How to Offer Great Non-Profit Benefits Packages to Your Employees in 2025

How to Offer Great Non-Profit Benefits Packages to Your Employees

By offering a thoughtfully designed benefits package, non-profits can attract and retain talent, while driving productivity and growth. However, budget constraints often mean non-profits must be strategic and innovative in crafting benefits that go beyond salary.

So, if you’re looking to offer great benefits for workers in your non-profit, this post contains some tips to help you make the best choice. But, let's start with highlighting some important reasons why nonprofits need to offer great employee benefits to their workers, how the Affordable Care Act (ACA) affects non-profits offering benefits packages, and how to go select the best employee benefits.

Why Nonprofits Should Offer Employee Benefits

The most inspiring reason you should consider offering competitive employee benefits is that it reflects the image of the organization. Every nonprofit organization sets out to make the world a safer, more peaceful, and better place to live in. It only makes sense that your employees are also enjoying the same legacy you're spreading in your local community or as far as your impact extends.

Secondly, the average cost of replacing an employee is high. This means that if an employee leaves, it will not only affect your work temporarily, but the organization might end up spending extra. One of the best ways to ensure your employees remain with you for the long haul is to offer them great employee benefits. This is particularly important if their take-home pay is that great (which is typical of many nonprofit organizations).

Here are some of the common and important employee benefits you need to consider for your non-profit workers:

• Health insurance

• Vacation and paid time off

• Performance bonuses

• Paid sick days

• 401(k) or retirement plan

Benefits like healthcare, free gym membership, paid time off, paternity and maternity leaves, etc., can boost employee morale and even help them achieve better work-life balance.

The Affordable Care Act

Similar to for-profit organizations, non-profits are also bound by the Affordable Care Act when it comes to employee benefits. However, you need to know the details of this to help you make the right decisions. On federal, state, and local levels, specific regulations exist, that every nonprofit needs to stay aware of.

Here are important ACA legislation that affects non-profits operating in the United States:

Non-profit with Fewer than 50 FTEs

If your non-profit has fewer than 50 full-time equivalent employees (FTEs), the ACA does not require you to offer healthcare benefits. However, nonprofits that belong to this category that offer employee benefits receive an incentive for doing so.

For instance, your company may be eligible for the Small Business Health Care Tax Credit if you have fewer than 25 FTEs and pay average annual wages to your employees for the year of less than $50,000 per FTE. Also, you may be eligible if you cover at least 50% of your FTEs health insurance costs.

A full-time employee (FTE) typically works at least 30 hours weekly or 130 hours per month. But also keep in mind that your part-time employees (PTEs) can work the same amount of time as FTEs, which makes keeping track of the hours each employee works very important.

Nonprofits with 50 or More FTEs

If on average, you have 50 or more full-time equivalent employees working for you, then you must provide your full-time workers ACA-compliant healthcare coverage, as provided in the ACA. This means that you must provide medical insurance coverage to your employees or risk paying a penalty.

For federal government minimum healthcare coverage, you must meet certain standards. You can check here for more details on the 2017 Affordable Care Act. Other required benefits to be aware of include unemployment insurance, workers’ compensation, paid sick leave. You may want to confirm with your state or county to determine what is obtainable and what is not.

Considerations When Looking for Great Non-Profit Benefits Packages for Employees

Here are practical ways to structure meaningful benefits packages that support employees and align with your organization’s mission.

1. Prioritize Comprehensive Health Coverage

Non-profits should consider working with providers who offer plans tailored to small organizations and look into programs that fit within their financial constraints. Options might include High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) or offering partial reimbursement for individual health plans. For smaller budgets, covering preventive care or offering mental health support programs can be an invaluable start.

2. Flexible Work Arrangements

Flexibility has become a core benefit for many employees, especially after the shift toward remote work. Offering remote or hybrid work options, flexible hours, or compressed workweeks can greatly enhance job satisfaction while reducing turnover. Flexibility not only empowers employees but may also reduce costs associated with physical office spaces.

3. Professional Development Opportunities

Investing in employees’ growth is a win-win, particularly in non-profits where professional advancement options may be more limited. Offering access to courses, workshops, certifications, or conference attendance can enrich skills and align staff with the organization’s evolving needs. Consider setting up mentorship programs or offering reimbursements for education in fields related to your mission.

