NJ Governor Signs Bill To Let Nonprofits Run Public Schools

Nonprofits will now be able to run failing public schools thanks to a new bill signed in New Jersey.

Business Weekly reported last week that New Jersey Governor Chris Christie signed The Urban Hope Act, which creates a 10-year pilot program that allows nonprofits to build and operate "renaissance schools" in Newark, Trenton, and Camden.  Renaissance schools are similar to the charter school programs that have been running in New Jersey for more than a decade.  While charters get reimbursed as much as 90 percent of the district's per-pupil costs, these new schools will get 95 percent.  Organizations will be able to apply to local boards and then the state Education Department for up to four schools in each city.

This is the first education-related victory for Christie, a first-term Republican, after he declared 2011 "The year of education reform."  The Governor and sponsoring Democrats say The Urban Hope Act will create choices for students who are stuck in districts with failing schools.  The original version of the bill would have also allowed for-profit firms to run schools, but that measure didn't make it into the final bill.

The Urban Hope Act is part of a four-bill package that also includes a privately funded school-voucher program, among other reforms.  Christie has vowed to renew debate on those measures later in 2012.  Make sure to read the full article in Business Weekly.

NJ Will Not Pursue Disclosure Requirement

The NonProfit Times reported last month on a proposal by the state of New Jersey that would have required nonprofits to provide donors an opportunity to designate a specific program when they made their gifts.  After receiving a wave of negative comments from concerned nonprofits, the state no longer plans to pursue this proposal. 

In an article just posted on the NPT website, we learn that the comments garnered by the pre-proposal process made it clear to the state that nonprofits were not at all excited about the proposed rule.  They were able to successfully convince the state that the rule would have been very difficult to implement, and also proposed alternative ways to generate donor awareness about the right to designate. 

If you would like to read the full article, which includes a list of why nonprofits felt the proposed rule was unacceptable, head on over to The NonProfit Times.

NJ Considering Mandatory Disclosure Requirement

We just put up a new story on the website that may be of some interest to nonprofits in New Jersey.  Our own Sam Fanburg reports that the New Jersey Division of Consumer Affairs (NJDCA) is accepting public comment on a proposed mandatory donor designation disclosure.  If it were to pass, nonprofits would be required to give donors a way to designate funds for specific programs.  Here are some more details from the story:

According to the "pre-proposal" under N.J.A.C. 13:48-11.2, the NJDCA believes that “if particular programs are the inducement for a donor to make a contribution to the charity, the donor should be advised that he or she has the option to direct the charity to use his or her contribution to fund that program.” Any nonprofit that receives more than $250,000 in its previous fiscal year would have to include a designation allowing donors to choose what specific program their contribution would fund.

In a seven-page letter addressed to the acting director of the NJDCA, Errol Copilevitz, a partner in the Kansas City, Mo., firm of Copilevitz & Canter, LLC, tackled his own misgivings about the proposal finding a misunderstanding of fundraising by the state. “The rule fails to recognize a basic axiom of charitable fundraising, to-wit: it costs money to make money,” he wrote.

The proposed rule makes no allowance for cost and would mislead donors into believing their designation will require “100 percent of their donation to go to program services (when such a request is impossible),” according to Copilevitz. Especially in a nonprofit’s infancy, many times it costs more than a dollar to raise a dollar, but securing that initial relationship with donors allows an organization to cultivate future contributions.

As you can see, there are some concerns being raised about this proposal.  In addition to Copilevitz, the Center for Non-Profits in New Brunswick, NJ also has some issues with it.  Among other things, they believe it could lead to additional administrative costs such as printing, fund allocation and bookkeeping.  If your organization wants to make any comments on the proposal, send it to this address:

Thomas Calcagni, Acting Director
New Jersey Division of Consumer Affairs
P.O. Box 45037
Newark, NJ 07101

And be sure to read the full article on The NonProfit Times website.

NY Public Radio to Buy NJ Radio Stations

Note: This is a summary of a story from another website.  Please follow the links in the post if you want to read the full article.

New York Public Radio has announced plans to purchase four radio stations from NJN, the public TV and radio broadcaster in New Jersey, according to a press release on WNYC.org.  In the announcement, NJ governor Chris Christie said that the acquistions will allow New York Public Radio to create a new public radio station that will focus on news in New Jersey. 

Additionally, New Jersey will turn over the operations and programming of the NJN TV network to WNET/Channel Thirteen, which will be renamed NJTV.  Governor Christie said the goal with this move is to end the state's role in public broadcasting.  The acquisitions are subject to review by the New Jersey Legislature and approval by the New Jersey Public Broadcasting Authority and the FCC.

You can read the full story at WNYC's website.

New Jersey puts the squeeze on nonprofits

Here is another past episode of NPTV.  Check it out here.

New Jersey has gone about cutting corners in a controversial way in an attempt to save dollars. The state has proposed a limit on how much it is willing to pay towards state contracted CEO salaries, as well as on employee benefits for nonprofit social service agencies. The proposed alteration to the third party contract language would result in New Jersey capping salaries and employee benefits based on the operational budgets of nonprofit organizations.

What this proposal looks like

For nonprofits with a budget of more than $20 Million, salaries would be capped at $141,000. In instances where the budget ranges between $10-$20 Million, the proposed cap would be $126,900. In the case of budgets between $5-$10 Million, the relevant proposed cap would fall at $119,850. Meanwhile, budgets of less than $5 Million would attract a salary cap of $105,750. At this stage is unclear is that number is total compensation or base salary as reported on the federal form 990.

Less funding for other areas also

Beyond placing a cap on salaries, the state would also limit its funding with regard to issues like travel, education, severance and vehicle operating costs relating to all employees in the charitable sector. In proposing these controversial measures, the state of New Jersey is hoping to save an estimated $5 Million. These changes are due to take effect on July 1st 2011. As might be expected, it is a move that has many charitable workers disappointed and enraged.