Continued from previous page
The New Jersey Police Chief Magazine | September 2025
�� |
Steering a contract to a member’ s company without fair bidding. |
�� |
Paying a board member well above market rate for professional services. |
Each of these may look like“ helping a colleague,” but the IRS sees them as misusing assets meant for the organization’ s collective good.
When Benefits Are Okay
Not-for-profits can provide valuable perks— as long as they align with the mission and are fairly available to all:
�� |
Member access to training, certification programs, or industry research. |
�� |
Discounts on conferences or publications open to the full membership. |
�� |
Recognition awards that highlight contributions to the profession. |
In these cases, the private benefit is incidental— a natural byproduct of advancing the association’ s purpose.
The Stakes Violating private benefit rules can bring severe consequences:
�� |
Loss of tax-exempt status-- the nuclear option |
�� |
Excise taxes and penalties for individuals involved. |
�� |
Damaged credibility with members, stakeholders, and the public. |
For professional associations, trust is currency. Protecting it means treating assets as belonging to the mission, not to any one member.
Final Word
Of course, none of the above means that the NJSACOP does not get involved in legal matters related to the position of Chief of Police or matters involving individual members. The association itself frequently takes part as a party to court cases, with our General Counsel representing the NJSACOP as a whole. While this is often an expensive option, it helps guarantee that our attorney’ s experience and expertise is put to use in the matter, and the interests of the membership as a whole are represented( thereby avoiding potential issues of personal inurement). This is the route most often taken in matters involving members that have proceeded to litigation where the issues have broad implications for the membership as a whole and for the office of Chief of Police.
A not-for-profit association’ s strength lies in its collective purpose. By keeping assets focused on that mission, leaders protect both their tax-exempt status and the integrity of the organization. Remember: assets for all, not a private benefit for one( or some).
6