized, continue to track your budget’s progress throughout the year. Comparing the estimated costs with your actual expenses will help determine the overall soundness of your budget.


In order to grow within the nonprofit sector, organizations must learn how to construct and abide by their determined budgets. Serving as a roadmap to achieving annual objectives, a well thought out budget can help nonprofits succeed without sacrificing excess funds.

Learn more about the importance of nonprofit budget planning here.
July 17, 2014

Do Teams Trump Individuals?

A few years ago a social researcher invited a group of 50 or so participants to enter a room full of balloons, find the balloon with their name written on it, and sit down before 5 minutes passed. The scene was chaotic. Not surprisingly, none of the participants were sitting down at the 5 minute mark.

The speaker then asked the participants to perform the search again as a collaborative group. He suggested they each pick up one balloon and find the owner of that balloon.

If you haven’t already heard about the study findings, which recently began to go viral, all of the participants were sitting down, with their unique balloon, well before the 5 minute mark.

For the past couple of decades, researchers have been performing live social experiments like this one to illustrate the power of teamwork and collaborative effort. Out of this body of work has come some pretty powerful information that can improve your organization—and it’s collaborative results—if used well.

Not least among the information sets that have been discovered, is the fact that companies that have the best collaborative teams are 10 times more likely to reach high financial goals as those who don’t. So what is it that makes the best teams?

According to MIT researchers, the best teams:
 
  • Are socially responsive to one another and pick up on one another’s cues and body language,
  • Collaborate and contribute more or less equally,
  • Operate in a climate of safety that encourages creativity and out-of-the-box thinking, and
  • Provide candid feedback to one another.


If you’re team is not performing as well as you would like them to, or if your team is fairly homogenous—which researchers have repeatedly found discourages a healthy level of creativity— this article from the Society of Human Resources Management (SHRM) suggests appointing someone within your team to play devil’s advocate.

Other suggestions to improve the collaborative working environment within your team include:
 
  • Anticipate conflicts and set down guidelines for how your team will handle them
  • Encourage your team to socialize outside of work—it’s a shortcut to improving collaboration and allowing teams to become more socially responsive to one another
  • Recognize, reward, and celebrate collaborative behavior
  • Think systematically, but make innovation of the utmost concern
  • Let those who benefit from your organization weigh in from time to time
July 08, 2014

Nonprofits Slated to Receive More than $8.7M in Cash Back this Year from UST

Over the next several weeks 521 current participants in the Unemployment Services Trust (UST) will receive a combined $8,762,873 in cash back.

Over the next several weeks 521 nonprofit members of the Unemployment Services Trust (UST) will receive a combined $8,762,873 in cash back. In total this brings participant savings over the past year to more than $43 million in claims savings, audited state returns, and cash back.

“One of the most exciting times of the year at UST is when we get to tell members that they will be receiving money back,” said Donna Groh, Executive Director of UST. “For members that elect to take the cash back as a check this money often helps them expand important initiatives. And, learning the exact impact that each dollar we’re able to save, and return, to nonprofit employers helps motivate us to find even more ways to lower unemployment costs across the board for our members.”

The UST program, which helps nonprofits with 10 or more employees control unemployment-related HR costs, includes an annual review of its 2,000+ nonprofit accounts–using an advanced actuarial model. Unlike the state unemployment tax system or some private insurance where taxes and premiums cannot be refunded (even when benefits paid out are far below what the employer paid in), UST instead allows for cash back when an organization has a positive unemployment claim experience.

UST members whose claims were lower than anticipated, and that are well-funded for future claims, will receive a direct refund or credit to their nonprofit organization.

“Hearing the individual stories about what members plan to do with their cash back is extremely rewarding, and allows us to better emphasize the mission-driven impact of becoming part of the UST program,” seconded Adam Thorn, Director of Operations.

By aiming to ensure that a nonprofit is properly reserved for unemployment claims costs, but not holding excess funds beyond the necessary cushion for future claims, UST helps serve its mission of “Saving money for nonprofits in order to advance their missions.”

To learn more about the UST program for 501(c)(3) employers, visit www.ChooseUST.org or call (888) 249-4788 to speak with an Unemployment Cost Advisor.

About UST: Founded by nonprofits, for nonprofits, UST is the largest unemployment trust in the nation, providing nonprofit organizations with 10 or more employees a safe, cost-effective alternative to paying state unemployment taxes. UST has partnered with 80 state and national nonprofit-based associations to teach their members about their unemployment insurance alternatives. Visit www.ChooseUST.org to learn more.
July 03, 2014

How HR Departments Impact the Nonprofit Sector

For most nonprofits, sticking to a smaller budget makes it harder to allocate the necessary time and resources needed to maintain an effective HR department. Responsible for salaries, training, recruitment and paperwork, your HR staff greatly influences your organization’s potential growth.

