New Jersey & Non-Profit Orgs

New Jersey

New Jersey was once the place to be, am I right?

The beaches and boardwalks with great fishing and crabbing spots. Philly and NYC within a few hours’ drive. The mountains up north and the pine barrens in the south.

But we also have to deal with Phil Murphy and a litany of laws, Constitutional and statutory. This is now an area of intense interest for us all. In this post, I will share NJ-specific information regarding non-profits.

First, non-profit organizations can exist as either incorporated or unincorporated. While there are advantages to being incorporated, there also may be certain disadvantages, such as filing fees and annual filing requirements. Your organization needs to do research or talk to professional advisors concerning whether incorporation is advisable for your particular organization. See this publication for more information.

In New Jersey, to have a non-profit organization, we must have a minimum of 3 trustees or board members.

The majority of the board members must be unrelated and uncompensated so the Board can vote on salaries of anyone (the total number of unpaid officers must be more than the total number of paid officers to avoid personal inurement). For example, if you have 3 trustees, 2 will be uncompensated and 1 can receive compensation.

There is a laundry list of organizations that meet that definition, some of which are cited in the New Jersey statutes. Other requirements include not issuing stock, having at least 3 trustees over the age of 18 and having a registered agent in New Jersey. For organizations contemplating 501(c)(3) status, the primary purpose should:

  • be for religious, charitable, educational, literary, scientific testing, public safety, fostering national or international sports competition, or prevention of cruelty to children or animals.
  • benefit the broad public or a broad class of individuals to be eligible for 501(c)(3) status.

If you are looking at 501c3 status for your organization in New Jersey, this is an excellent first resource.

For more in depth, tax-related information from the State of NJ, head over to this website.

Quick Pros and Cons on 501c3 Organizations in New Jersey


■ As a separate legal entity, incorporation inserts a legal buffer between the corporation and the trustees, officers, members, or other individuals. The assets at risk in a lawsuit or claims of creditors are the corporation’s, not the personal assets of the individual trustees, officers, volunteers, etc.

■ New Jersey non-profits are exempt from New Jersey corporate income tax.

■ Non-profit organizations may be exempt from property taxes on all or part of their real property.

■ Incorporation frequently elevates an organization’s status in the eyes of potential donors and the public.

■ Non-profit 501(c)(3) organizations are exempt from federal income taxes on income related to the organization’s exempt purposes.

■ Non-profit 501(c)(3) organizations are exempt from federal unemployment taxes.

■ Non-profit 501(c)(3) organizations may collect tax deductible contributions, which may greatly facilitate fundraising. Non-profit 501(c)(3) status is often required to receive grants from private foundations as well as government grants and contracts.

■ Non-profit 501(c)(3) organizations and certain others may file for a New Jersey state sales tax exemption certificate.

■ Non-profit 501(c)(3) organizations may be eligible for reduced postal rates.


■ If individual control and autonomy over the corporation are important, non-profit status is not for you. Non-profits are not “owned” by individuals or stockholders, and the CEO’s employment is subject to the pleasure of the board.

■ Apart from the time and energy you’ll expend in planning your new organization, it costs time and money to incorporate and meet the subsequent filing requirements.

At the state level:

■ The incorporation filing fee is currently $75.00 (you should budget $115.00, which includes expedited service and a certified copy).

■ Most organizations are subject to registration and annual reporting requirements with the New Jersey Department of the Treasury, Division of Revenue, and the New Jersey Office of Charities Registration (certain religious organizations qualify for a $5.00 incorporation fee and exemption from annual reports and charities registration; organizations that raise less than $10,000 in annual contributions are exempt from mandatory charities registration filing if they do not use a professional fund raiser, although they may file voluntarily).

■ New Jersey requires a certified audit when gross revenues exceed a certain amount (currently $500,000). This requirement may necessitate budgeting for attorney or accountant fees.

■ There may be additional state filing requirements if soliciting contributions or doing business outside of New Jersey (this is usually called a “foreign” corporation in the secondary state).

While this article is not exhaustive, we hope it serves as a springboard in helping you find which structure is best suited for your mission.

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