Thank you to Debbie Duncan, Director of Member Services at the Center for Non-Profits, for presenting the webinar: Non-Profit “Dos and Don’ts”.
The NJ Center for Non-Profits is the umbrella organization for all New Jersey 501(c)(3)s. Their mission is “to build the power of New Jersey’s non-profit community to improve the quality of life for the people of our state.”
Debbie provided a wealth of information related to non-profit governance, board responsibilities, ways non-profits can develop their resources, and key issues currently facing NJ non-profits.
What is a Non-Profit?
Debbie began her presentation by addressing some misconceptions about what a nonprofit can and cannot do.
- Are charities permitted to charge fees for services? – Yes
- Are charities permitted to carry a surplus of funds from year to year? – Yes
- Are charities permitted to have paid staff? – Yes
- Are charities permitted to lobby for legislation? – Yes (with limitations)
- Partisan activity is prohibited – Non-Profit Organizations CAN Lobby
- Do non-profits need an annual audit? – Sometimes (this depends on a number of factors, including annual budget size)
She then looked at what it means to be a “non-profit” at the state-level and a “tax-exempt” entity at the federal-level. She also reviewed the various 501(c) designations made by the IRS, explaining that only contributions to 501(c)(3) organizations are tax deductible.
What regulations govern New Jersey non-profits?
Debbie provided an overview of the common reporting requirements non-profits have at the state and federal level.
Basic Filing & Reporting Requirements for Non-Profits
Debbie then went on to summarize some regulations in NJ Statute Title 15-A, the statute that governs nonprofit corporations in NJ. These include that a nonprofit corporation must have:
- a minimum of 3 trustees, who are 18 or older and serve a term of 1-6 years
- a “registered agent” in NJ
- articles of incorporations and bylaws that govern the organization
- a President, Secretary, and Treasurer
- elections held every 2 years
What are the responsibilities of a non-profit’s board?
As Debbie emphasized, no one owns a non-profit corporation. A non-profit’s board of trustees is responsible and accountable for all aspects of its operation.
Debbie recommended that all trustees be aware of:
- The IRS Requirements for non-profits
- NJ Statutes governing non-profit corporations – Title 15A: New Jersey Nonprofit Corporation Act
- Federal and State Reporting Requirements
- The non-profit’s articles of incorporation – request a copy through NJ’s Division of Revenue and Enterprise Services
- The non-profit’s bylaws
How can non-profits develop their resources?
In terms of financial resources, Debbie described a variety of revenue streams including individual donations, corporate funding, foundation grants, and government grants/contracts.
Debbie also emphasized how fees for service income can be a major source of revenue for nonprofits. See the graph on page 19 of the following National Council of Nonprofits report:
In terms of human resources, Debbie discussed the importance of staff and volunteer development, the use of in-kind gifts, and how nonprofits can partner to share services.
Visit the Center for Nonprofits website to learn more about:
View the presentation’s slides (PDF)
More nonprofit-related resources are available at the New Jersey State Library through our Funding Information Center.