 

XpertHR and Nonprofit HR conducted a 2014 survey of Senior HR professionals to reveal the way nonprofit HR departments are constructed and held accountable. Representing 260 organizations throughout the US and Canada, the results showcase the importance of measuring and documenting an HR department’s effectiveness.

According to the survey, just over 1/3 of organizations reported documenting an official HR strategy. And with nearly 40% of HR professionals failing to measure their department’s effectiveness, many nonprofits have trouble building upon their HR best practices.

In addition to sustaining an effective HR department, nonprofits are also burdened by a limited HR budget. Taking the cost of HR salaries, recruitment, and administration into account, the median cost of running an HR department is reported at $91,715.

In order to alleviate financial HR costs, UST offers its members exclusive access to ThinkHR, a value added service that provides HR professionals with expert advice and support tools. This service includes a live HR Hotline, an online HR library, and over 200 employee training courses. Learning how to outsource and prioritize your organization’s HR needs can save you money—money that can be put towards mission advancement and further HR staff development.

Learn more about how your nonprofit can gain access to ThinkHR’s expert HR staff here.
June 27, 2014

The Importance of Operating Reserves

The very idea of a for-profit company existing without a reserve operating budget would send investors running for the hills. So why is it that there is so much pressure on nonprofit organizations to scrape by without even a hint of a reserve operating budget?

Despite the pressure to constantly face their imminent demise, the smartest nonprofits—the ones that are best positioned to make a long-term impact on their mission—carefully build and manage a healthy operating fund, as well as an ample operating reserve fund. By protecting their organizational finances against sudden or dramatic cash flow changes, these organizations can continue to provide services in the toughest times.

Having a healthy operating budget provides your nonprofit with a more solid base by setting aside unrestricted net asset balances and investing them in the organization’s programs. The greater this reserve, the greater your organization’s ability to grow current programs and promote your mission.

The operating reserve portion—the portion set aside for emergencies and unforeseen circumstances that negatively affect your financial operations—protects your employees and your mission in the direst of circumstances.

Unfortunately, there isn’t one set benchmark for how much money a healthy nonprofit should have set aside as an operating reserve budget.
 

To help your organization determine a healthy reserve fund, we’ve gathered the following resources from across the web.



The Importance of Operating Reserves for Nonprofits- Read the article here.

Nonprofit Operating Reserves and Policy Examples- Visit the webpage here.

Maintaining Nonprofit Operating Reserves- Download the whitepaper here.

Reserves Planning: A step-by-step approach for nonprofit organizations- Download the whitepaper here.
 

For more information on strong financial management for your nonprofit, we suggest these resources.



Budgeting “Best Practice” Tips for Nonprofits- Download the PDF here.

Financial Management- Visit the National Council of Nonprofits financial management resource list here.
June 18, 2014

UST and Alliance for Children and Families help Members Save Money on UI Costs

The Unemployment Services Trust (UST) is pleased to announce its newest affinity partnership with the Alliance for Children and Families (the Alliance). The Alliance, a national nonprofit organization, has chosen to join forces with UST in order to help its members reduce operating costs and direct more unrestricted funding toward realizing their missions.

This newest partnership will allow U.S. based organizations with a 501(c)(3) tax designation to more effectively take advantage of the federal law that allows nonprofits to opt out of the state unemployment tax system. By paying only the dollar-for-dollar cost of unemployment benefits paid to former employees, organizations that join UST lower their average claims cost to just $2,287 per claim versus the national average of $5,174 per claim.

“The ultimate goal of each and every nonprofit association that we work with is to provide their members with the best opportunities to advance their missions. By combining the power of hundreds, and sometimes even thousands, of smaller nonprofits, associations are able to get better money saving tools customized for their members,” said Donna Groh, Executive Director of UST.

“Last year we found more than $3.5 million in tax savings for nonprofits that came to us through our association partnerships. This year we want to double that and find at least $7 million in tax savings for our affinity partners’ member organizations.”

