Employee Benefits to Offer as a Small Nonprofit

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.

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.

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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