A benefit that pays back: Financial planning for your peopleMary Bear Hughes
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When we set up our recent panel discussion on Financial Planning for the Nonprofit Professional with COUNTRY Financial, we knew the proposition would touch a chord with many: a conversation exploring how financial planning benefits can play an important role in retention planning, specific planning tools available, and the finance questions on attendees’ minds. But even we were surprised when registration nearly doubled our 40-person design!
It isn’t hard to understand the enthusiasm for personal financial planning advice among our audience of nonprofit pros: We all need a way to offset the well-accepted (but still uncomfortable) fact that nonprofit salaries trail those in other industries.
And while the pressure on nonprofit budgets (and salaries) only seems to be growing – with declining government support, increasing demand for services, major funders spread thin, and employee benefits getting costlier – unemployment is at just 4 percent (and even lower for certain workers, such as certified nursing assistants). The need to find creative, low-cost ways to retain employees is escalating, and financial planning assistance makes perfect sense: boosting employees’ personal budgets without busting the organization’s.
It shouldn’t have been a surprise then, especially following open enrollment season, to net so many sign-ups. Entering the room for the February event, it was clear our audience felt daunted by growing costs, the burden of finding affordable solutions, and the need to provide raises. Happily, the mood was considerably lighter when they left, equipped with ways to stretch their funds and help those they employ to do the same.
Below are a few of the options for financial planning benefits discussed by our panel, which featured Urban League of Greater Atlanta CEO Nancy Flake, Annandale Village Chief Financial Officer Laura Gourley, COUNTRY Senior Financial Security Consultant Tom Royer, and myself, a leadership development consultant. Each idea creates value for employees and demonstrates to them that the organization cares about their future; they may also save money for both employees and employers; and some are even cost-free for the organization.
Flexible Spending Accounts: Providing this vehicle for employees to set aside money enables them to pay for expenses like child care or elder care with pre-tax dollars.
Health Savings Accounts: By adopting a health insurance plan with a higher deductible, nonprofits and their employees can save significant money on monthly premiums. However, there’s an obvious trade-off: Higher out-of-pocket costs for services. A Health Savings Account is a vehicle for employees to set aside pre-tax money for health care costs. Employers can also contribute to an HSA, sharing savings with employees and possibly even freeing up money for raises.
Loan forgiveness programs: School loan forgiveness for nonprofit employees who remain in the sector for 10 continuous years can be enormously helpful to employees. Keeping tabs on those programs – some of which have been curtailed – and providing workers with up-to-date information about them indicates a clear investment in employees’ financial well-being, which can inspire peace of mind, build loyalty, and encourage retention. Be sure to explore the options particular to your workforce, even if you don’t think your organization qualifies. For instance, you may know that loan forgiveness is available for doctors who practice in rural areas – but you may be surprised by the working definition of “rural,” which frequently includes locations on the edge of major cities. Similar programs are also available for nurses, teachers, social workers, counselors, lawyers, and more.
Mary Bear Hughes is a senior consultant for GCN’s Nonprofit Consulting Group.