Nonprofits benefit from diversity. Whether that diversity is shown in different races, politics, religions, or backgrounds, it brings various viewpoints and ideas to the forefront. New Jersey is known for welcoming that diversity.
When you start a nonprofit in New Jersey, you add to the cornucopia of organizations that call the state home.
Before that, you need to go through the cumbersome task of building the organization from the ground up. We want to help walk you through the process of creating a nonprofit in New Jersey. By following the eleven steps listed below, you can spend less time on tiny details and more time building an organization that can both benefit from and add to the diverse culture of New Jersey.
- Name Your Organization
- Name Incorporators and Directors
- Appoint a Registered Agent
- File New Jersey Articles of Incorporation
- Apply for an Employer Identification Number
- Hold Organization Meeting and Establish Nonprofit Bylaws
- 501(c) Federal Tax Exemption
- Apply for New Jersey State Tax Exemption
- Register for Charitable Fundraising
- Apply for Necessary New Jersey State Business Licenses
1. Name Your Organization
While naming your organization may seem easy, it can be more complicated than you think. Choosing a name can be a personal choice, especially if your organization’s purpose is your passion. In New Jersey, there are only a few rules to follow when choosing a name.
Your nonprofit’s name should include one of the following:
- a New Jersey nonprofit corporation.
Your name must also be different from other organization names listed with the state. Visit the New Jersey Division of Revenue and Enterprise Services to see if your name is available.
2. Name Incorporators and Directors
An Incorporator is a person who signs your organization’s Articles of Incorporation. Directors will be the leader of your nonprofit’s board and organization. Each of these positions is necessary when starting your nonprofit, but your directors will choose your organization’s path for years to come.
Your Incorporator must be at least 18 years old but does not have to be a US Citizen or New Jersey resident.
Your Board of Directors must have a minimum of three unrelated individuals. Each member must be at least 18 years old, but there is no residency or membership requirement in New Jersey. Board member terms are for one year, and each board committee must include at least one board member.
Your board is the first place your organization can show diversity. When choosing board members, your organization can find members of different races, sexes, and religions. You should also do your best to include members with diverse backgrounds to bring various experiences and ideas to the organization.
New Jersey also has requirements for board officers. In the state of New Jersey, nonprofit organizations must have a President, Secretary, and Treasures on their board of directors. Two of these roles can be held by the same individual, but the same person cannot sign official documents that ask for two officer signatures.
Many nonprofits choose to elect three different individuals to these roles along with a Vice President to make sure the board is prepared for its leadership role. The IRS, grant foundations, and major donors will make decisions about your nonprofit based on your board of directors. Visit our blog to read more about how you can build a strong board for your organization.
3. Appoint a Registered Agent
A Registered Agent is required for all nonprofits in New Jersey. This role can be filled by an individual or an organization with a physical office in the state and is available during regular business hours. Your Registered Agent will receive all official correspondence for the organization. A registered agent should have a mailing address to receive all legal correspondence.
4. Apply for an Employer Identification Number
In New Jersey, it is best to apply for your Employer Identification Number (EIN) before filing with the state.
The IRS assigns all corporations an EIN to use when applying for tax-exempt status, hiring employees, and opening a bank account. You can apply for your EIN online, by fax, or by mail with Form SS-4. You will receive your number immediately online, within four days if applied by fax and four to five weeks if applied for by mail.
There is no fee to apply for your EIN with the IRS.
5. File New Jersey Articles of Incorporation
All businesses must be registered in New Jersey. You need to file a Certificate of formation online with the state of New Jersey. There is a $75 nonprofit filing fee for the New Jersey Articles of Incorporation. You can expedite this form with an additional $15 fee. Organizations must register 15 days before opening. It will generally take four weeks to finalize your registration.
You will need to enter the following:
- Type of Business Entity: nonprofit
- Business Purpose: use the same wording in your 501c3 form
- Stock: no entry
- Management: three trustees
- Business name and address
- Registrar’s name and address
6. Hold Organization Meeting and Establish Nonprofit Bylaws
Nonprofit boards are a huge player at the start of your organization. Once you have filed your Articles of Incorporation and received your EIN from the IRS, it is time for your board to start playing their role.
Your board meetings need to run efficiently to achieve all you have planned. Create a meeting agenda before the meeting, print it for all members, and follow this agenda during the meeting to stay on track. Remember to also take minutes during each board meeting. Learn more about running an effective nonprofit board meeting.
