Let’s be clear, passing legislation that would allow a state-level charitable giving deduction — a motion that continually passes in the state Senate but stalls in the General Assembly — would be a big boost to the state’s larger-than-you-realize nonprofit sector.
That’s why it was a call to action Wednesday at the NJ Center for Nonprofits’ annual event that drew a sold-out crowd of more than 700 to the Palace at Somerset Park in Somerset.
But, this also is true: The exemption, which undoubtedly would lead to more donations, is just one of the challenges the sector faces.
Yes, the pandemic appears to be behind us. But the needs of the nonprofits that were celebrated for doing so much good during that time of crisis are still present.
So said Linda Czipo, the highly regarded CEO who has led the NJ Center for Nonprofits for more than two decades.
“The demand for our services continues to go up — and resources needed to meet that demand are not keeping pace,” she said. “This is not a new situation. It certainly was exacerbated during COVID, but this has been going on for quite some time.”
The nonprofit sector in New Jersey is bigger than you think: There are more than 40,000 organizations, which account for 10% of the state workforce and $50 billion in spend.
But the biggest number — which comes in the form of giving — is down.
“With the current economic stress, it’s harder for people to give,” Czipo said. “This piece of legislation would really help — and everyone would reap dividends despite the revenue the state would forego. Studies show charitable giving is multiplied many, many times in terms of what’s brought into the charitable community. So, that’s certainly a very top priority.”
It’s not a cure-all — and it’s not the only way the government can help the sector.
You may be stunned to learn that government grants do not come when they are announced — and they often require loads of paperwork to be realized, something many nonprofits struggle to find time to fill out.
“The process is much more cumbersome and complicated than it needs to be,” Czipo said. “That impedes access to these opportunities for a lot of smaller organizations.”
These smaller organizations struggle to find staff — and then struggle to find enough resources to retain them. Conservative estimates say 20% of all nonprofit positions are unfilled.
“If nonprofits can’t pay their people competitively compared with the other sectors, then, either they won’t be able to recruit for these positions or they’re not going to be able to keep them,” she said. “It’s a critical challenge we need to tackle together.”
Czipo addressed a number of issues around the nonprofit sector in a talk with ROI-NJ. Here’s more of the conversation, edited for space and clarity:
ROI-NJ: We were stunned to learn there are 40,000 nonprofits in the state. Would the sector be better served if more of these groups merged?
Linda Czipo: It’s very situational. Some of that has been happening. When times get tight, groups do pursue mergers or other forms of collaboration — and not every collaboration has to be a merger. But not all mergers make sense. Keep in mind that nonprofits tend to be very small and very community-focused. Ninety percent of nonprofits have budgets under a million dollars, and 80% have budgets under $500,000.
There’s a lot of collaboration going on, but merging may not always make sense.
ROI: Giving Tuesday was a great way to draw attention to nonprofits — and led to large giving. In the beginning. Now, it appears to be so oversaturated that many nonprofits are not seeing the giving they have in the past. Is that a big issue?
LC: It really depends on the organization. Some organizations have been very successful, but others have decided they would be better off focusing their energies at other times and with other things. That being said, Giving Tuesday keeps giving in mind. And, it’s a really important concept.
ROI: If there is a person or a company out there that wants to give, what are the first steps?
LC: I think the first thing to do is look in your community. Everywhere you turn, nonprofit organizations are doing really phenomenal work. Think about the issues that you’re passionate about — whether it’s children or the environment. Or think about your life and ways in which nonprofits have benefited you or the community, like in times of crisis. We always say to look inwardly first.
ROI: What is a typical donation?
LC: There is no typical donation. And no donation is too small. Every gift is critically important. Small gifts often serve as the lifeblood for smaller community organizations, which are much more dependent on donations than large organizations are.
What’s important is to build a relationship with the organization. You don’t even have to give right off the bat. Just check out an organization and see what they’re about — see if they kind of match your value system and your priorities for giving.
ROI: Of course, getting the legislation passed would make all of this easier. What do you think is the holdup — who would be against making it easier to give?
LC: I wouldn’t say anybody is against it, but, when the concerns are registered, they have to do with the revenue to the Treasury that would be lost. Our point is, that revenue is multiplied many times. For every dollar the state loses to nonprofits, the state would gain 15 to 20 times more — and all of that money is channeled directly back into communities in our state.
ROI: We’ll give you the final word. Give us a pitch for contributing to nonprofits?
LC: Think about the times of distress. Think about the pandemic. Think about natural disasters. Anytime there’s a crisis, the nonprofit community steps in immediately. And the nonprofit stays. It doesn’t go away.
Nonprofits are in our lives all the time, every day — cradle to grave. They need our support.