Urgent: Report BOI before the federal deadline to avoid $591/day penalties. File before 1/1/2025
Harbor Compliance makes starting your nonprofit easy. Your specialist manages all of the paperwork, letting you focus on your mission. Get your 501(c)(3) approved from $99 - $2,495 plus filing fees.
Welcome to our Delaware Nonprofit Startup Guide! If you’re passionate about helping others and have an idea to serve your community, starting a nonprofit is a great way to turn your vision into a reality. There are many different types of nonprofits - religious, educational, human service oriented, animal welfare, and more. What all nonprofits have in common is a focus on helping others and benefiting their community. You are genuinely committed to these goals so you are already well on your way!
According to the National Center for Charitable Statistics, there were over 8,000 nonprofit organizations in Delaware in 2012. Before you start a new nonprofit, make sure you have identified an unmet need in your community and know that there are not any existing organizations serving your cause. If another organization exists, consider working together, as that may be a better way to make an impact in your community and use existing resources.
When you are ready to start your nonprofit, plan to incorporate and apply for 501(c)(3) status, as these are important steps to fully achieve your goals. As a 501(c)(3) nonprofit, you will be able to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Most importantly, you will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.
This guide will walk you through the basic steps to start your nonprofit in Delaware. Let’s get started!
Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.
| Name Search: | Delaware Department of State - Division of Corporations Name search |
| Suffix: | Shall contain 1 of the words "association," "company," "corporation," "club," "foundation," "fund," "incorporated," "institute," "society," "union," "syndicate," or "limited," (or abbreviations thereof, with or without punctuation), or words (or abbreviations thereof, with or without punctuation) of like import of foreign countries or jurisdictions (provided they are written in roman characters or letters). |
Delaware offers two forms of nonprofit corporations: exempt and nonstock. An exempt corporation is not subject to Delaware’s annual franchise tax. To qualify for exemption the organization must meet the requirements of §501(b). Your organization likely qualifies if one or more of the following apply. Your organization:
If your organization does not qualify for exemption, file as a nonstock nonprofit corporation.
The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.
| Delaware director requirements: |
|
| Delaware officer requirements: |
|
A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local Delaware registered agent office is located in Dover, DE. We offer registered agent service independently or as part of our nonprofit formation packages.
Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.
| Agency: | Delaware Department of State - Division of Corporations |
| Form: | |
| Filing Method: | Mail, fax, or online. |
| Agency Fee: | $109 + $9 for extra pages + optional $50-$1000 expedite fee |
| Turnaround: | ~3 weeks. ~24 hours for $50 state expedite fee. Same-day for $100 state expedite fee. ~2 hours for $500 state expedite fee. 1 hour for $1,000 state expedite fee. |
| Law: | |
| Notes: | Include a cover letter. |
After filing articles of incorporation, you must file an initial report.
Not required
This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.
| Agency: | Internal Revenue Service (IRS) |
| Form: | |
| Instructions: | Applying for an EIN without a SSN/TIN:
|
| Filing Method: | Mail, phone, fax, or online. |
| IRS fee: | $0 |
| Turnaround: | Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail. |
| Notes: | The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN. |
As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.
A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.
Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.
At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.
Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.
The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.
Provide 2 days' written notice to the attendees (DC §8-108(b)).
Non-Profit Corporations are exempt from obtaining a Delaware business license and paying the accompanying gross receipts tax on the sales of most goods and services; nevertheless, Delaware nonprofits are required to register with the Division of Revenue. Delaware offers a consolidated application to register your organization with the Division of Revenue, the Division of Unemployment Insurance and the Office of Workers Compensation.
| Submit to: | Delaware Division of Revenue http://revenue.delaware.gov/ |
| Form: | Form CRA: Combined Registration Application for State of Delaware Business License and/or Withholding Agent |
| Filing Method: | Mail or online |
| Fee: | Varies based on applicable licenses/accounts |
If you will hire employees, register with the Delaware Department of Labor by filing Form UC-1 ($0 state fee).
Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.
Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!
| Agency: | Internal Revenue Service (IRS) |
| Form: | |
| Instructions: | IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024. Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization. |
| Filing Method: | |
| Agency Fee: | $275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023. |
| Turnaround: | 1023-EZ average: <1 month. 1023 average: 3-6 months. |
As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.
With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.
To file to obtain exemption from state income tax:
Not required
Any corporation granted an exemption by the IRS as a non-profit organization under Section 501(c) is exempt from Delaware Corporate Income Tax.
More information: Delaware Department of Finance - Division of RevenueTo file to obtain exemption from state sales tax:
Not required
Delaware does not collect sales and use taxes at the state level.
This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.
Not required
Charitable Registration licensure is not required on the State level in Delaware.
| Law: |
To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.
Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.
In Delaware, bingos, raffles, and other charitable games are overseen by the Delaware Department of State, Division of Professional Regulation: Board of Charitable Gaming (~$15 per event).
Some of our clients incorporate on their own and seek our professional assistance with the next steps. In such cases, we review the existing documentation and make any necessary changes. We’re happy to help at any point. Keep in mind, the earlier you enlist our expertise, the more time you’ll save and the greater success you'll experience in the end!
If you have an existing for-profit entity and are looking to transition to a nonprofit, we are very familiar with this situation and can help! Simply sign up for our professional formation services, and your specialist will review your existing entity and assist with the appropriate next steps.
You are not required to use an attorney. You can set up your nonprofit yourself but doing so requires a great deal of expertise and time. The IRS estimates the 501(c)(3) application takes over 100 hours in research and preparation. Enlisting the help of a professional greatly increases your likelihood of success and saves you time. With our professional formation services, your specialist prepares and files your applications for you with guaranteed approval. Take advantage of our track record of 100% IRS approval and get your nonprofit approved, guaranteed!
You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!
Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Delaware nonprofit compliance guide to learn more!
Welcome to Our Community
We're committed to publishing free informational resources such as this how-to guide. Our resources have been shared by important industry organizations including:
Below is an overview of the paperwork, cost, and time to start an Delaware nonprofit.
