By: Avi D. Kelin
The State of New Jersey requires any charitable organization that solicits donations from New Jersey residents to register with the Division of Consumer Affairs within the Attorney General’s office.
This requirement has often caused confusion because New Jersey’s definition of charitable organization is broader than that of the IRS—while a charitable organization under the IRS definition is limited to a 501(c)(3), New Jersey’s statute for the purpose of this registration defines a charitable organization broadly to include both tax-exempt entities active as 501(c)(3) charitable organizations and also 501(c)(4) social-welfare organizations.
Now, Attorney General Grewal and the Division of Consumer Affairs, perhaps recognizing this confusion and citing lowered registration rates for 501(c)(4)s, have announced a temporary voluntary compliance program for 501(c)(4) organizations that have not previously registered with the Division of Consumer Affairs in accordance with the statutory requirements. For any 501(c)(4) that has never registered with the Division of Consumer Affairs, the Attorney General has agreed to forego collection of any penalties provided that the required documentation is filed by October 1, 2020.
501(c)(3) organizations are not currently eligible for this voluntary compliance program. Similarly, 501(c)(4)s that previously registered with the Division of Consumer Affairs but has failed to comply with annual reporting requirements are not eligible.
The specific registration requirements (and whether registration is required at all) depends on a number of factors, including the gross annual revenue raised by the organization, with higher-revenue entities subject to more robust reporting (including, in some cases, the filing of an independent auditor’s report).
To determine whether your 501(c)(4) may have New Jersey reporting requirements and whether it is eligible to participate in this voluntary compliance program, please contact Rebecca Moll Freed via email here or Avi D. Kelin via email here or call 973.533.0777.