The purpose of a charitable nonprofit must be for the public interest and common good. It should establish a single mission and a set of goals and programs that will accomplish that mission. This is a step where a new nonprofit should analyze what it wants to do, who it wants to reach, and how it wants to impact society. A mission statement should be brief, timeless, and descriptive of what the organization is trying to accomplish. The Mission Statement will guide the organization through its initial formation, program development, growth and change.

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There are various kinds of nonprofits.  The best know is commonly referred to as a 501(c)(3).  A 501(c)(3)’s assets must be dedicated to charitable purposes such that no substantial portion of its assets can be used for other than charitable purposes.  For instance, a 501(c)(3) can engage in legislative activity provide it makes the required elections with the IRS and provided its legislative activities are insubstantial.  Click here to view a chart that compares various nonprofit statues. 

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While forming a nonprofit corporation can implicate many complex issues, we have distilled the process down to 12 Steps.  

 

1. Get clear on your purpose and choose a name for your nonprofit. (While you’re at it, select  and reserve a web domain name.) 

2. Form your incorporating board of directors (practically speaking, three people are needed) and identify leadership team.  

3. Write Articles of Incorporation including a statement of your purpose and submit them to the appropriate office in your appropriate state government with the required fee.  Then, wait for a response from your state.  

4. Create a business plan with a budget.  

5. Obtain a Federal Employer Identification Number, submitting IRS Form SS-4.  

6. Develop organizational bylaws (i.e., the rules by which you will operate).  

7. Hold and document your first board meeting.  

8. Review IRS Publication 557, instructions for filing for tax exemption.

9. File IRS Form 1023 if you are applying to become a 501(c)(3) tax exempt organization (preferably within 15 months of the date of incorporation) and file annual returns with the IRS.

10. Pay filing fees:  

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• The user fee for Form 1023 is $600.​

• The user fee for Form 1023-EZ is $275.

• ​The user fees must be paid through Pay.gov when the application is filed.

• ​These amounts are subject to change; the IRS publishes the latest user fee information at IRS.gov, keyword "user fee;" you can also contact Customer Account Services for the latest information.

11.  Comply with state laws governing charities. 

We are nonprofit specialists with years of experience in this area.  Whether you’re considering the benefits of forming a nonprofit or looking for legal support for an existing organization, we can help.  Please give us a call to discuss your business needs.