About the Alliance for Children and Families: The Alliance is a national organization dedicated to achieving a vision of a healthy society and strong communities for all children, adults, and families. The Alliance works for transformational change by representing and supporting its network of hundreds of nonprofit human serving organizations across North America as they translate knowledge into best practices that improve their communities. Working with and through its member network on leadership and advocacy, the Alliance strives to achieve high impact by reducing the number of people living in poverty; increasing the number of people with opportunities to live healthy lives; and increasing the number of people with access to educational and employment success. For more information, visit Alliance1.org. About UST: Founded by nonprofits, for nonprofits, UST is the largest unemployment trust in the nation, providing nonprofit organizations with 10 or more employees a safe, cost-effective alternative to paying state unemployment taxes. UST has partnered with 80 state and national nonprofit-based associations to teach their members about their unemployment insurance alternatives. Visit www.ChooseUST.org to learn more.
June 09, 2014

Seeing Voluntary Turnover as an Opportunity for Improvement

Last year 48 million Americans across all sectors left their jobs.

For large organizations, or organizations that expect high turnover year-over-year, that number may not be particularly compelling. But for organizations in which high turnover is a sign of a bigger problem, this kind of turnover needs to be looked at as an opportunity for improvement.

Looking more closely at the reasons for separation, nearly 60% of all turnover last year was voluntary. And—including both voluntary and involuntary separation data—about 40% of separations happened when the employee had been in the position less than 6 months.

The cost of turnover can be monumental.

Even for employees that have only recently joined the organization, the cost of replacing them can be mind boggling.

Consider this: the average cost of turnover is typically reported between 15 and 21% of the employee’s salary. But the ‘actual cost’ consists of the time and resources that are spent recruiting and hiring a replacement, greater demands on other employees to pick up the slack (which could lead to burn out and more employee openings), the need to train and develop the new employee, and potentially lost revenue and opportunities.

To stay competitive and to reduce the amount of voluntary turnover as efficiently and effectively as possible, it’s time for employers to dust off their research skills and learn more about what factors are encouraging employees to leave your organization.

Conduct exit interviews, and find out why employees are leaving your organization. Dig deep into the reasons that employees are leaving—is there a toxic employee rotting the rest of their department? Is the amount of work incongruent with the amount of pay? Are poor benefits or strict working hours causing employees to look elsewhere?

Once definitive information has been collected and examined, take the time to address it throughout the organization. Make changes where necessary. And if changes can’t occur, for instance if better benefits are too hard to provide, look for opportunities to become more flexible with employees.

The savings will quickly add up.

Read more about how to see voluntary turnover as an opportunity here.
June 05, 2014

96% of Members Would Recommend the UST Program to their Nonprofit Peers as a Valuable Cost-Saving Opportunity

In a recent member-wide survey, it was revealed that 96 percent of UST participants would recommend the Unemployment Services Trust to their peers as a cost and time saving opportunity.


The Unemployment Services Trust (UST) is proud to announce that 96 percent of current participants would recommend the program as a valuable cost-saving opportunity for nonprofits. UST credits the improvement over last year’s 93 percent recommendation rate to an intense focus on the overall member experience and greater attentiveness to members’ needs.

“From the very beginning, the UST program was designed to support nonprofits by reducing the time and cost associated with managing an unemployment claim,” said Donna Groh, Executive Director. “To have found that our members would overwhelmingly recommend our service to other nonprofits is extremely rewarding.”

“We’ve worked hard to improve our customer service model and increase the quality of interactions that our customer service team has with our current members over the past year,” said Adam Thorn, Director of Operations. “By incorporating best practices and higher customer service standards, we have been able to  support more in-depth interactions with our members, whether that means providing more detailed responses to questions or better educating organizations about the benefits of reimbursing for unemployment claims versus paying taxes.”

“On the heels of this increase in customer service standards was the increase in direct savings that our members experienced last year as well,” said Groh in reference to mitigated unemployment claims costs and cash back to participants.

Last year, UST was able to help members mitigate $32,598,054 in unemployment claims through best-in-class claims management. The same claims management services allowed UST to return an additional $1.7 million of charges made in error by state unemployment offices, which were audited by UST and credited back to the individual organizations.

Select participants also received $11,041,738 in cash back after their reserve accounts were reviewed for positive claims experience.

 
May 27, 2014

Meet US(T) Mondays- Laurie

Having recently joined UST as an Account Manager, Laurie is thrilled about working with nonprofits and helping them save money.

Her drive and passion to spread awareness within the community makes her a great fit for the UST team. Laurie explains, “I am not doing any volunteer work currently, but when my father passed away from cancer 10 years ago, one of the ways I got through it was to get involved with the American Cancer Society’s Relay for Life fundraisers in Ventura.”

Outside of the office, Laurie and her husband are adjusting to life as newfound puppy parents. They’re rescue puppy, Watson, is a Dachshund/Corgi mix and makes a wonderful addition to their household.

