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As non-profit organisations struggle to compete with the private sector to retain their staff, the Minimbah Adult Training Institute has found great success by taking advantage of government tax breaks and new services that are emerging to assist the non-profit sector.

The Minimbah Adult Training Institute in suburban Sydney has been providing quality care to disabled adults for more than 20 years. With a small full time staff of 35, the centre provides independent living skills, training and community access programmes for adults with intellectual and/or physical disabilities. The majority of Minimbah's clients have very high support needs. It is often the case that one carer will dedicate all of his or her time to one client.

These front-line caregivers provide hands-on care and are often the ones most familiar with the needs, preferences and concerns of the individuals in their care. For this reason, the importance of consistent, enduring relationships between caregivers and clients cannot be over emphasised.

However, this is the greatest challenge being faced by non-profit organisations such as Minimbah. With high staff turnover, and the fact that some clients can remain with the organisation for more than 20 years, problems can quickly appear.

Michael Welch, Treasurer of the Minimbah Committee explained:

‘We often get people who are initially motivated and stay with us for a while but then leave.’

The Problem

The real cost in a high staff turnover is far more expensive than the simple cost of replacing an employee. ‘There is an investment in the development of that employee. The value of the knowledge and experience gained during their time with the organisation also needs to be taken into account,’ Mr Welch said. ‘Every time we lose an employee we need to start the process again.’

Non-profit organisations are not in the same position as a normal profit-making company, he added. ‘The very nature of our enterprise dictates that we are restricted in what we can offer.’

To address this problem, the federal government has created legislation that allows employees working in the non-profit sector to take advantage of a lucrative salary-packaging scheme. Employees employed in the non-profit sector are provided with a unique tax concession, making them exempt from Fringe Benefit Taxes, provided that the total gross value of all fringe benefits provided to them does not exceed $30,000. Simply put, employees can receive up to $30,000 in benefits from their employer without a tax penalty.

‘This will actually save us (the organisation) money and enable us to offer more to both our employees and clients at the same time. In our business, that can make a difference to us being able to retain our staff,’ Mr Welch said.

Unfortunately the cost, complexity and time required to implement and administer the benefits have placed it in the ‘too hard’ basket for many non-profit organisations such as Minimbah.

The Solution

Payroll outsourcing service Aussiepay conducted research to discover why more Not-For-Profit Organisations (NFPOs) were not taking advantage of the salary-sacrificing scheme. ‘What we found was that while most organisations knew about it, they just did not have the internal infrastructure to implement it for all of their employees,’ Aussiepay's Managing Director, Dean Morelli, said.

‘There are a number of misconceptions that NFPOs seem to have about these benefits. Some think that the benefits only apply to full-time staff while others think the employee is limited to 30 per cent of her or his salary. This is not the case. However, implementation can be complicated. Passing on these benefits to employees involves ensuring compliance with industrial relations legislation and superannuation requirements.’

The Minimbah Institute investigated a special service offered by its payroll provider Aussiepay, a company specialising in salary packaging for the non-profit sector.

‘We initially had four staff members who were having their salaries packaged,’ Mr Welch said. ‘Like anything new you want to test things first, but that worked very well and now we are looking at extending the benefits to all our full-time employees.’

‘For a small organisation like ours, outsourcing services like payroll saves a substantial amount of money. We don't have the time, staff or the money to spend on administration. By outsourcing to Aussiepay, we have actually saved ourselves a considerable amount of money. This means we can offer our staff more attractive packages and ensure that the majority of our time is spent on what we are meant to be doing: caring for our clientele.’

The Advantages

Talking of the advantages that exist for non-profit organisations such as Minimbah, Mr Morelli added: Traditionally, working for non-profit organisations has often been seen as a disadvantage: a direct result of lower wages than that of the private sector. But this misconception is changing. Non-profit organisations are now able to easily reward their employees by taking advantage of the benefits available.

Essentially what's important is that the net pay an employee receives is comparable to their private sector counterpart. If a non-profit employer can achieve that goal with no increase to its outgoings, then all stakeholders are the beneficiaries.

Aussiepay simplifies the entire benefits management and payroll process for such organisations. The service is designed to eliminate the need to collect and keep thousands of receipts and manually manage employee balances.

The service integrates into a debit card which is fully compliant with Tax Office obligations and provides employees with the ease of purchasing with credit cards. Employees are fully advised of their salary breakdown on their pay slips and can access balances via a call centre or web site.

The organisation is effectively able to provide employees with somewhere between a 10 per cent to 15 per cent increase in take home salary for no increase in cost to the organisation, Mr Morelli added.

This article also appears on the Access Online website, you can find it by following the below link

http://www.accessonline.org.AU/index...view&id=312&Itemid=27