Watching the Backs of New Jersey Nonprofits

July 16, 2012

Center for NonProfits Logo

Last week, the Council of New Jersey Grantmakers board received a briefing from Linda Czipo, executive director of the Center for Non-Profits. Linda shared some data about the nonprofit sector, the the findings of the Center’s annual survey of the nonprofit sector in New Jersey, and provided an overview of policy/regulatory issues that have come up for the nonprofit sector recently.

As you can imagine, we were all fascinated to learn about the size and scope of New Jersey’s nonprofit community:

  • 30,000 501(c)(3) organizations in NJ
  • 304,000 employees representing 9.7% of the state’s private work force (more than the construction, transportation, public utilities, finance and insurance industries)
  • $33 billion in expenditures annually
  • 1.5 million volunteers in the state putting in 160 million hours of service each year, equivalent to $3.4 billion

We were also really surprised by some of the survey findings. In answer to the question about the biggest challenge directors are facing for their own organization 49% responded the need for a stronger board. And when asked about the biggest challenges they see for the nonprofit sector’s viability 58%, the largest response, was attracting/retaining qualified board members. These are very different and very telling responses as to how the needs of our field are shifting. Boards are critically important and that is really sinking in. Yes, a strong, competent CEO is essential but the strength and effectiveness of the board is what can make or break it for an organization. And as we’ve seen the recession hang on, eroding the reserves of agencies and organizations (both financial and emotional) it points to the power and importance of the board. There are several foundations in New Jersey that have been working to help their grantees with board effectiveness, the Dodge Foundation being high on the list along with the Victoria Foundation and Prudential Foundation.

Board members’ roles also seem to be evolving. As organizations are called on more and more to be advocates, it means the trustees have to become savvy about policy and politics. It is remarkable how some simple little statement that gets included by a legislator in a bill can have a profound, unintended impact on an entire sector. Or a regulation that is introduced and seems like an easy adjustment actually can have a deep, negative impact. And then there are the big issues like protecting advocacy rights or a city suddenly requiring property tax payments. Linda shared with us a number of real and potential threats that the Center for Non-Profits has been tracking and advocating on behalf of the sector.

Last year, the Center led a highly successful mobilization effort to defeat a proposal from the NJ Division of Consumer Affairs that would have basically required charities to discourage donors from giving unrestricted gifts. If you read my last post on the Dodge Blog, you know this is a big issue as far as I’m concerned. Unrestricted money is the life blood of any nonprofit organization. The suggestion that funders or individual donors should only give project support is horribly shortsighted. The Division’s proposal not only placed significant administrative burdens on charities but it propagated the uninformed and wrong-headed belief that indirect costs are inherently bad and don’t support an organization’s charitable purpose.

This spring, the Center led another successful effort to remove nonprofits from a highly burdensome legislative proposal, intended for quasi governmental agencies, related to open meetings and records. Just because a nonprofit receives government grants or contracts does not mean it should be treated as an arm of government or be subject to the same requirements as a government agency. These are private organizations after all. It’s also worth noting that these types of proposals rarely attempt to impose similar requirements on for-profit businesses with government contracts.

For those of us who work in, work for, donate to and are served by nonprofit organizations in New Jersey we are fortunate to have the Center for Non-Profits watching our backs and protecting our independence.

For more information on the Center for Non-Profits, see their website here.

Nina Stack is President of the Council of New Jersey Grantmakers, the statewide association of more than 120 funding organizations working in New Jersey. She also serves as Chair of the Forum of Regional Association of Grantmakers, a 33-member network serving more than 4,000 foundations, corporations and other donors across the country.