Interpreting the evolving scope of the New Jersey Charitable Immunity Act

New Jersey’s Charitable Immunity Act provides nonprofit organizations with a powerful defense against certain negligence claims. Designed to preserve charitable assets for the public good rather than divert them to tort damages, the Act continues to shape litigation involving religious, educational and charitable institutions. Recent decisions, however, show that its boundaries are not absolute and remain subject to evolving judicial interpretation.

To invoke immunity, a defendant must establish three elements:

1. it is an organization formed for nonprofit purposes; 
2. organized exclusively for religious, charitable or educational purposes; and 
3. was promoting such objectives and purposes at the time of the injury to plaintiff who was then a beneficiary of the charitable works. Courts are directed to construe the statute “liberally” to advance its purpose, as reaffirmed in Abdallah v. Occupational Ctr. of Hudson County, Inc., 351 N.J. Super. 280 (App. Div. 2002). Yet liberal construction does not mean automatic protection—courts still require clear proof of each element.

In Bass v. House of Prayer Cogic of Orange, No. A-1284-20, 2021 WL 6132768 (N.J. Super. Ct. App. Div. 2021), the issue was whether the Church acted with gross negligence which would act as a bar to the application of the Charitable Immunity Act. The Appellate Division upheld summary judgment for the church because the plaintiff failed to offer proof of egregious conduct under the gross negligence exception to the Act. Once a defendant establishes the elements of immunity, plaintiffs face a high bar to overcome the defense.

Courts have also interpreted the term “beneficiary” broadly. In Green v. Monmouth Univ., 237 N.J. 516 (2019), a non-profit university was found immune when a non-student was injured during a concert at the university because her attendance fulfilled the university’s purpose of “advancing education” as stated in its certificate of incorporation. Similarly, in Smith v. Newark Cmty. Health Centers, Inc., No. A-2138-22, 2024 WL 3579745, at *4 (N.J. Super. Ct. App. Div. 2024), held that a plaintiff’s presence at a federally qualified health center made her a beneficiary because the purpose of her visit fell within center’s mission statement. These cases reflect courts’ continuing willingness to apply the statute expansively when the injured party’s connection to the organization’s work is clear.

Still, modern nonprofit operations can blur the lines between charitable and commercial activity. In Bieker v. Community House of Moorestown, 169 N.J. 167 (2001), the Supreme Court held that an organization earning revenue does not itself overcome the immunity to suit so long as the organization’s dominant purpose remains charitable. But the Court cautioned that entities primarily engaged in commercial enterprises, even if organized as nonprofits, may not qualify in other matters. This underscores the importance of examining an entity’s structure, funding sources and daily operations when assessing the defense.

For insurers and claim handlers, understanding these nuances is essential. Early identification of charitable status can guide coverage decisions, reserving and defense strategy. Conversely, assuming immunity without confirming eligibility can create significant risk if discovery reveals that the organization’s activities are not truly charitable. Adjusters and defense counsel should obtain foundational documents—such as incorporation papers, bylaws, and tax filings—to support an immunity defense early in the claim process.

Charitable immunity can also significantly affect valuation and settlement posture. When immunity applies, exposure may be limited or eliminated altogether, often prompting early resolution or dismissal motion practice. 

As New Jersey’s nonprofit landscape evolves, courts will continue to test the limits of the Charitable Immunity Act. The statute’s protective intent remains strong, but its application depends on careful factual analysis and strategic advocacy. Staying informed of emerging case law and understanding how immunity impacts exposure are key to navigating this complex and evolving area of law.