Planning to Start a Nonprofit
Before you jump into the steps required to start a nonprofit, you should plan for it–much like you’d plan for starting a business. Here are some things you’ll need in order to start a nonprofit.
|A Governing Board and Officers||Charitable nonprofits must have at least three unrelated board members governing them. You may be on the board when you start a nonprofit, but you must have at least two other people ready to serve with you.
When you start a nonprofit, you must also name three officers: President, Treasurer, and Secretary. Board members may serve officers. One person may hold multiple offices, except the President may not also be the Secretary or Treasurer.
|A Plan||In order to attain tax-exempt status when you start a nonprofit in California, you will need to state the purpose of your organization and provide a list of potential activities and goals of the organization.|
|A Three-year Budget||Nonprofits run a lot like businesses; they have revenues coming in (donations) and public goods/services going out. You should plan for your first three years of operations when you start a nonprofit. Keep in mind that budgets are just projections. They can change as your operations begin, but you have to have a plan in place to attain tax-exempt status.|
|A Principal Place of Business||When you start a nonprofit, it must be registered at a physical address (not a post office box). This can be your home or an existing office, but keep in mind that the address will listed in public records. We can discuss how to best proceed.|
|Plan for Accounting and Taxes||You will need to account for your nonprofit's funds and file yearly taxes for the organization. The size of your budget will determine how complex your taxes are.|
Steps to Start Your Nonprofit
Once you’re ready to start a nonprofit, here are the required steps and the government fees associated with them.*
|Obtain an EIN (IRS Form SS-4)||When you start a nonprofit, you must establish a tax identification number with the IRS.||No fees|
|Prepare and File Articles of Incorporation||Articles of incorporation are filed with the California Secretary of State.||$30 fee|
|Prepare Your Organization’s Bylaws||When you start a nonprofit, you must draft bylaws that specify how it will be governed. These can be customized to meet the needs and structure of the nonprofit you start.||No fees|
|Prepare an Agenda for Your First Meeting||In order to formally start a nonprofit, you must hold a meeting, at which your board of directors takes several actions. I will customize the agenda to your organization's needs.||No fees|
|Prepare Meeting Minutes for Your First Meeting||The events of each board meeting must be memorialized.||No fees|
|Prepare and File Application for Federal Tax Exemption (Form 1023 or Form 1023-EZ)||In order for your organization to receive tax-free income and for contributions to be tax-deductible, the IRS must grant you 501(c)(3) status.||$400-850 fee, depending on the size of the organization|
|Prepare and File Application for California Tax Exemption (Form 3500 or Form 3500A)||In order for your organization to receive tax-free income and for contributions to be tax-deductible, California regulators also must approve your organization.||$0-25 fee, depending on the size of the organization|
|Prepare and File Initial Statement of Information with the California Secretary of State (Form SI-100)||When you start a nonprofit, you must publicly declare your place of business and an agent for service of process.||$20 fee|
|Register with the California Attorney General's Registry of Charitable Trusts (Form CT-1)||When you start a nonprofit in California, you must register with the Attorney General's office.||$25 fee|
* Government fees are not included in the costs for Tuple Legal‘s services.