How to Open a Daycare

We have compiled licensing procedures for New York City. Make sure to follow your state’s specific requirements. Regardless this will give you a general idea of what you will have to do Read More »

What Daycare Owners Must Know About Lead Based Paint

The most common cause of childhood lead poisoning is the dust that comes from lead based paint. While lead paint was banned for NYC residential use in 1960, and nationwide in 1978, Read More »

How to Manage Abuse & Molestation Risks – Part 1

Above all else a school’s primary responsibility is to keep their children and teens safe at all times. Unfortunately this is not always the case as during the past few years several Read More »

Proper Insurance Claims Follow Up Procedures Yield Big Dividends for Schools & Non Profits

If you read our first article in the series “Managing Insurance Claims First Reports Can Have Big Impact  for Schools  & Non Profits” then you know that it’s a two part process, Read More »


Category Archives: Non Profits

An Update on New York Non Profit Sector Reforms

Attorney General Eric T. Schneiderman first introduced a plan in February to reform and revitalize New York’s nonprofit sector. A major component of that plan is the “Non Profit Revitalization Act” which was brought to the New York State Senate in May. The act is scheduled to take effect January 1, 2013. The attorney general’s plan includes legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his commitment to policing fraud and abuse. Acknowledging that organizations throughout New York have been facing historic financial and strategic challenges, the attorney general’s plan also includes several new partnerships with the business and academic communities to enhance nonprofit governance.

Schneiderman’s legislation includes a number of key reforms:

  • Streamlining bureaucratic processes to expedite the formation of nonprofits and approval of key nonprofit transactions;

  • Modernizing outdated requirements, such as permitting the use of technology to facilitate more efficient operations and to reduce costs;

  • Requiring that boards provide improved and independent oversight of executive compensation;

  • Increasing board responsibilities to oversee financial audits;

  • Enhancing the Attorney General’s tools to police self-dealing and other forms of corruption;

  • Requiring nonprofits adopt conflict-of-interest and whistleblower policies.

The Nonprofit Revitalization Act represents the most comprehensive reform to New York’s nonprofit laws in over 40 years. If implemented, it will revitalize the nonprofit sector by substantially reducing burdens and costs on nonprofits and strengthening governance and accountability.

What does this have to do with risk and insurance? Simple, risk comes in all sizes and shapes. Insurance is just one way to transfer risk. However, not all risk can be transferred to insure such a legislative risk. It’s important that you engage with a risk advisor who works in the Non Profit industry instead of purchasing insurance through a broker who simply handles a transaction that deals with only a small part of your risk.

We think this report is a critical read for anyone who works in or leads a Non Profit in New York. Make sure to give the full report a read and as always contact us with any questions you may have on how this could affect your non profit.

The Basics of Your Directors & Officers Insurance Policy (D&O Insurance)

Federal regulatory agencies have been increasing investigations and enforcement in the past few years, and recent reforms in health care, banking, and consumer protection will likely generate new liabilities for companies.

Most mid-market for profit and not for profit businesses carry some form of directors and officers liability insurance to protect the company and its executives in the event of a regulatory investigation or penalty. But those policies often have limits or exclusions to the coverage based on corporate structure, industry, and the nature of the investigation itself. Many companies that we have spoken to didn’t know how their D&O policies were structured.

Because insurance buyers at mid-market companies may not fully understand their D&O coverage, they expect that it’s all-inclusive, and that anything that comes about is going to be picked up. So when they receive a denial or a reservation of rights letter from the carrier, they are obviously surprised and disappointed.

Lets go over the basics:

  1. Costs from an investigation in which a company is merely a party of interest, and not the target of the investigation itself, are typically not covered by most D&O policies.
  1. Do not limit your coverage to any specific agency by listing them, as you could run into a problem with interpretation. If you’re investigated, but not by the particular named agency in the policy, the implication is that it’s not covered.
  1. Until recently, legal fees and other costs associated with an investigation prior to the issuance of a subpoena or official notice of an accusation, known as “pre-claim” costs, were the responsibility of the company or its directors. Private companies could only obtain coverage for costs after an official notice of investigation was received. Insurers have recently begun offering products to cover pre-claim costs in certain situations but have yet to form a comprehensive coverage package for costs on both sides of an official agency action.
  1. It would certainly benefit you to hire a lawyer before you sit down with any federal or state regulatory agency. Your policy may be limited to formal investigations only.  If so you may not be covered for costs, or at the very least you’re going to have a dispute over what constitutes a formal investigation.

