★★★★★
“VertiSource knows our industry. They set up our multi-state payroll in weeks and caught compliance issues our previous provider missed entirely.”
Operations Director
National services company, 200+ employees
NONPROFIT
HR that stretches every dollar.
Grant-funded payroll splits, 403(b) plans, volunteer vs. Employee classification, and board-ready compliance reports. Nonprofit-discounted pricing and a specialist who’s worked with 100+ missions.
$0K+
Median A-133 disallowed-costs ruling (OMB 2024)
0%
Grant-compliant time allocation on our payroll-lead schema
Zero
A-133 audit findings on J.L.'s 120-employee Utah nonprofit
Your Nonprofit HR realities, paired with how our specialists handle each.
Grant Compliance
Fund-specific payroll allocation for federal grants
Every payroll run distributes costs across grants, programs, and cost centers, and generates Uniform Guidance-ready reports that map directly to your chart of accounts.
100% grant audit pass rate across federal and state funding sources.
What you're exposed to OMB Uniform Guidance noncompliance: $500K–$5M typical A-133 disallowed-costs rulings. Federal grant clawback includes interest + suspension from future awards.
In practice "A-133 time-and-effort documentation was our single-biggest audit risk. Dave set up the allocation schema by grant, and our auditor called it 'textbook.'" E.F., Finance Director, 90-employee Utah social services nonprofit
100% PASS
403(b) Administration
403(b) administration with universal availability compliance
We handle vendor coordination, automated deductions, contribution tracking, and annual nondiscrimination testing so your team avoids IRS EPCRS correction filings entirely.
Every 403(b) deduction, vendor coordination, contribution record, and annual nondiscrimination test handled in-house. Zero IRS EPCRS correction filings needed.
What you're exposed to 403(b) nondiscrimination test failure triggers excise tax + corrective distribution + potential plan disqualification. Form 5500 late-filing penalty: $250/day capped at $150K.
In practice "Open enrollment isn't a scramble for the teams I run. It's a scheduled meeting." Jennifer C, Benefits Director
403(b) READY
Competitive Benefits Budget
Group benefits at large-employer rates
We shop medical, dental, vision, and ancillary benefits across all carriers for nonprofits, so a small org sees options it could not pull together on its own.
100% of medical, dental, vision, and ancillary enrollment administered, with carriers shopped on your behalf for competitive rates our carrier relationships earn. National carriers, shopped on your behalf.
What you're exposed to Below-market benefits drive 27% higher turnover (NCCS 2024). On a 90-employee nonprofit: $400K+/year in unnecessary replacement cost.
In practice "I review every variable-hour employee's status every cycle. Not the system. Me." Jennifer C, Benefits Director
FULL-MARKET SHOPPED
Volunteer Classification
Volunteer versus employee classification guidance
Our HR team applies current DOL and IRS criteria to your volunteer agreements, stipend structures, and documentation, shielding the org from FLSA misclassification claims.
Zero wage-and-hour claims among clients on our classification protocols.
What you're exposed to Misclassifying a volunteer as non-employee when they meet the FLSA test = back wages × 2 + liquidated damages + DOL audit. Median recovery: $1,120/employee.
In practice "Wage-and-hour is where firms bleed. I run the audit before DOL does." Jenifer V, HR Advisor
FLSA SAFE
Board & 990 Reporting
Form 990-ready executive compensation reporting
We generate board-ready total comp summaries, benchmarking data, and Schedule J-aligned compensation schedules so your admin team stops compiling spreadsheets every quarter.
Audit-ready 990 compensation data on every Form 990 filing deadline.
What you're exposed to Form 990 Schedule J executive-compensation reporting gaps trigger IRC §4958 intermediate sanctions. Up to 25% excise tax on excess benefit transactions.
In practice "I actually feel confident when our board asks about HR risk now." J.L., HR Director, 120-employee Utah nonprofit
990 READY
Multi-Grant Time Tracking
Multi-grant time tracking with audit trail
Staff log hours by grant, program, or cost center, and payroll auto-distributes costs by actual time worked, creating documentation rigorous enough for federal grant audits.
Every hour logged by grant, program, or cost center and auto-distributed at pay run. Documentation rigorous enough for A-133 audit. Zero manual reconciliation.
What you're exposed to A-133 time-and-effort documentation gaps are the #1 disallowed-cost finding in nonprofit federal audits. Median clawback: $200K–$800K per funding cycle.
In practice "Every tax deposit, every state, every cycle. I don't trust the software. I check." Dave Harris, Accounting Lead
A-133 READY
Grant
Funded Payroll Allocation
403(b)
Retirement Plan Admin
990
Board Reporting Ready
We work with nonprofit organizations like yours
From grassroots community organizations to national advocacy groups. Our PEO is built for the unique compliance, compensation, and funding complexities of the nonprofit sector.
5–25 Employees
Community-Based Organizations
Local nonprofits, social service agencies, and community foundations with small teams wearing multiple hats. Affordable benefits that compete with the private sector, grant-funded payroll allocation, and the HR guidance your ED needs without hiring an HR director.
