How to Start a Nonprofit
Starting a nonprofit is two separate projects that people often blur together: creating a legal organization under state law, and getting that organization recognized as tax-exempt by the IRS. Doing them in the right order saves time and money.
1. Define your mission and make sure a nonprofit is the right fit
Write a one- or two-sentence mission that describes who you serve and how. Then check whether a new organization is really needed. Partnering with an existing charity, or using a fiscal sponsor while you test your idea, can be faster and cheaper than forming your own entity.
2. Recruit a board of directors
Most states require at least one to three directors, and the IRS looks favorably on an independent board — people who are not related to each other and are not paid by the organization. Plan on at least three unrelated directors.
3. Choose a name and incorporate in your state
Search your state's business registry to confirm the name is available, then file Articles of Incorporation (sometimes called a Certificate of Incorporation) as a nonprofit corporation. To qualify for 501(c)(3) status later, the articles must include a charitable purpose clause and a dissolution clause stating that remaining assets go to another exempt organization if you ever close.
4. Adopt bylaws and a conflict of interest policy
Bylaws are your internal rulebook: how directors are elected, how meetings work, officer roles, and voting. Hold an organizational board meeting to adopt the bylaws, elect officers, and approve a conflict of interest policy. Keep minutes — the IRS application asks about governance.
5. Get an EIN
Your organization needs its own Employer Identification Number from the IRS, even if it has no employees. It's required for the 501(c)(3) application, opening a bank account, and most state filings.
6. Apply for federal tax exemption
Most charities file Form 1023 or the shorter Form 1023-EZ online at Pay.gov. Filing within 27 months of incorporation generally makes your exemption retroactive to the date you incorporated.
7. Handle state-level requirements
- Register for charitable solicitation in your state (and others) before asking for donations, where required.
- Apply for state income, sales, or property tax exemptions if your state offers them — these are separate from federal exemption.
- Calendar your state's annual report for the corporation itself.
Related service: 501(c) Application Services →