While non-profit arts organizations are looking into alternative structures under which to organize themselves like the L3C, it seems at least one municipality is looking to the non-profit model for their government structure.

Back in July, I came across an article about how Hopewell Borough in NJ is considering the non-profit model as a way to avoid state mandates. Mayor Paul Anzano posted a letter on the borough website in December:

“This would not be about seceding from the state, abandoning our responsibilities or failing to maintain the highest goals,” he wrote. “But it would most certainly involve exploring new options for delivering services based on the unique character of our borough. … Let the discussion begin.”

He was motivated by frustration he felt when the state mandated services but forbade raising taxes.

According to the newspaper article, “Under Mayor Anzano’s plan, the community would be run on a corporate model, and a board of directors, rather than a borough council, would hold residents responsible for municipal fees much like those in a co-op.”

The government wouldn’t be organized under 501 c 3 like arts organizations are so there wouldn’t be an opportunity to write off your property taxes as a deductible donation. There are a few non-profit categories under which you can organize which supporting would not be tax deductible (neighborhood associations or condo co-opts, for example).

The mention of co-opt association raised a momentary red flag for me as I recalled a recent story about how Texas Homeowner Associations can foreclose on your property without a judicial proceeding. This is the case in 33 states. I wondered if NJ were one and if Hopewell Borough might end up structured in such a way that they were exempt from any eminent domain prohibitions that usually face governments.

I was waiting to see if there might be any more development on the story, but other than the borough meeting a few days later to discuss this, I haven’t been able to find much more news on the matter.

So at this point, there is no sign that this will ever come to fruition. But if a borough of 2000 people can get a discussion started on the topic among various state government units and the associations to which they belong, maybe the charitable non-profits should get together, the hospitals, social service agencies, arts organizations, etc, and push for an alternative structure–either a new one or a new hybrid non-profit category that provides more options for operation.