Joining a PEO is a great way for nonprofits to not only save money on operating costs, but to hand off the compliance burden so they can focus on their staff and mission. 

Some nonprofit organizations worry that the logistics of partnering with a PEO (particularly payroll being reported under a different FEIN) could impact their ability to receive grant funding. Every nonprofit has a cognizant agent/agency, which is where most of the organization’s funding comes from. Nonprofits should check with their cognizant agency to make sure processing payroll under another FEIN won’t be an issue, but our team has been unable to locate any situations where this would be a roadblock for funding. 

Nonprofit agencies have a lot to gain from working with a PEO. Since many of these organizations are operating on a shoestring budget and staff, compliance issues can either be backburnered or done incorrectly because of staffing and skill set limitations. Even things like payroll and employment taxes can be intimidating for a team whose mission is to fulfill a need in their community – not to be payroll experts. Partnering with a PEO takes payroll and the associated headaches off the organization’s plate, and they can also help with FMLA, unemployment, and HR & safety concerns.  

In addition to offloading work, there’s also the big advantage of savings. A PEO that is self-insured for workers’ compensation can help nonprofits save 20-40% on workers’ comp (Ohio BWC) premiums, and lower other overhead costs. Nonprofits tend not to be large operations and may not have the buying power of larger employers. Sometimes this results in being overcharged by payroll processing companies, simply because it’s a smaller account. 

If your nonprofit has difficulty dedicating enough time to their core mission because of administrative tasks and compliance, partnering with a Professional Employer Organization could be worth exploring. 
This article does a great job spelling out some of the advantages in nonprofit organizations working with PEOs. Keep in mind that since it’s authored by a national organization, only national PEOs are mentioned. SuretyHR, a PEO that belongs to the Spooner Risk Control family of companies, is exclusive to Ohio. Our state’s workers’ compensation system and employment laws are very unique, and we focus on helping Ohio employers navigate those obstacles.  If you'd like to speak  with someone directly about how SuretyHR can help your nonprofit, call us at 440-249-5203 or complete this form on the SuretyHR website.