Now that you know the basics, let’s go over some common mistakes that are made:


  1. One common mistake is failing to notify your broker/insurer when contacted by a regulator. Most policies have a fixed time period within which a client must report a claim. As a result failing to do so at the earliest possible opportunity could jeopardize coverage for the investigation and subsequent claims arising from the original event.
  1. Employers worried about their company’s profits may assume that simply fulfilling an agency’s initial request for information will satisfy their obligations under their D&O policy. Then they may decide not to report the contact to their insurer, hoping to improve their chances at favorable renewal rates.
  2. Employers sometimes struggle to file claims in a timely manner if their staff has not been properly instructed on the matter. The problem we see all the time is a human resource director often won’t know that they need to inform their CEO or CFO that they were contacted by a regulator, because that’s what triggers coverage.
  3. A final mistake lies in the selection of counsel once a director has been contacted by a regulator. Smaller companies often turn to an in-house legal adviser or an external general practice lawyer that they’ve worked with before. General business litigation experience likely will not prepare a company or its lawyers for the intricacies of regulatory investigations and the insurance policies that guard against the damage they can inflict.

We hope you come away from this article with a greater education on D&O Insurance policies. If you have any more questions on directors and officers insurance please feel free to contact one of our experts.

5 Ways to Get Facebook Likes for Your Non Profit

Why is a Facebook “like” important; because every like means another person receiving your status updates in their newsfeed. Every like means another person who can share a story with all of their friends. This is why likes grow exponentially, especially with non profits. People love to help, or at least feel like they are helping a great cause. This could be through donations or through awareness. To put it simply, with every like there is a greater chance of donations, participation, and ultimately exposure for your non profit all done on the cheap as it costs nothing but your time.

If you are still reading this then you agree that likes are important; but how do you get them? As I mentioned it’s a much easier feat for a non-profit than a for-profit business. Here are a few strategies to get lots of likes.

1. Email campaign – Simply ask your current contacts to “like” your page. If you’re new to using a mass email service, consider utilizing Mail Chimp’s “Forever Free Plan.” They say you get up to 2,000 subscribers and 12,000 emails per month for free.

2. Run a contest – To be eligible to win people must like the Facebook page. Give away an item or an experience to the lucky winner. We’ve seen groups raffle free ipads, but anything from t-shirts to water bottles could help.

3. Ask someone to match a donation – For every “like” the non-profit receives Person X will donate $1. Or maybe to put it differently, “If the Facebook page reaches 1000 followers Person X will make a $1000 donation.”

4. Create Interesting content that people will share – This is the most important thing you can do. Post photos of the great work you are doing. Write articles that your followers can share all over the web. Put videos on Youtube. Your work will spread naturally.

5. Write press releases – Media sources are always on the lookout for content, and non profit work is often an easy sell. Ask to include a mention about your Facebook page at the end of the article.

These were just a few ideas to get you started. Be creative, think outside of the box and be genuine. Good luck!

Using Facebook for Non Profit Fundraising

Every Non Profit business should be utilizing Facebook to some extent. It is a great tool to help with fundraising whether you collect your donations through it or not. The major benefits Facebook brings to your business are increased awareness and efficiency. In this article we will get those of you who do not currently utilize Facebook for fundraising started. Feel free to contact us with any questions you may have.

Step 1. Obviously step one is to create your Facebook page. Under “Company, Organization, or Institution,” make sure to categorize yourself as a “non profit.” Add a description about your cause, and start inviting employees, friends, family, etc. Gaining followers or “likes” is an exponential process so invite as many as you can to start out. Periodically ask for your fans to invite their friends to “like” your page.

Step 2. Setup a Paypal account if you don’t already have one. There are no startup, cancellation, monthly or annual fees.

“PayPal has partnered with FundRazr to bring you an app that helps raise money and awareness for causes you care about. Reach out to your friends on Facebook, your Website, blog and more. Get the FundRazr app now

It’s Shareable – Your friends can share your FundRazr with their friends. Before you know it, your cause can go viral.

It’s Easy to Donate – Friends can donate right from their Facebook News Feed, your Website, your blog-wherever they view your FundRazr.

It’s Flexible – You can personalize app content, colors and payment options. Add a picture or a video. FundRazr works for personal causes, groups and other organizations.

Pricing – No setup or monthly charges-there’s a fee per transaction. (Click the image below)”

You could skip the PayPal badge if you’d like and direct people to your website, or other methods that you currently use. This will avoid the transaction fees which can add up over time (See above). For example an employee of mine recently ran a charity hockey event for wounded veterans. Since it was just a one time event they created a Facebook page, invited hundreds and hundreds of people over time and directed most donations to at the door ticket sales, in game events, and old fashioned checks. They ended up raising over $12,000 in just about 1 month! They did sell some tickets and collect some donations ahead of time by using a site called Worth checking out if you plan to have an event where tickets are needed. They also take a transaction fee, but a smaller one than Paypal. The Facebook page became the source of information for media outlets and the hub for people to find out what was going on.

