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Rethinking Benefits For Your Nonprofit Or NGO Employees

Should your desire to work towards a good cause cut into your PTO, health insurance, or even salary?

7Jul

When it comes to job seeking, benefits can be a big factor in a final decision. If your heart is set on working for a nonprofit, you might feel a little worried at not only the organization’s salary ceiling but also the benefits they can offer. Having competitive benefits package can be a good way to pull in new talent and also to heighten employee retention.

According to the National Council of Nonprofits, the best way to offer good benefits to your employees is by reviewing the 'comparability data.' This is the salary and benefits information from other nonprofits in the same or similar geographic areas that have a similar budget and mission focus to your organization. Some state associations for nonprofits will collect salary and benefit information via surveys and will offer this data freely to members of these associations.

For many nonprofits, offering a traditional group health plan may not be cost effective for the organization or for the employees. Many nonprofits have been turning toward a defined contribution strategy paired with individual health insurance. This tactic can provide employees with excellent health benefits without nonprofits bearing the cost or risk that can be associated with the traditional health insurance plans.

A defined contribution is a type of retirement savings plan where the amount of the employer’s annual contribution is specified, such as a 401(k). This is different form a pension plan where the employer outlines and specific the benefit (this is also called a defined benefit.) A nonprofit will implement a Section 105 Medical Reimbursement Plan to give employees a monthly fixed healthcare allowance to spend on their own individual health plan. Employees will then select and purchase an individual or family health plan of their own choice. Employees can purchase the plan through a broker, state Health Insurance Marketplace or directly from a health insurance company. After this, the nonprofit organization will reimburse the employees up to the amount outlined in their defined contribution allowance.

Of course, this isn’t the only way to think out of the box with offering your employees a good benefits package. Get your employees in on the development process and also be sure to make sure that whatever you decide to go with will work with your company’s culture. Benefits don’t just include health and life insurance plans, they can also include other kinds of compensation like throwing parties, birthday gifts, and other bonuses. Try revisiting time-off and work arrangement policies. Flexible work plans like a 4-day week or even offering working from home was ranked as the most important non-salary benefits in a 2008 study by Commongood Careers. These benefits actually ranked above the traditional benefits of dental, vision, and even performance bonuses.

Other alternatives out there include a Flexible Spending Account (FSA) or avoiding matching—meaning that you match up to five percent of each employee’s salary. These annual costs can reach up to five or six digits annually, which can be pretty weighty for even an average-sized organization.

Another great option for making sure your employees get a good benefits package is by working directly with larger health insurance agencies. Working with a benefits broker can actually be free as they will be compensated by the insurance company. A trained and certified broker will be able to compare plans for you at one provider against competitive companies in the same market. Through this, you can easily negotiate with one company against another.

There are several different resources out there that will give you good tips to help you rethink benefits for your employees. Rethinking your benefits will definitely heighten your employee retention rate and will also just help your employees be happier overall.

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