4. Retirement Plans and Financial Wellness Support

Retirement benefits are often overlooked in the non-profit sector but these can greatly increase employee satisfaction. While traditional 401(k) or 403(b) plans may be costly, some providers offer low-cost options tailored to non-profits. Additionally, offering financial wellness programs, such as debt counseling or financial planning resources, can equip employees with tools to manage personal finances more confidently.

5. Paid Time Off (PTO) and Sabbaticals

A generous PTO policy can be a differentiator in a non-profit benefits package. Offering paid vacation, sick leave, and mental health days supports work-life balance and prevents burnout. Consider adding a sabbatical option for employees with long tenures, allowing them time to recharge and return with renewed dedication to your mission.

6. Mission-Aligned Perks

Unique, mission-aligned perks can set your benefits package apart while keeping your budget in check. For example, if your non-profit focuses on animal welfare, consider pet insurance or volunteer days with partner organizations. This personal touch can increase employee engagement and give them a stronger sense of connection to your mission.

7. Community and Wellness Programs

Promote wellness with offerings like gym memberships, wellness stipends, or mindfulness apps. Organizing wellness days, team-building activities, or peer-support programs can foster a supportive work culture and improve well-being. Employee Assistance Programs (EAPs) are also valuable, offering resources for mental health, legal advice, and more.

8. Celebrate Employee Contributions

Recognition can be incredibly motivating, especially in non-profits where employees are often driven by a commitment to make a difference. You can celebrate employee achievements regularly through awards, and spotlights. Small tokens of appreciation can also be a meaningful and cost-effective way to recognize dedication and hard work.

9. Family-Friendly Benefits

Family support is essential, particularly for employees with children or caregiving responsibilities. Offering family-friendly perks like flexible parental leave policies, childcare subsidies, or family leave can make a difference. Even modest contributions toward these benefits show a commitment to employee well-being.

How to Find the Best Non-profit Benefit Package for Your Organization

How to find the best non-Profit Benefits Packages to Your Employees

There are a number of good options and alternatives that you can try. You can check out the following options:

Buying Directly

Buying insurance premiums directly from insurance companies is typically suitable for people buying individual packages, meaning that companies buying for lots of employees may have to spend more with this option. Direct purchase is mostly intended for people who are buying insurance individually. Besides, employees might have to pick out the plans they want individually and then check with the company to know if they can help them afford the plan. This plan may not only be confusing for management to handle, but employees may have to pay with post-tax earnings.

SHOP Insurance

Companies with 50 or fewer FTEs — including nonprofits — are eligible for the Small Business Health Options Program (SHOP) Insurance coverage. While a nonprofit is not required to purchase insurance for employees through the SHOP Marketplace, you might be able to save on health insurance if you have fewer than 50 FTEs in your company.

Professional Employer Organizations

Unlike going through regular insurance brokers, where you may be priced out of group insurance, PEOs offer group rates that make employee benefits quite affordable to employers. And this applies across the board, whether you are a nonprofit or a for-profit company. PEOs generally group small businesses together to obtain enterprise-level benefits.

PEOs offer you a wide variety of benefits for less. From affordable healthcare premiums to 401(k) plans, life insurance policies, paid time off, family leave, and workers’ compensation, PEOs allow you to enjoy premium benefits while saving the trouble and cost involved. This is because PEOs are in contact with many insurance carriers, many of whom you may not be able to negotiate with on your own. Besides, there are many more benefits of working with a PEO.

Check out our post on how working with a PEO can save you money and help your nonprofit offer competitive benefits to your employees.

Need Further Assistance with the Best Nonprofits Benefits Packages?

Feel free to reach out to us today at The Mission to learn more about the cost of hiring a PEO and selecting the best PEO. At the Mission, we usually recommend that our clients work with certified PEOs or PEOs that have a longstanding reputation for excellence. Working with a certified PEO company shields you from errors and liabilities that may arise as a result of the negligence, actions, or inactions of the PEO. Besides that, you’ll typically have access to a fuller range of benefits with a larger, more established PEO.

At Mission HR, we do not only offer your business the services and solutions you need to scale your business quickly and efficiently. We also bring our years of experience and rich insight to the table, providing businesses with answers to all their bugging HR and outsourcing needs.