• Nonprofits face several challenges to their success, the most prominent of which are a lack of budget, complex liability issues, and a lack of experienced HR professionals..
  • Professional employer organizations (PEOs) are HR partners who help nonprofit and for-profit organizations with all HR-related issues, especially those that are most challenging for nonprofits to handle on their own.
  • When your nonprofit partners with a PEO, you unlock the ability to offer more robust employee benefits to help attract and retain top talent; you also get on-call expertise in compliance issues related to your industry.
  • This article is for leaders of nonprofit organizations who are trying to decide if it’s best to continue running their HR function themselves or if they should outsource it to a PEO.

As the leader of a nonprofit organization, your mission is everything to you. Anything that takes you away from the work you do to fulfill that mission is a distraction—like handling the details of HR and compliance issues. That’s why you should consider hiring a PEO (professional employer organization) for your nonprofit.

This article identifies three common challenges nonprofits experience and how partnering with a PEO can help you overcome them—and get you back to working on your mission.

Anything that takes you away from the work you do to fulfill your nonprofit's mission can feel like a distraction—including handling the details of HR and compliance issues. Click To Tweet

3 Significant HR-Related Challenges Nonprofits Face

As a nonprofit, your goals, and your structure, are a little different than those of a corporate entity. This can lead to challenges when it comes to compliance and human resource management.

1. A Lack Of Experienced HR Professionals

Few nonprofits employ a full-time HR expert, which means they have a lack of expertise in this area. This inexperience is quantified by the many hours members of the organization must devote to tasks that take them away from their mission. Ultimately, this leads to less good being done because non-negotiable tasks must be done. That’s where PEO expertise becomes invaluable.

2. Working With A Limited Budget

Most nonprofit organizations have a fixed budget to work with. That makes it difficult to find cost-appropriate insurance plans that also provide the benefits employees want and need. Also, small and medium-size nonprofits may not be able to afford the same plans as larger organizations.

3. The Complexity Of Liability Issues

One challenge we hear repeatedly from nonprofits is that their executive team, governing body, board, etc. does not have the knowledge (despite their experience in other areas) to understand liability issues in HR; they also may not be aware of all the ways in which they must tackle issues of compliance related to employees. Compliance is important for nonprofits. If missteps are made, they could lose the grants and funding that keep their doors open.

How A PEO Helps Your Nonprofit Overcome Those Challenges

Thankfully, leaders have an option for dealing with the budget, expertise, and liability issues their nonprofits face: professional employer organizations (PEOs). Here are six ways partnering with a PEO helps your nonprofit:

1. You get expertise in compliance issues.

When you partner with a PEO like GenesisHR, we advise you in areas of compliance so you don’t have to figure out tricky regulatory issues alone. We know you can’t afford to have any missteps. If you’re operating on grants, for example, your grant application must show you’re an employer in good standing, and that you meet all state and federal requirements for a company your size.

Frankly, some nonprofits don’t have the knowledge to handle compliance issues alone, and providing incorrect answers to these questions can be a liability. That’s when it’s imperative to have a PEO partner who is expertly mindful of compliance challenges and can advise you. At GenesisHR, we help our nonprofit clients by creating and establishing handbooks that cover required policies, addressing compliance issues, and clearly mapping out the information that needs to be communicated to employees.

Looking for a nonprofit employee handbook template you can use to create your own? Download ours today.

2. You can offer more robust benefits to your employees.

When your nonprofit partners with a PEO it becomes more competitive with larger companies. At GenesisHR, we give nonprofits access to a portfolio of benefits they could not get on their own—Fortune 500 benefits, health insurance, and more choices, which evens the playing field and allows you to attract better talent. Read more about the benefits packages and insurance offerings you could get if you partner with GenesisHR.

3. You can devote more time to your cause.

With the help of a PEO, you will spend less time on things that don’t contribute to the mission of your nonprofit, freeing up time to spend working toward your goals. And you’ll have peace of mind when you choose a PEO like GenesisHR—we’re ESAC accredited and an IRS Certified PEO, which is proof we take compliance seriously. We undergo a major audit each quarter that keeps us in good standing. This type of accountability is something your board of directors shouldn’t overlook. Learn more about how being a Certified Professional Employer Organization sets us apart from other PEOs.

4. You stay in control of your organization.

Don’t worry that you will no longer be the decision-maker of your nonprofit if you partner with a PEO. In a co-employment relationship with a PEO like GenesisHR, both organizations have a contractual allocation and sharing of employer responsibilities. In plain English, that means the PEO legally assumes some of the administrative burden and liability of being an employer, which allows you to have a sharper focus on your business. (Learn more here: What is co-employment and what is not?)

Two More Advantages of Choosing GenesisHR As Your PEO

5. You get a relationship-focused team that gets the job done.

Many of our clients note that one distinct advantage of choosing GenesisHR is the relationship-focused service we offer. They like that we are people you can get in touch with quickly. And it’s true! To us, you’re not strangers or a client number: We know you and you know us, which allows us to take a personalized approach to meeting your needs.

6. With GenesisHR, you get a PEO partner who values community as much as you do.

At GenesisHR, we care about our community as much as you do about yours. We’re active supporters of our region; we’ve even established an annual event that raises funds for our neighbors. Our desire to have a positive impact makes us good potential partners—and speaks to our integrity-based approach to HR management.

A Real-World Nonprofit/PEO Case Study: Scandinavian Living & GenesisHR

Scandinavian Living Center

As a small nonprofit organization, Scandinavian Living Center couldn’t afford to hire and staff an entire human resource department. But, because of complex compliance regulations, the organization needed a team of experts who could handle everything from citizenship issues to HR issues.

By choosing GenesisHR as their PEO partner, Scandinavian Living Center now has the HR department they need—without the hefty price tag of hiring an in-house team. With us, the organization and its employees can always engage with someone who knows their stories and can efficiently provide assistance in working through their issues and questions.

“Genesis gives me the HR department I need—and then some! A simple call and I have expertise on insurance, payroll, and HR issues. It’s an intangible asset to us,” Joe Carella, Scandinavian Living Center Executive Director said.

Ready to learn more?

We’d love to explain how a PEO works and what co-employment could do for your nonprofit organization. Let’s talk about how GenesisHR can help relieve your organization of the burden of HR, payroll, benefits administration, and more.

Download our free PEO ebook