Step 3. Now that you have your page and possibly a means of collecting donations, the hard stuff is done. If you plan to hold charity/fundraising events, make sure to create a Facebook event (hosted by your business page) for EVERY event you are planning. To spare the length of this article here is a great resource on setting up a Facebook event.

Step 4. Continue to update your timeline with comments, LOTS of pictures and videos, and track your metrics. Finally, send a friendly email to your contact list asking for people to “like” your page.

We hope this is a good starting point for you if you haven’t yet thought about using Facebook for fundraising. We will add a few more articles on the subject. In the meantime, feel free to contact us with any questions.

Need Funds to Merge or Coordinate Your Non Profit??

New York based Sea Change Capital Partners can help! On February 28th the organization announced the launch of a $1 million dollar NYC Merger Acquisition and Collaboration Fund to ease the path for charities to combine their efforts.

In a Wall Street Journal article published on February 28th, 2012 John MacIntosh, Partner at Sea Change Capital, was quoted as saying “We are looking to remove obstacles so that natural things can happen.” The pool of money is to be used for grant making for important expenses that are critical to knitting two non profits together. The expenses typically include: legal and accounting services, real estate changes, severance for outgoing executives, and meeting/travel expenses.

If you are considering merging with another Non Profit, or may consider coordinating a benefit or service to your constituents we suggest that you reach out to Sea Change Capital Partners directly to help make your vision a reality.

Did You Know That Non Profits Can Avoid Unemployment Insurance?

In case you didn’t know, 501(c)(3) organizations are not obligated to pay unemployment taxes.  Non profit organizations typically are not aware of this option since the state unemployment office rarely provides this information. Nonprofits can choose to protect themselves by participating in a private unemployment trust such as The Nonprofit Trust. Funding unemployment obligations this way can help nonprofits substantially reduce their costs, especially if the organization has over $1,000,000 in payroll.

The option has existed since 1972 which was when nonprofits were required to provide unemployment benefits to their employees. They were given an option that the private sector does not have – Becoming a reimbursing employer.
Lets go in to a bit more detail. The employee laid off from a reimbursing employer still files a claim at the unemployment office and still receives checks from the department. The difference is a reimbursing employer does not pay unemployment taxes, but instead reimburses the state for actual unemployment claims paid on their behalf.
So the only change is in how the organization funds the benefit. Typically they fund it by paying the unemployment tax, but this is rarely the best way for a nonprofit organization to fund unemployment claims because of the following:
  1. Nonprofit employees often make less in wages yet nonprofit employers are still charged just as much, if not more, than private sector employers.
  2. Nonprofit employers tend to have more part-time labor which actually increases unemployment tax expenses.
  3. Nonprofits usually have lower unemployment claims than private sector employers.
Contact a Risk Advisor at Metropolitan Risk Advisory to get more information about the program as well as our other cost saving programs.
The tax system as a whole has contributed to the problem because:
  1. Due to the economy, unemployment taxes increased in 29 states last year. (Increases were as high as 161% in certain states).
  2. Over 25 state unemployment departments are now insolvent and borrowing money from the Fed. just to pay claims, increasing the need to increase tax rates. This number is expected to climb to nearly 40 by the end of 2011!
  3. States are overpaying claims in error by more than $1,000,000,000 per year!, and the problem is increasing due to the sheer volume of claims being processed due to the economy.
The Nonprofit Trust, mentioned above, offers your clients a safe, secure and cost effective alternative to the unemployment tax system in every state. In addition to the savings, the Nonprofit Trust offers a variety of services not available through State Tax systems:
  1. Savings average between 40% and 50% EVERY year.
  2. Claims administration handles all communications with the unemployment office including initial notifications, claims protests, hearing representation, etc., reducing staff time spent on unemployment, driving claims costs down by winning more cases than employers do on their own (94% vs. less than 50% for employers) and by auditing every single claim processed, catching overpayments made by the states and they are corrected.
  3. Free Human Resources Hotline that assists with any type of HR issue, not just unemployment related issues, which can save the nonprofit time and money in getting the answer they need.
Contact a Risk Advisor at Metropolitan Risk Advisory  to get more information about the program as well as our other cost saving programs for non profits. 

