Nonprofit Startup Guide
Overview of the Process
Your first step in starting a nonprofit organization is to incorporate as a nonprofit corporation in your state, a time-tested structure for public charities. Filing your articles of incorporation with your state government officially launches your organization, finalizing its name and establishing the effective date of formation. You’ll want to do this knowing what type of 501(c) tax exemption you intend to pursue so that you include the applicable provisions in your incorporation documents.
Build the foundation of your organization by recruiting and electing your board of directors, appointing officers for the board of directors, and creating your bylaws and other key policies.
Meanwhile, you should also obtain tax identification numbers for both state and federal taxation. You may apply for a Federal Employer Identification Number (FEIN) from the IRS. Some states offer a consolidated registration process for all state tax accounts and IDs, while others require you to apply for each unique tax account.
You’ve likely heard about applying for 501(c) federal income tax exemption. This is the most challenging step in the formation of a nonprofit organization. Knowing the 501(c) tax exemption you are pursuing, make sure that you utilize the appropriate application form and complete everything in its entirety.
Our state-by-state guides will provide you with the information you need to better understand the variety of state and local tax exemptions available to nonprofits.
Last, but far from least, before you solicit any funds or hire someone else to solicit funds for you, you are often required to complete charitable solicitation (fundraising) registration in each state where you plan to raise funds. You’ll need money to accomplish your mission, so don’t miss this key step. Once you are ready to begin fundraising, make sure you are aware of any disclosure requirements that are in place.
You’ve gotten a sense of the process reading this overview. Before digging into the details, take a moment to review a few brief considerations.
Continue reading “Considerations Before Forming a Nonprofit?”