Nonprofits are facing skyrocketing healthcare costs, shifting regulations, and tough choices. Here’s what three experts say about navigating this storm without losing sight of your values.
If you work in the nonprofit sector, you’ve probably felt the squeeze between rising healthcare costs, shifting rules, and ever-tightening budgets. At the January Social Impact Advisor Network meeting, three experts shared candid insights on what’s happening and what leaders can do about it.
Our panelists were:
Amrit Dhaliwal, founder and president of Finn Consulting, a group health benefits broker/advisor to business owners, executives and HR professionals
Ezra Herzog, founder and benefits advisor at Raise Insurance Solutions, which helps businesses and nonprofits with strategic employee benefits services
Caitlin Chan, executive director of Legal Assistance for Seniors, which provides free legal representation and advice, health insurance counseling, and community education to qualified seniors.
And our moderator was:
Maya Tussing, co-founder of Fairlight Advisors, which provides investment management and financial advisory services to nonprofits
The Big Picture: Costs Aren’t Just Rising — They’re Soaring
Ezra Herzog didn’t mince words: “Healthcare costs have gone up every single year since I started in 2010,” he said. “Smart nonprofits budget for a 10% annual increase — and even that feels optimistic. It’s unsustainable.”
The problem isn’t just inflation. Recent policy changes have made things harder.
“When subsidies from the [Affordable Care Act] disappeared last year, many employees who relied on them suddenly needed employer-sponsored coverage,” Ezra explained. “That shift hit nonprofits hard.”
His advice? Stop treating healthcare as a last-minute renewal task. “This isn’t just a line item — it’s a strategic initiative,” he emphasized. “Think retention, think well-being, and start planning early. And don’t forget, this is a marketing conversation with your employees. They need to understand what’s happening and why.”
Amrit’s Take: Location Matters — and So Does Personalization
Amrit Dhaliwal brought a different lens: geography. “California is like a country of its own,” she joked. “But if you’re hiring in Alaska or New York, the per capita costs can be way higher.” With remote work expanding, nonprofits need to factor in state-specific rules and access to care when building benefits packages.
She also pointed out that healthcare inflation is outpacing everything else. “Healthcare is way above the inflation curve,” Amrit said. “Organizations are hiring out of state to save on salaries, but they forget about the hidden costs in benefits. It’s not always cheaper in the end.”
Looking ahead, Amrit sees a shift toward personalized and preventive care. “We all have a 23andMe login now,” she said. “People want to jump ahead of health risks. Wellness checkups, screenings, predictive tools — these will be front and center.”
Her advice? Encourage employees to use preventive benefits and stay proactive. “I cannot stress enough about the wellness checkups that you have at 100% covered cost through your insurance. Please do that every 12 months.”
Caitlin’s Reality Check: Tough Choices, But Values Matter
For Caitlin Chan, the challenge is balancing skyrocketing costs with mission-driven priorities. “We’ve had to make painful decisions, including layoffs,” she shared. “But cutting health benefits? That’s not on the table. How could we expect our employees to care for clients if we’re not caring for them?”
Her organization, Legal Assistance for Seniors, serves older adults in Alameda County. They’ve seen a surge in calls as Medicare and Medi-Cal rules shift. “It’s very scary for folks to hear on the news that something might be happening,” Caitlin said. “They don’t know if it’s proposed, if it’s real, or how it affects them.”
As an employer, Caitlin faces the same pressures as everyone else. “We’ve made every other trade-off to keep folks,” she said. “But this is, unfortunately, a time of trying to right-size the organization. Health benefits are not something we can reduce. We’d lose people to the private sector, and we can’t afford that.”
Her message to nonprofit leaders: face the hard realities now. “This is the time to make changes that felt politically impossible a few years ago,” she said. “Lean on advisors, dig deeper, and stay true to your values.”
Key Takeaways for Nonprofit Leaders
- Start early: Healthcare planning isn’t a February renewal task — it’s a year-round strategy.
- Communicate clearly: Rising costs are confusing. Help employees understand what’s happening.
- Think beyond California: Remote hiring means navigating state-specific rules and costs.
- Invest in prevention: Encourage wellness checkups and personalized care.
- Stay mission-aligned: Benefits aren’t just perks — they’re essential for retention and impact.
Looking Ahead: What’s Next?
Amrit predicts more personalized care and preventive strategies. “Anything that’s predictive and preventive will be at the forefront,” she said. “We’re moving toward a world where people want to catch health issues early.”
Ezra, ever the strategist, sees opportunity in the chaos. “The system is broken,” he said bluntly. “The only way to navigate this is through a trusted advisor. Transform insurance from a confusing cost center into a strategic advantage.”
And Caitlin reminds us of the human side: “It’s better to face these realities now than kick the can down the road,” she said. “Our employees are the heart of our mission. We have to take care of them.”
Healthcare isn’t getting simpler, but with the right strategy — and a commitment to your people — nonprofits can navigate this storm. The question isn’t whether costs will rise. They will. The question is: how will you respond?
Social Impact Advisor Network
