How should a nonprofit organization distribute its assets upon dissolution?

In New Jersey, nonprofit organizations must adhere to the state’s laws regarding how assets should be distributed upon dissolution. According to state law, any remaining assets of a nonprofit organization must be distributed to organizations that have similar objectives as the dissolved organization. These nonprofits must also be registered in the state of New Jersey. The board of directors of the nonprofit organization is responsible for determining which organizations will receive the assets. Before the assets of a dissolved nonprofit are distributed, the organization must fulfill any remaining debts or obligations it has. This includes settling outstanding lawsuits or paying back creditors. Once all debts and obligations have been met, the organization’s board of directors can determine which similar nonprofit organizations will receive the remaining assets. The board of directors of the dissolved nonprofit organization must also ensure that all assets are properly valued for tax purposes. This includes assigning fair market values to any real estate, equipment, or other assets before distribution. In addition, any remaining funds from the dissolved nonprofit’s endowment must also be distributed according to the terms and conditions of the organization’s gift or trust agreement. All distributions must also adhere to the New Jersey Charitable Gifts and Endowments Act. Finally, the board of directors of the dissolved nonprofit organization must file an annual report with the Attorney General that provides a detailed account of how the organization’s assets were distributed. This report must be filed no later than 90 days after its dissolution.

How should a nonprofit organization distribute its assets upon dissolution?

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