25–100 Employees
Mid-Size Nonprofits & Associations
Regional and national nonprofits, trade associations, and membership organizations with program staff across multiple locations or states. Multi-grant payroll tracking, executive compensation compliance, and 990-ready reporting.
100+ Employees
Large Nonprofits & Multi-Program Organizations
National nonprofits, hospital systems, and multi-program organizations with complex funding structures. Enterprise payroll with funder-specific cost allocation, multi-state compliance, board-level compensation reporting, and audit-ready documentation.
CASE STUDY
How a regional nonprofit streamlined grant payroll and stopped losing staff to the private sector
The Situation
A regional nonprofit with 95 employees across 3 grant-funded programs was managing payroll allocation manually in spreadsheets. A recent audit flagged time tracking gaps that led to disallowed costs. Meanwhile, the organization was losing experienced program staff to private-sector employers offering better benefits and retirement packages.
What We Deployed
Fund-specific payroll allocation
Automated multi-grant time tracking
403(b) with employer match
Competitive group benefits package
Board-ready compensation reports
Grant audit documentation
Volunteer classification compliance
Cost allocation reporting
The Outcome
100% grant audit compliance with zero disallowed costs. Payroll processing time cut by 40% through automated fund allocation. Employee retention improved 20% after introducing competitive benefits and 403(b) retirement plans. The organization now passes every grant audit on the first review.
"Our last grant audit closed in two days with zero findings. The auditors actually complimented our payroll records, which has never happened before."
Full Nonprofit HR compliance landscape
Every regulation we handle on your behalf. Tap to expand.
Grant Compliance & Fund-Specific Payroll Allocation
Federal and state grants require precise payroll allocation by fund, program, and cost center. One misallocation can trigger an audit, repayment demands, or loss of future funding.
How we solve this →
403(b) Retirement Plan Administration
Nonprofit employees expect retirement benefits, but 403(b) plans have unique compliance requirements, vendor management complexity, and fiduciary responsibilities that differ from 401(k) plans.
How we solve this →
Competitive Benefits on a Nonprofit Budget
Nonprofits lose top talent to the private sector because they cannot offer competitive benefits packages. Limited budgets mean every dollar spent on benefits must deliver maximum value to employees.
How we solve this →
Volunteer vs. Employee Classification
Misclassifying volunteers as employees or vice versa creates wage-and-hour liability, workers' comp exposure, and tax penalties. The line between volunteer and employee is not always obvious.
How we solve this →
Board Reporting & Compensation Transparency
Nonprofit boards require detailed compensation reports for IRS Form 990, executive compensation benchmarking, and public transparency requirements.
How we solve this →
Multi-Grant Time Tracking & Cost Allocation
Employees split time across multiple grants and programs. Without automated time tracking tied to payroll, cost allocation becomes a manual nightmare that auditors love to scrutinize.
How we solve this →Nonprofit HR questions, answered
The most common questions we get from executive directors, board members, and nonprofit operations managers.
Yes. Nonprofits. From community service organizations to national advocacy groups. Use PEOs to access affordable benefits, manage payroll compliance, and reduce administrative burden. The co-employment structure is fully compatible with 501(c)(3) tax-exempt status and does not affect your organization's nonprofit classification or grant eligibility.
Many nonprofits fund positions from multiple grants, each with its own reporting requirements and allowable cost rules. We configure your payroll to allocate labor costs across grant funding sources, generate funder-specific payroll reports, and maintain the documentation auditors and grantors require. When a position is split across multiple grants, we track the allocation percentages and adjust them when funding changes.
Yes. Through our PEO, we shop medical, dental, vision, and 401(k) plans across the full carrier market for nonprofits, surfacing options a small org could not reach alone. This allows nonprofits to offer benefits that compete with the private sector, which is critical for recruiting and retaining skilled program staff, development officers, and leadership without exceeding budget constraints.
The IRS scrutinizes nonprofit executive compensation through Form 990 reporting and the intermediate sanctions rules. We help nonprofit boards document the compensation-setting process, maintain comparability data, and ensure executive pay packages meet the rebuttable presumption of reasonableness.
PEO relationships are transparent to auditors and grantors. We provide audit-ready payroll documentation, detailed labor cost allocation reports, and benefits cost summaries in the formats auditors need. Many of our nonprofit clients have gone through single audits and grantor reviews without any issues related to the PEO structure.
Commercial insurance
through IIG
All coverage
50-State Coverage
Compliance rules for your state, at a glance.
Click any state to see minimum wage, paid leave, pay transparency laws, and upcoming deadlines.
Open state compliance map →Let's talk about your nonprofit's HR needs.
Whether you run a 10-person community organization or a 500-employee regional nonprofit, we will show you exactly how we handle grant compliance, 403(b) administration, and benefits that stretch your budget.
Talk to a Nonprofit Specialist → 855-565-8747