ERSFORNONPROFITSADMIN

How to Start a Nonprofit Organization Step-by-Step

to start a non-profit organization

• Step 1: Develop an idea

• What cause are you working for? For example, breast cancer awareness, homelessness, child abuse, etc.

• Who will the beneficiaries be for the service and work you perform? 

• What is your mission statement? 

• What is the vision you have for your organization? In other words, what would the world be like if you are successful with your organization? 

• Step 2: Research 

• Are there other nonprofits out there doing what you want to do? It will be more difficult to raise funds and make a difference if there are multiple organizations trying to do the same thing. 

• Can you collaborate with an already established organization? 

• How large is the issue or cause you are seeking to promote?

• Step 3: Decide and register your name 

• Make Sure Your Proposed Business Name is Available 

• Step 4: Recruit Board of Directors 

• While you are forming a nonprofit organization, the organization is a legal entity of it’s own. This means that no one personally owns a nonprofit organization (as opposed to a private business before it goes public). Therefore, nonprofit organizations are managed by a Board of Directors.

• Step 5: Incorporate your nonprofit 

• Decide where you will incorporate

• Research on specific state requirements (see The Foundation Center for more information)

• Create and sign your nonprofit’s Articles of Incorporation 

• What is included in the Articles of Incorporation? - Your organization’s business name and address, Your corporate purpose (typically this has to do with the mission of your organization)

• Step 6: File for Employer Identification Number 

• Filing for your EIN number allows the nonprofit organization to hire employees and pay their staff. It is also a requirement for the 1023 tax-exempt form that you will be filing.  

• Step 7: Write nonprofit bylaws 

• The nonprofit bylaws are designed to outline the standards and procedures of your organization. This includes information such as the name of your organization, the directors, how meetings are held, etc.

• Step 8: Apply for tax-exempt status 

• In this step you will be filling out and filing document 1023 with the federal government. Upon receiving approval from the federal government, you will then file with your state government. This is the step that provides you with your 501(C)(3) status and documentation.  

• Step 9: Mail appropriate information 

• Mail your Bylaws, Articles of Incorporation (stamped with State Division of Corporation), and the IRS Form 8718 with the appropriate user fee to the address found on form 8718  

• Step 10: Prepare and file a Charitable Solicitation Permit at the state level 

• Filing your charitable solicitation permit will allow others to donate to your organization. This is a key step in being able to fundraise for your organization. Many states allow you to begin receiving donations from the point of filing your 1023 form, but make sure to check out the rules for your specific state.  

• Step 11: Obtain business licenses and permits for your corporation from the following: 

• The federal government 

• Your state government

• Your local government

• Step 12: Open a separate bank account for your nonprofit 

• Since the nonprofit organization is not owned by any one person, it is imperative that there is a separate bank account for all nonprofit activities.  

• Step 13: Prepare and File Appropriate Reports 

• IRS Form 990