{"id":4811,"date":"2016-04-04T10:47:45","date_gmt":"2016-04-04T15:47:45","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/incorporation-and-legal-structures\/checklist-starting-a-non-profit-corporation.html"},"modified":"2025-11-10T00:00:00","modified_gmt":"2025-11-10T05:00:00","slug":"checklist-starting-a-non-profit-corporation","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/checklist-starting-a-non-profit-corporation.html","title":{"rendered":"Starting a Nonprofit Corporation Checklist"},"content":{"rendered":"\n
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Starting a Nonprofit Organization Checklist<\/h1>\n\n
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\n By Jade Yeban, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Creating a nonprofit organization<\/span> is the process of forming a legal entity to further a charitable, educational, or religious mission. This process involves defining your purpose, filing articles of incorporation<\/span> with the state, and applying to the IRS<\/span> for 501(c)(3) tax-exempt nonprofit<\/span> status.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Starting a nonprofit organization<\/span> can be a rewarding way to give back to your community. Nonprofits<\/a>, unlike for-profit<\/span> businesses<\/span>, focus on achieving a mission. Nonprofits can have a charitable, educational, or religious mission. They can also focus on scientific and literary causes.<\/p>\n

This article is your go-to guide, offering a step-by-step guide for budding entrepreneurs<\/span> eager to make a difference. By following this checklist, you can successfully launch and run a nonprofit.<\/p>\n

Form your nonprofit with confidence.\u202fOur trusted partner LegalZoom has packages starting at $99 + filing fees.<\/a><\/i><\/b><\/p>\n

Why Create a Nonprofit Corporation<\/span>?<\/strong><\/h2>\n

Nonprofits address important issues and needs that are often overlooked. By starting a nonprofit, you’re not just a business owner. You’re an advocate for a cause, too. Unlike shareholders<\/span> in a for-profit<\/span> business<\/span>, you’re not in it for personal gain. Instead, you’re driven by a mission to improve society. Plus, nonprofits can engage in fundraising<\/span>, receive charitable donations<\/span> that are tax-deductible<\/span> for the donors, and even influence public policy through limited lobbying<\/span> activities.<\/p>\n

Why do people create nonprofits? Often\u00a0it is because they have the drive to make a difference for a cause that is close to their hearts or has affected them personally in some way. Simply put, nonprofits handle the hard issues and make the world a better place.<\/p>\n

Many nonprofits are organized as corporations<\/strong><\/a>. By incorporating, you can ensure that your personal assets and those of other members are protected from the debts and liabilities of the organization.<\/p>\n

Tax Benefits<\/span> of a Nonprofit Corporation<\/span><\/strong><\/h2>\n

One of the biggest perks of a nonprofit is its tax-exempt status<\/span>. Because the mission of a nonprofit is to work toward the public good<\/span>, the organization is usually eligible for federal and state <\/span>tax<\/span> benefits<\/span><\/a> not available to for-profit<\/span> organizations<\/span>. Under the Internal Revenue Code<\/span>, specifically section 501(c)(3), qualified tax-exempt organizations<\/span> don’t pay federal <\/span>income tax<\/span>. This means more of your fundraising<\/span> efforts go directly to your cause.<\/p>\n

Additionally, people who make contributions to charitable organizations<\/span> may receive a tax deduction<\/span><\/a>. These apply to people who donate money or goods to the organization. This can help reduce their tax liability<\/span>. However, be aware of rules around unrelated business<\/span> income and ensure your activities align with tax law<\/span>.<\/p>\n

Applying for 501(c)(3) Status<\/strong><\/h2>\n

One of the basic steps to forming a nonprofit corporation<\/span> is filing for the correct tax status. The application process to claim 501(c)(3) tax-exempt status<\/span><\/a> begins with the Internal Revenue Service<\/span><\/a> (IRS<\/span>) under the tax code<\/span>, determining if your organization is eligible for this tax exemption.<\/p>\n

This process involves submitting a detailed application, including information about your organization’s purpose, governance, and financial structure. The application process is not finished until the IRS<\/span> Form<\/span> 1023<\/a> application for recognition of exemption is completed and submitted to the IRS<\/span>.<\/p>\n

Understand that this process can be complex and might require professional advice. Meeting these criteria sets you apart from for-profit<\/span> entities and makes your organization eligible for certain tax benefits<\/span>.<\/p>\n

Nonprofit Checklist<\/strong><\/h2>\n

The following is a step-by-step guide to forming your nonprofit. Keep in mind that your nonprofit’s startup<\/span> requirements might vary from the list below, depending on the specific type of business you are in and where your business is located.<\/p>\n

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  1. \n

    Define your mission:\u00a0<\/strong>Clarify what your nonprofit organization<\/span> will achieve. Write a mission statement<\/a> for your nonprofit organization<\/span>.<\/p>\n<\/li>\n

  2. \n

    Conduct some research:\u00a0<\/strong>Understand the needs in your area and check if other organizations are addressing them.<\/p>\n<\/li>\n

  3. \n

    Create a <\/strong>business plan<\/strong><\/a>:\u00a0<\/strong>Outline how your nonprofit will operate and sustain itself.<\/p>\n<\/li>\n

  4. \n

    Choose a <\/strong>business name<\/strong><\/a>:\u00a0<\/strong>Select a unique name that reflects your mission. Keep in mind that your state may require that your nonprofit corporation<\/span>‘s name include an identifying word such as “incorporated,” “limited,” “corporation,” or an abbreviation of such a term.<\/p>\n<\/li>\n

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    Search the <\/strong>availability<\/strong><\/a> of your business name:\u00a0<\/strong>Look for similarly existing names, too. This can cause confusion later on, so it’s best to steer clear of existing similar names.<\/p>\n<\/li>\n

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    Register your <\/strong>nonprofit’s name<\/strong><\/a>:\u00a0<\/strong>You can do this with the secretary of state’s office in your state.<\/p>\n<\/li>\n

  7. \n

    Incorporate your <\/strong>nonprofit organization<\/span><\/strong><\/a>:\u00a0<\/strong>Decide where to incorporate<\/a> your nonprofit. File paperwork, such as\u00a0your articles of incorporation<\/span><\/a>,\u00a0with your state to create a legal entity. Pay any related fees. This offers limited liability<\/span> protection.<\/p>\n<\/li>\n

  8. \n

    Apply for tax-exempt status<\/span>:\u00a0<\/strong>Submit Form 1023 to the IRS<\/span> for 501(c)(3) recognition. You may be able to receive a tax exemption<\/a> from the local, state, and federal governments.<\/p>\n<\/li>\n

  9. \n

    Set up your <\/strong>board of directors<\/span><\/strong><\/a>:\u00a0<\/strong>Recruit a diverse and skilled board of directors<\/span> who can guide your organization. This board might also be called a nonprofit board.<\/p>\n<\/li>\n

  10. \n

    Create your <\/strong>nonprofit corporation<\/span>‘s bylaws<\/span><\/strong><\/a>:\u00a0<\/strong>Draft and adopt bylaws<\/span> for your nonprofit corporation<\/span>. These bylaws<\/span> will serve as the rules of your nonprofit corporation<\/span>.<\/p>\n<\/li>\n

  11. \n

    Obtain business licenses and permits:<\/strong>\u00a0You can do this from the:<\/p>\n