High Workers Compensation Costs? A Susan Harwood Grant May Provide The Answer

The U.S. Department of Labor’s OSHA recently awarded $10.7 million in Susan Harwood Training Grants to 37 new and 32 returning recipients! These grateful recipients include nonprofits, community & faith based groups, business & trade associations, labor unions, joint labor/management associations, and colleges/universities.

What are Susan Harwood grants?

Typically these grants are awarded with the goal that no man or woman should be forced to risk injury or death for a paycheck. Awarded by the federal government, they provide tools for workers and employers in some of the most dangerous industries in America to identify and eliminate hazards. The money goes towards education and training that will help ensure that every worker returns home safely at the end of their work day.

Who is eligible?

The program awards grants to nonprofit organizations on a competitive basis.Target audiences include under served, low-literacy, and workers in high-hazard industries. Workers that are otherwise vulnerable, and small business employers, are also a primary audience. Since 1978 almost 2 million workers have been trained through the program.

Potential benefit?

In an analysis conducted by Metropolitan Risk Advisory we see an average of 37% cost savings on workers compensation insurance and other related costs that are there for the taking. The problem is that many small businesses and non profits lack the staffing and knowledge to deliver a substantial portion of that savings thus they stay within that escalated cost spiral perpetuated by the insurance carriers. These Susan Hayward grants help fund that discovery process that incorporates training and other resources to help struggling small businesses and non profits reduced cost in perpetuity.

This year:

  • “$3.2 million in Capacity Building Developmental grants to 20 new organizations that will develop their expertise and capacity to provide occupational health and safety education to their constituents”
  • “$400,000 to five organizations for pilot grants to lay the groundwork for a self-sufficient safety and health education program.”
  • “$1.3 million to 10 organizations to provide Targeted Topic Training grants”
  • “$100,000 to two organizations for Training and Educational Material Development grants which must address one of the occupational safety and health topics designated by OSHA.”
  • “$5.7 million in returning or follow-on funding to 32 recipients of prior year Capacity Building Developmental grants that had demonstrated satisfactory performance.”

Visit the OSHA Web site for a complete list of the 2011 Susan Harwood grant recipients. A simpler and equally cost effective way to achieve the 37% savings is to speak to a risk advisor who can analyze your data and help you develop a strategy to capture this savings without paying a fee! In addition please make sure that your employees are protected with a sound and cost effective workers compensation insurance policy. Please contact one of our risk advisors at Metropolitan Risk Advisory with any questions or concerns that you may have.

Important Trends In The Childcare & Nursery School Industry

If you are an executive director, or owner of a daycare/nursery school business it is important to be alert to important indicators within your industry. We found the following data through First Research, a provider of industry intelligence tools primarily to the private equity industry.


1. Demographics
The population of children in the target area for child care is anticipated to rise over the next 10 years. This will create a larger demand for child care services. It is predicted that the number of children under 5 will increase by 8 percent and the number of children between ages 5 and 13 will increase by 10 percent. ( Source: Bureau of Labor & Statistics )
2. Government Spending

Government spending has been increasing. Almost 35% of the child care industry revenue comes from government spending. ( Source: Bureau of Labor & Statistics )

3. Real Time Online Surveillance

Centers throughout the nation are now using online video to allow family members to watch their children from their computers. Parents are not able to hear what is happening but can see their children in real time. It is anticipated that more and more child care centers will implement this technology even though there are some privacy concerns. ( Source: Risk & Insurance Management Society)

4. Nannies Are Strong Competition

Nannies compete directly with child care centers. They typically work 40-60 hour weeks and make an average of $500 per week. They do not typically live on the premises. (Bureau of Labor & Statistics)

Consider Also The Following:
  • U.S Personal Income rose over 5% in March 2011 compared to the same month in 2010.
  • Employment at U.S child care facilities rose 1% in Feb. 2011 compared to the same period in 2010. This followed a 1.3% increase in January.
  • Overall U.S employment rose .7% in January and 1% in February.
  • Total revenue in the United States for child care services rose over 6% in the last quarter of 2010 compared to the same period in 2009.
  • The price of crude oil, which has an effect on the energy costs of child care facilities, rose 32% in the first week of May 2011 compared to the same week in 2010.

Employment (which is an indicator of demand) and revenue are rising. These are key indicators considering when more people are working that means more people need to send their kids to daycare which should  lead to increased demand for daycare & nursery school placement.

We hope you found this information helpful.  Of course none of this information is relevant if your facility suffers a loss that is not fully covered by your nursery school Insurance child care insurance and day care insurance . Contact Risk Advisor or visit our website at  Metropolitan Risk Advisory for a free coverage analysis. Chances are this review is years over due.