New Jersey's Nonprofit Community
- 40,000+ 501(c)(3) organizations in NJ
- NJ 501(c)(3)’s employ 330,000 people (pre-COVID) – nearly 10% of the state’s private sector work force and more people than many major industries including construction, utilities, transportation, finance and insurance.
- Over $50 billion in annual expenditures (pre-COVID) by NJ 501(c)(3) organizations – much of it within the Garden State
- More than 80% of reporting NJ 501(c)(3) public charities have budgets under $500,000
- Over 1.8 million people volunteer at New Jersey nonprofits annually, providing over 225 million hours of service valued at more than $5.3 billion.
- “Nonprofit” doesn’t mean “no profit.” Like any business, a nonprofit CAN – and, indeed, should – retain year-end surpluses and cash reserves in order to remain financially healthy. The surpluses must be devoted to the organization’s exempt purpose.
- And like any successful business, charities must invest in their own infrastructure (technology, planning, R&D, professional development) in order to be sustainable. Charities that skimp on these items are LESS effective, starving themselves of strategic resources necessary to do their work. Overhead or administrative expenses such as audits, insurance, facility maintenance, etc., are important to ensuring organizational safety, compliance and accountability.
Data Sources: IRS Business Master File of Exempt Organizations; DataLake LLC Nonprofit Research; Corporation for National & Community Service; Bureau of Labor Statistics; Independent Sector; and Johns Hopkins University
New Jersey Nonprofit Issues/Trends (2023)
- Although the state’s nonprofit organizations have experienced improvements in their circumstances since the worst of the pandemic in 2020, a number of significant challenges persist.
- Demands for services and rising expenses are still outpacing funding – a longstanding problem with deep ramifications for delivery of programs and services in our communities. Nearly four–fifths (78%) of surveyed nonprofits reported that demand for services rose in 2022, but only 51% said that their funding increased in the same period. Similarly, 84% expect demand for their services will rise in 2023 and 82% are projecting increased expenses, but only half (52%) expect that their funding will increase.
- Nonprofits are struggling with significant workforce shortages that threaten their ability to meet community needs. More than half (53%) of nonprofits with employees reported that they had staff shortages, with an average vacancy rate of 19%. The biggest obstacles to filling vacancies included difficulty offering competitive compensation due to budget constraints or lack of funding; trouble recruiting credentialed employees for positions that require them; and competition for employment from other sectors.
- Advancing diversity, equity, inclusion and belonging as a permanent and intentional priority of all aspects of nonprofit work remains critically important. Nonprofits that primarily served communities of color were more likely to be engaged in front–line services such as human services and health, where rising demand for services and increasing expenses are especially acute.
Top issues affecting individual organization viability (aside from funding):
- financial uncertainty (44%)
- the need for a stronger board (44%)
- need for better branding or communications (37%)
- need for strategic planning (33%)
- cannot afford enough good staff (33%)
- increased benefits/insurance costs (30%)
- low organization visibility (30%)
Top issues affecting nonprofit sector viability in the coming decade:
- nonprofit infrastructure/capacity building (51%)
- foundation/corporate funding (49%)
- attracting/retaining capable, committed board members (45%)
- attracting/retaining qualified workers (41%)
- giving and volunteering incentives (34%)
- diversity/inclusion/equity within nonprofits (31%)
- federal funding/federal budget (31%)
Source: New Jersey Center for Nonprofits, New Jersey Nonprofits: Trends and Outlook 2023
NATIONAL NONPROFIT INFORMATION:
National Council of Nonprofits
National Center for Charitable Statistics
Johns Hopkins University Center for Civil Society Studies
Nonprofit Economic Data Project (active 1999-2021)