When given the opportunity, Laurie can’t resist the tranquility of nature. “Camping is probably my favorite thing to do and my husband and I go at least twice a year – sometimes more,” she says. “My favorite camping trip was years ago with my sister and some friends and we went on a 50 mile (2 ½ day) river rafting trip on the Colorado River from Grand Junction, CO to Moab, UT…definitely one of the best trips I’ve ever been on!”

In addition to being a dog lover and camping enthusiast, Laurie likes to let loose with a little help from her buddy, Bruce. If her life was a TV show, Laurie would select Growin’ Up by Bruce Springsteen as a theme song that played every time she walked into a room. “This represents the music I grew up with and sometimes I don’t think I’m finished growing up.”

Are you a fan of Bruce Springsteen too? Tell Laurie about it @USTTrust with the hashtag #MeetUSTMondays!
May 22, 2014

The Headaches of Applying for & Receiving Grant Money

If your organization is dependent on government contract pay or grant pay, chances are you already know all about the headaches that come with actually getting that money. But two separate studies released in May by the Urban Institute and the National Council of Nonprofits shed light on how bad the situation really is.

Highlighting the biggest problems that the delays in funding create, including reducing and/or putting staff pay on hold, the reports aim to introduce public policy proposals that would streamline the contracting process.

Some of the top findings from the survey included identifying the primary places and reasons contract payment is delayed and that:
 
  • 72% of nonprofits feel that the government reporting process is time-consuming and complex
  • 44% of nonprofit organizations have experienced changes to a grant or contract midstream
  • 45% of groups had experienced late payments which caused 42% of those groups to draw on their reserve funds, forced 14% to reduce the number of people they served and just over 1/2 to reduce or freeze employees salaries

Read more about the summary findings here.

Read the full study by the National Council of Nonprofits here. And read the full Urban Institute study here.
May 21, 2014

How the State Unemployment Trust Fund Debt is Affecting Your Organization

With unemployment across the nation leveling out compared to recent years, you might be wondering, why would it matter for employers now?

Since the Great Recession took its initial toll on the state unemployment insurance (UI) funds, states across the U.S. have gone into considerable debt in order to provide benefits for millions of unemployed. Trying to combat unemployment costs while restoring their debt with the federal government, many states look towards alternative measures to repair their financial foundations.

In 2011, states accumulated a debt of over $47 billion owed to the federal government– the peak of the United States’ economic deficit. While the federal debt has since decreased, with 16 states still owing over $21 billion at the beginning of 2014, a lot of states took out private loans to avoid an automatic increase in their federal unemployment tax on employers.

With a low UI trust fund balance, many states have been forced to cut their unemployment benefits, rather than borrowing additional money from the government. Other alternative methods used to reach state solvency include:
 
  • higher tax rates on employers,
  • a short-term unemployment benefits system,
  • and private bond market loans
Such actions were meant to diminish volatility and recover sensibly from the impact of the debt.

While the states have steadily reduced the debts triggered by the Great Recession, the U.S. has a long way to go before they achieve full economic restoration. And employers will continue to see their overall cost of unemployment steadily rising, if their state is to both recover and prepare for the next downturn.

To see how your state unemployment insurance trust fund debt compares to other states, view Stateline’s chart here.

Learn more about how the U.S. is affected by the unemployment trust fund debt here.
May 16, 2014

U.S. DOL Releases UI Solvency Report

On May 13th the U.S. Department of Labor (DOL) released its UI Solvency Report, which reports on the relative solvency of each state UI trust fund in comparison to other states based on suggested standards.

An analysis by UWC- Strategic Services on Unemployment & Workers’ Compensation reveals that a number of states have state UI trust funds that are so insolvent they are unlikely to recover before the next recession. For employers in these states (listed below) it can be expected that state and/or FUTA tax rates will continue to rise with longer term restrictions being imposed on benefit increases alongside enhanced integrity efforts.

While some states have elected not to maintain a large trust fund balance and are relying on “just in time” supplemental funds to assure their solvency, many are using bonds to supplement UI taxes and remain strained.

States not meeting the 0.5 Average High Cost Multiple threshold as of December 31, 2013 include:

Alabama, Arkansas, Arizona, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virgin Islands, Virginia, Wisconsin, West Virginia

States that do not meet the DOL recommended levels but have average High Cost Multiples of 0.5 or more include:

Colorado, DC, Hawaii, Maryland, Maine, Michigan, Minnesota, Puerto Rico, Vermont

States that have solvent UI trust fund balances according to the US DOL 1.0 Average High Cost Multiple formula include:

Alaska, Iowa, Idaho, Louisiana, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, Oklahoma, Oregon, South Dakota, Utah, Washington, Wyoming
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