501(c) Services Executives Reflect on the Past, Present, and Future of the Organization
In 1981, John Huckstadt, a former nonprofit executive director, learned about the financial advantages available to nonprofits if they chose to opt-out of state UI tax programs and reimburse the government for unemployment benefits instead.
One year later, fourteen agencies of the United Way in Santa Clara County, CA banded together to form the nation’s first unemployment grantor trust for reimbursing nonprofits—then called the Joint Unemployment Compensation Trust.
An additional company, 501(c) Services (“501”), was formed in tandem to provide financial, administrative, claims management, membership, and insurance services for the new trust and its members.
Shortly thereafter, 501 would go on to establish the Washington Unemployment Compensation Trust, which included 100 nonprofit members in Washington State. In 1990, this Washington-based trust was renamed the Northwest Unemployment Compensation Trust and expanded to include nonprofits in Alaska, Oregon, and Idaho.
In 2007, the two smaller trusts were merged to form one national trust – the 501(c) Agencies Trust. Along the way, 501 built partnerships with major national organizations including YMCA of the USA, Boys & Girls Club of America, National Human Service Assembly, America’s Second Harvest Food Banks, and YWCA of the United States.
Entering its 40th year, 501 is led into a new era of service by Chief Executive Officer, Darren Bowman and Chief Operating Officer, Eric Stemm. Here’s what they have to say about the success of the organization, new developments made, and the privilege of working alongside nonprofits.
On the growth of 501 and its 97% client retention rate:
Bowman: “I hope it [the retention rate] is due to the fact that we provide good value to our members and the fact that when they interact with us, they come away with a positive experience. A lot of what we do is nuts and bolts accounting work, which means that the times we interact with a person over the phone or by video call are so important. Those are the interactions that really make or break the relationship.
We’ve always invested heavily in having a customer service team that will make phone calls and talk to people. When somebody calls here, they can have somebody pick up the phone and not just leave a message for voicemail.”
Stemm: “What we strive for is a personal touch. While we believe in technology and its ability to help us, we never want to replace a human connection with automation. [Unemployment insurance reimbursing] is a tricky industry, and our customers don’t know much about it. They need somebody who can stop and spend an hour with them and walk them through what they need to do at any given time.
We pride ourselves on not only being good at what we do but on having the time to serve our customers at whatever level they need, whether it’s just a quick phone call or whether it’s walking them through a whole lengthy process.”
On providing services to members throughout the COVID-19 pandemic:
Stemm: “I’d like to think that the pandemic gave us the opportunity as a company to demonstrate what we do, why we exist, and why they hire us.
When times are good, our customers aren’t laying off a lot of people and they don’t have a lot of unemployment. However, when we went through the pandemic, they suddenly had a huge amount of work for us to do, and I think that we did a pretty good job of keeping up with it. Our folks worked really hard, and I think it gave us the opportunity to demonstrate our value and our expertise to our customers in a new way.”
Bowman: “2020 and 2021 were really scary years, particularly for reimbursing nonprofits. They were facing so many operational challenges that keeping track of the changing unemployment laws was too much to ask, so it was a real chance for us to provide value. I was so proud of our team for the way they stepped up and figured out how to work from home while continuing to provide the level of service that we aim for.
It was also a unique opportunity to draw closer to like-minded groups and advocate together for government support for the nonprofit sector, which saved a huge amount of money for our members.”
On expanding the scope of services available to member organizations:
Bowman: “A few years ago, we added reemployment services to our portfolio so that when somebody is laid off at a member agency, we can get them back to work faster, which in turn saves our members money. It had such obvious synergy with what we do, that it was a great, easy thing to add.
We’ve also expanded the scope of our HR services. Having a well-functioning HR department is one of the secrets to winning your unemployment claims, which in turn saves a lot of money when you’re a reimbursing employer.”
Stemm: “One of the great things I think we’ve done over the last five or six years is to really expand our webinar training offerings. We used to do six or eight different webinars. Now we have 30 or 40 different topics that we hold webinars on, and they’re all eligible for continuing education credit for HR professionals.
We’re looking to continue expanding that by bringing in outside speakers and pushing to deeper-level topics. We’re always looking for ways we can improve our services and bring more value to our customer and, ideally do it without raising the cost for anybody.”
On the most rewarding milestones from their time with 501(c) Services:
Stemm: “In the last 10 years we have transitioned to being a fully employee-owned company, which has been really, really rewarding. Rather than working for another company or for shareholders, we, as the employees, get to work together on our company. It’s helped to build a sense of camaraderie amongst the team.
I think the most rewarding thing, though, has been my experience with the 501(c) Agencies Trust’s board of trustees. We get a chance to meet with them at the quarterly board meetings and these people… they’re some of the most outstanding people I’ve ever met.
In some cases, they’re working in really difficult spaces, in communities where people really need help of one kind or another. The personal investment and the energy that they pour into these communities that they serve—it’s just inspiring. It really is. They pour themselves, heart and soul, into their work and there’s no financial reward there for them really. They just care about people and they like helping people.”
Bowman: “The most rewarding part is being able to feel like I’m contributing to the nonprofit sector and associating with the nonprofit executives that form the 501(c) Agencies Trust’s board of trustees.
I also don’t discount the fact that even though we’re a small company, we’re providing 25 employees with a place to work that I hope is a cut above the rest.
I know I’m contributing in a very real, measurable way to the lives of people that I see every day.
I’ve seen their kids grow up, I’ve seen some of their struggles, they make good money, they’ve got good healthcare benefits… Basically, they are near being treated the way I wish people everywhere were treated by their employers. I can’t change the world, but I can at least make the world a little better for these 25 people.”
On lessons learned from working in the nonprofit industry:
Bowman: “I started my career in the high-tech industry, but the pursuit of IPOs and get-rich-quick motivations didn’t satisfy my deeper needs for connection and meaning. When I switched to the nonprofit industry, I finally found the sense of purpose that I’d been looking for, and I found co-workers to whom I could relate and say to myself, “These are my kind of people.”
When we face difficult decisions as a company, one of the core values that we consistently return to is the idea that “Our mission is to support their [the member’s] mission,” or in other contexts, “Their money is more valuable than our money.”
Stemm: “It just reminds you every day that it’s not all about you. There are people out there that are in need, and you can define that in a million different ways.
What we do is almost one step removed— we’re not the people that are serving food or helping kids in need—but we’re helping the people who provide these services, and we get to interact with the people that are on the front lines. It feels like we’re part of the team.”
ABOUT THE AUTHOR
Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others. She writes weekly nonprofit-specific content for 501c.com.
(Image by usman zahoor from Pixabay)
