How to Start a 501c3 The Ultimate Guide

You should identify what types of organizations in your community can give you more reach and help your mission, including other nonprofits, schools and local businesses. Additionally, nonprofits can obtain local, state and national government-based grants in some cases. The useful website provides most national grant opportunities in one place, with funding options from various federal agencies. When you’re starting a new nonprofit organization, there are many aspects you should consider, including your mission, proposed budget and how you plan to fundraise.

  1. Each state has its own requirements and regulations, so you must visit your local Secretary of State’s office to find the necessary paperwork to get started.
  2. Your mission, vision, and values will be key to making many important decisions that have a long-term impact on your organization.
  3. You might want to hire a certified public accountant (CPA) to work with you on a detailed budget so you don’t underestimate your operating costs.

Due to the sheer number of nonprofits out there, it’s likely there’s another organization already tackling the cause or issue you want to focus on. After you’ve drafted your articles of incorporation, it’ll be time to have your organization officially certified. There are a few different places that you can go to get certified. You can go to your local city or county clerk’s office and have your articles of incorporation certified there. Or you can submit your articles of incorporation online to save time. Nonprofits can help the local community while offering you a great experience for your resume.

Roles and responsibilities of a nonprofit’s board of directors

Consider whether identifying a fiscal sponsor to “incubate” your nonprofit idea would be more practical, and less expensive, than starting a new organization. Some of the questions to ask before starting a nonprofit, filings you’ll need to complete, and the policies and procedures that you may want your new nonprofit to have in place. Once you have completed steps 1-5, you are ready to apply for 501(c)(3) tax-exempt status. Bylaws are the main governing document of your nonprofit and will act as a guide and decision-making tool for the board of directors. Consider alternatives that can let you essentially operate as a nonprofit but with far less effort and cost.

While grants can fuel you at the start more easily than many other funding sources, applying for them can be very time-consuming. Good people are key to running a successful nonprofit organization. Your vision is the future you intend to create; your grand plan—how you’re going to change the world. Your organization’s vision statement shares with supporters your grand plan and how you’re going to change the world. If you’re looking to start a nonprofit organization, it is by no means an easy ordeal. Once you’ve got your charity set up and you’re ready to move forward, you can begin focusing on the work that you need to do.

Steps to Start a Nonprofit

Despite the mission statement being short, you should spend a fair amount of time on it because it will end up being used in published materials, on your website and elsewhere. Given this vital role, it’s natural for engaged community leaders to start nonprofit organizations. However, if you have the desire to create a nonprofit, there are many considerations to take and a lot of things you need to do to make it official.

It can be tempting to let your marketing develop organically, but doing so presents more problems than benefits. If you’re interested in how to start blogging, we’ve written an article about how to start a successful nonprofit blog. Building a professional network for your nonprofit can have some major benefits early on. Networking will help to increase visibility for your work, attract new donors, staff, and volunteers, and connect your nonprofit with the essential resources it needs to get started.

The most common way to secure startup funding for nonprofits is by applying for grants. Nonprofit Point is the collection of valuable resources for nonprofits which ultimately helps them increase donations, acquire donors and manage their nonprofit seamlessly. You can set up an online donation page within minutes and start accepting donations from Day 1.

What is your mission?

Check out our features to learn why more than 50,000 organizations trust Donorbox to boost their fundraising. Your board can help you with the incorporation and the rest of the sometimes challenging process of establishing a 501(c)(3). Hiring the right board is essential to the success of your nonprofit. Use descriptive words, but try not to overdo it or make it too long. This decision will set the tone and influence your nonprofit’s brand for years to come. But knowing – and being able to articulate – your purpose will help you with every step of establishing your organization.

You’ll want to start thinking about how to promote your charity and start fundraising. Once you’ve drafted your articles of incorporation and have found some people to join your organization, you’ll want to hold your organizational meeting. This is where you officially approve your articles of incorporation and make any changes to them if necessary. Alana Rudder is a staff writer at Forbes Advisor, specializing in testing and reviewing, HR, payroll and recruiting solutions for small businesses. She currently serves as a business consultant, operations manager, and content strategist at Doubting Thomas Research Foundations’ Afghan Liberty Project, a small non-profit organization. Typically, articles of incorporation are filed with the secretary of state in the state in which the organization is being founded.

​​Nonprofit organizations serve a crucial role in the United States, providing many services to communities that aren’t fulfilled by local governments. There are about 1.7 million active nonprofit organizations in the United States, according to Cause IQ. And nonprofits contribute an estimated $1 trillion to the national economy. If you received your 501(c) (3) designation from the IRS, you can use that designation to avoid paying sales tax if your organization operates in a state with sales tax. In some states, merely showing your IRS determination letter or your tax-id number is enough, whereas in others, you may be required to complete a form.

Step 10: Get Donations

Donorbox has partnered with Double the Donation to give nonprofits an affordable alternative for company gift matching. Nonprofits can offer their donors an easier way to find out if their companies offer matching gifts. Integrate Double the Donation on your website and watch your revenue increase. Should you wish to change your name or address in the future, the IRS mandates that an exempt organization must report the name, address, and structural and operational changes. When an organization files an annual return (such as Form 990 or 990-EZ), it must report the changes on its return. If your organization needs to report a change of name, see Change of Name- Exempt Organizations.

Hold Your Organizational Meeting

For instance, if the group owns a property, but leases part of that property to a for-profit business. Then the group is liable for property taxes on the leased portion of the property. Organizations under Section 501(c)(3) of the IRC are generally exempt from most forms of federal income tax, which includes income and capital gains tax on stock dividends and gains on sales.

She is a former Google Tech Entrepreneur and holds an MSc in international marketing from Edinburgh Napier University. Magazine and the founder of ProsperBull, a financial how to start a nonprofit organization for dummies literacy program taught in U.S. high schools. The process for filing for tax-exempt status varies depending on the type of 501(c) organization that you seek to form.

Also note, incorporation registers your nonprofit, but it does not make it 501(c)(3) exempt. First of all, however, you need to make sure you’re aware of everything you need to do to maintain compliance. You could also consider running an email campaign with regular newsletters that let your readers know about the great work you’re doing. Be sure to collect email addresses and other relevant data in a proper way from the beginning. Come up with an outstanding logo for your organization – simple but compelling, moving and relatable, memorable, and communicating who you are. When building a brand, it’s very important to refer back to your demographics – so you can tailor your communication to meet their exact needs.


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