How to Start a Non Profit

Generally, the most difficult part of the paperwork involved with starting a non-profit corporation is achieving tax-exempt status by filing appropriate tax forms with the Internal Revenue Service (IRS). Your goal should be to receive approval of this status by filing an Application for Tax-Exempt Status, which is referred to as a 501(c)(3) approval letter. This status is important because most grant-makers require IRS approval in order to award grants.

Things You'll Need

  • IRS 501 (c) (3) exemption application and approval letter/application fees
  • Articles of incorporation/filing and publication fees
  • Attorney/fees (recommended)
  • By-laws
  • Corporate record binder (recommended)
  • Business plan (recommended)
  • Directories of grant-making agencies (recommended)
  • Directors
  • Tax forms
  • IRS Employer Identification Number (EIN)
  • Business license
  • Home occupation permit, if required
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Instructions

    • 1

      Formulate a plan of action for your non-profit organization. Ask yourself, “What purposes will this non-profit serve?”

    • 2

      Hire an attorney to handle the incorporation and application for tax-exempt status. Although not required, a lawyer can be helpful in assuring that you have complied with legal requirements for incorporating and any other legal scenarios that may occur in operating your corporation.

    • 3

      Prepare and file your Articles of Incorporation with the appropriate state entity, usually the secretary of state. In order to qualify as a 501(c)(3) Tax Exempt Corporation, you must include specific wording that complies with IRS requirements. A filing fee must also be paid.

    • 4

      Publish your articles of incorporation in a newspaper of general circulation according to your state’s requirements.

    • 5

      Buy a corporate recordkeeping kit. These kits can greatly reduce your workload and preparation of paper document requirements. Most kits contain a variety of forms (such as a set of fill-in-the-blank by-laws).

    • 6

      Obtain a business license. If you are operating the agency from your home, you will likely be required to obtain a “Home Occupation Permit” in order to get your business license.

    • 7

      Obtain an Application for an Employer Identification Number from the IRS either in person, by mail or by visiting the IRS website and downloading an application.

    • 8

      Acquire a copy of an Application for Tax Exempt Status. Complete the application and enclose the appropriate non-refundable application fee.

    • 9

      Attach all required documentation to the 501(c)(3) application. You must also include a copy of the checklist certifying that you have complied by attaching all necessary documentation such as your Articles of Incorporation, By-Laws and other information.

    • 10

      Wait until you receive your IRS approval letter before attempting to apply for grants. Most grant-making organizations will not consider grant applications until they receive an actual IRS approval letter.

    • 11

      Photocopy your application and all other materials.

    • 12

      Mail your completed application to the IRS along with their fee. A response to your application can take six months or more.