Tips for Starting a Nonprofit in New Jersey

Apr 12, 2024 

Disclaimer: Although we do not provide legal advice, we can assist you with your filings and corporate documents and help you apply for 501(c)(3) status under the Internal Revenue Code (IRC). Visit our service pages to learn more about what Pearl Solutions can offer. 

You see a problem that needs addressing, and you want to be part of the solution. More specifically, you have an idea for a nonprofit organization that could make a real impact. 

But how exactly do you create a mission-driven organization? How do you go from idea to impact? 

The first thing you need to do in order to turn that dream into reality is learn about the state and federal guidelines governing nonprofit organizations. This is true regardless of whether or not you want to make an impact on the local, state, national, or international level. 

Why is that? Well, in order to establish a nonprofit organization, you have to follow a certain set of steps at the state and federal level. The Internal Revenue Service (IRS) explains the role the state government and federal government play in the process

“State law governs nonprofit status, which is determined by an organization’s articles of incorporation or trust documents. Federal law governs tax-exempt status. The Internal Revenue Code (IRC) specifically refers to exemption from federal income tax.”

The process of obtaining nonprofit status varies from state to state. For example, some states require that founders submit more paperwork; some states require less. In this post, we provide an overview of the steps you need to take when starting a nonprofit in the state of New Jersey

Initial Steps

After researching the various types of organizations you could form, you decided to create a New Jersey nonprofit with 501c3 or 501(c)(3) tax-exempt status

To organize a business in New Jersey and apply for nonprofit status, you must: 

  • Plan
  • Draft organizing documents
  • Apply for a Federal Employer Identification Number (FEIN)
  • Apply for federal exempt status (if required or desired)
  • Comply with Charities Registration requirements
  • Consider applying for sales and use tax exemption

In this post, we walk you through these initial steps: 

  1. Choosing a business name
  2. Organization and filing
  3. Creating bylaws and articles of incorporation
  4. Selecting a board of directors

Keep reading to learn more about each step. 

Tip: If you have more questions, this Q&A from the Department of the Treasury’s Division of Taxation may have the answers. 

Choosing a Business Name

Before you can establish your nonprofit, you need to choose a business name. You have a decent amount of flexibility when choosing a name, but New Jersey does have a few stipulations. In New Jersey’s statutes, you’ll find information on what is required and what the restrictions are.

When deciding on a name, it may be helpful to use the state’s business name availability tool or business formation online service

Organization and Filing

Most likely, you have already decided to incorporate, but it’s worth mentioning that New Jersey doesn’t require you to incorporate your nonprofit. Founders who incorporate their nonprofits usually do so in order to limit their liability and qualify for tax-exempt status. 

If you do choose to incorporate, you need to file a Certificate of Incorporation with the New Jersey Division of Revenue, Corporate Filings Unit or the Public Records Filing for New Business Entity form and pay any associated filing fees. As of March 2024, the fee is $75. 

The Public Records Filing for New Business Entity form is in the New Jersey Complete Business Registration Package available from the Division of Revenue. The supporting documents you submit will include information on your organization’s purpose and other nonprofit provisions.

Most 501(c)(3) organizations are required to register with the New Jersey Charities Registration Section. They usually require that you submit a completed and signed registration form, registration fee payment, IRS Form 990 and certified audit, amended formation document, and any IRS correspondence reported during that fiscal year. 

Tip: Always confirm that you’re filing the most updated version of a form. New Jersey’s Department of the Treasury has more information about getting registered and starting a nonprofit

Creating Bylaws and Articles of Incorporation

Your bylaws are simply the rules that govern your nonprofit. Your board of directors or trustees must follow them when running the nonprofit. These are generally voted on by the members at the first board meeting. 

The articles of incorporation usually include things like the name and address of your registered agent, your business name, and the purpose of your business. You can file your Certificate of Incorporation online. This form may also be called a Certificate of Formation or Certificate of Authorization. 

Selecting a Board of Directors

New Jersey requires that you have at least three members on your board of trustees or board of directors. These members hold the positions of Treasurer, Secretary, and President. You can have up to ten members on your board. 

You have to choose the members early in this process because you’ll need to list their names and addresses on some of the forms you’ll file. 

Legal Requirements

Like every state, New Jersey has legal requirements for nonprofits. You will also have to submit certain documents and abide by certain statutes to receive and maintain tax-exempt status. 

Registering With the State of New Jersey

The state of New Jersey requires you to register your business. In order to do so, you will file your certification of authorization or incorporation and then file that certificate online. 

Applying for Tax Exemption With the IRS

To apply for tax-exempt status, you need to file certain forms with the IRS. 

Obtaining a Federal Employer Identification Number (FEIN)

New Jersey requires every business to have a Federal Employer Identification Number (FEIN) to operate in the state. You will also need this number to open a bank account in your nonprofit’s name. To get your FEIN, you will file an online form (Form SS-4) through the IRS

Compliance and Reporting

Annual Reporting Requirements

At the federal level, nonprofits must file an annual exempt organization form (Form 990). Some nonprofits will have to file additional reports with the IRS. 

At the state level, New Jersey requires that nonprofits file an annual report if they are incorporated or required to register with the New Jersey Charities Registration Section. The New Jersey Division of Revenue, Corporate Filing Unit will send you this form.

Maintaining Tax-Exempt Status

In addition to applying for and receiving tax-exempt status, you will need to maintain that status. The IRS provides information on ongoing compliance

Keeping Up With Legal Documents and Filings

We recommend that you consult with legal and tax professionals who are based in New Jersey or familiar with New Jersey statutes. They should be able to advise you on keeping up with all state and federal filing requirements.

Fundraising and Financial Management

Setting Up Bank Accounts

If you choose to set up a bank account, the bank will ask you for your business name, its FEIN, and information about your registered agent. Your bank may ask for additional documentation confirming your nonprofit status. 

Developing a Fundraising Plan

Before you start the process of fundraising, you should develop a comprehensive fundraising plan for the nonprofit as a whole and for individual fundraising campaigns or events. Your plan will include your goals and the strategies you’ll use to achieve or surpass them, as well as any associated costs. 

Managing Finances and Expenses

Your board will determine how often you create and approve an annual budget and how the nonprofit’s funds are allocated. The Treasurer is usually responsible for managing the budget over the course of the year. 

Your organization will also track things like individual donations and details of any grant funding you receive.

Certain nonprofits are specifically listed as exempt under the New Jersey sales and use tax law: volunteer fire companies; rescue, ambulance, first aid, or emergency companies or squads; veterans’ organizations and their auxiliaries; and associations of parents and teachers of an elementary or secondary public or private school. 

Resources and Support

Utilizing Online Tools and Resources

There are a number of online tools and resources you can utilize as you navigate the process of creating a New Jersey nonprofit. 

These online tools and resources include: 

Seeking Professional Assistance

This post provides a brief overview of the initial steps you need to take in order to create a nonprofit in New Jersey. It’s not intended to offer legal or financial advice. 

To ensure you’re in compliance with New Jersey’s laws and federal laws, you should seek assistance from legal and financial professionals who work in New Jersey and are familiar with this process.

Networking With Other Nonprofits

You can start a nonprofit by yourself, but we encourage you to reach out to other people running nonprofits in New Jersey to learn from their experiences. You may get insights that you can’t find online and save yourself time, money, and other precious resources. 

Conclusion

Once you’ve completed your research and made decisions about your name, organization structure, and board of trustees, you can start the process of creating a New Jersey nonprofit. 

If you’re looking to apply for and win a world-changing grant, we’d love to support you. Learn more about the grant proposal writing services we provide at Pearl Solutions. 


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