TRENTON – The Senate Commerce Committee today advanced a bill sponsored by Senator Nellie Pou and Senator Linda Greenstein that would revise the thresholds in current law for charitable organizations to submit audited financial statements, and would also delay annual reporting requirements due to the COVID 19 pandemic.
The bill, S-844/A-4635, would exclude non-monetary in-kind donations from counting as gross revenue for purpose of financial reporting requirements, before triggering the requirement to submit an audited financial statement. In its practical effect, the bill would modify how in-kind donations directly related to the purpose or mission of a charitable organization– such as food for food pantries or basic supplies for shelters – are to be counted, thus excluding them from gross revenue for purposes of determining if the $500,000 threshold for reporting is reached.
“Our food banks, soup kitchens and homeless shelters perform an invaluable service, especially in our most impoverished neighborhoods. These non-profits and other charitable groups should be able to focus their energies and resources on their mission to serve those in need, without being distracted or having to worry about providing detailed audited financial statements,” said Senator Pou (D-Passaic/Bergen).
“We all know the life-saving and life-changing work that charitable organizations across New Jersey do every day. They fill the gaps that governmental and private institutions can’t always address throughout our communities,” said Senator Greenstein (D-Mercer/Middlesex). “This bill will provide non-profits flexibility in reporting their financial statements, and also give them relief from time constraints due to extra burdens brought on by the COVID-19 pandemic. Moreover, the legislation will allow them to concentrate on their core missions and to operate more efficiently during these trying times.”
The New Jersey State Bar Association issued the following statement in support of the bill:
“This legislation would increase the filing threshold for an audited statement while excluding in-kind contributions. This would be an appropriate lessening of the regulatory burden on not for profit companies, which often have limited staff and resources.”
The bill was released from the Senate Commerce Committee, by a vote of 4-0.