At the first board meeting, your board will elect all members and officers, along with finalizing and voting on your organization’s bylaws and conflict of interest policy. Bylaws are the foundation of your nonprofit. They will include your purpose, board and member details, additional committees, and the executive director’s role in the organization.
A conflict-of-interest policy is necessary to define how board members and other individuals involved in your organization’s leadership can act. No one in these roles should be able to harm the organization for their own benefit.
Remember to keep minutes of your board meetings.
Once the bylaws, board elections, and conflict of interest policies are finalized, you can move on to applying for your tax-exempt status with the IRS.
7. 501(c) Federal Tax Exemption
Registering as a nonprofit in the United States means your organization is tax-exempt. This step is essential, so you will not want to skip it.
The IRS has made it easy to register online. If you are a new organization that will not raise more than $25,000 in the first year, you can fill out Form 1023EZ and pay $275. It should take less than one month to receive your letter of determination.
There are a few requirements for this form, so be sure to check out the eligibility worksheet to see if your organization qualifies.
If your organization does not qualify, you will need to fill out IRS Form 1023 and pay the $600 fee. This form will generally take three to six months for your letter of determination.
8. Apply for New Jersey State Tax Exemption
Nonprofits need to finish their registration with the state of New Jersey for tax purposes. This is important for employee payroll taxes, contracts with state governments, colleges, local school boards, and state grants and tax credits.
Nonprofits that do not qualify for tax-exemption will need to fill out Form NJ-REG.
All other nonprofits should file Form REG-1E after receiving your letter of determination from the IRS.
There is no fee for either registration, but it must be done within 60 days of initially filing your business with the state, so be aware of the time.
9. Register for Charitable Fundraising
All New Jersey nonprofits must register with the Attorney General before soliciting donations in the state every year.
Nonprofits will file Form CRI-200 if they expect to receive less than $25,000 or Form CRI-150-I. In addition to these forms, you will also need your IRS Form 990, and a certified audit amended bylaws, and any additional IRS information if necessary.
There is also a fee to file these forms with the state:
- $30: under $25,000
- $60: $25,001 – $100,000
- $150: $100,001 – $500,000
- $250: over $500,000
For more information on this filing, visit the New Jersey Consumer Affairs Charities Registration Section.
10. Apply for Necessary New Jersey State Business Licenses
Many nonprofits hold raffles, bingo nights, or other charity games to raise funds. It is one of the easiest fundraising events to run and can make a difference to your bottom line.
In New Jersey, you need a license for these games. Visit the New Jersey Division of Consumer Affairs for more information on how to obtain a license for these games.
Now that you have finalized all the paperwork with the state and IRS, you are ready to change the world. Your organization will join a diverse group of nonprofits in New Jersey and make a difference on a local, national, or international level.
As a nonprofit founder, your next steps will involve crafting your vision statement, establishing your organization’s values, and march toward your nonprofit mission. In all your meaningful endeavors, we wish you good luck!
At Donorbox, we strive to bring you useful fundraising tips and other nonprofit resources. Head over to our blog to find more!
And finally, if you want to learn how Donorbox can add value to your nonprofit, check out Donorbox features being used by thousands of nonprofits to raise funds every day!
Starting a Nonprofit in New Jersey — FAQs
1. How Long Does It Take to Start a New Jersey Nonprofit?
Articles of Incorporation: 1-2 days online
- The mailing will take a few weeks
- In-person or by fax – Expedited fees of $1,000 for 1 hour
- In-person or by fax – Expedited fees of $500 for a 2-hour
IRS Form 1023EZ: under 1 month
IRS Form 1023: 3 to 6 months
2. Is a New Jersey Nonprofit Registered Agent Required?
All New Jersey nonprofits must have a Registered Agent to receive official correspondence from the state.
3. Does a New Jersey Nonprofit Need a Business License?
Nonprofits who wish to hold raffles, bingo nights, or other charity games will need a business license from the Division of Consumer Affairs.
4. How Does My Nonprofit Register for New Jersey Tax Accounts?
Nonprofits that do not qualify for tax-exemption must file Form NJ-REG to finish registering for New Jersey Tax Accounts. This is critical for employee payroll taxes, contracts with state governments, colleges, local school boards, and state grants and tax credits.
5. Do I Have to Register My Nonprofit as a Charity in New Jersey?
You need to register as a charity with the Attorney General’s office before soliciting funds. You must register each year with the state and pay fees depending on the amount you raise.