How To Start a Nonprofit in Iowa in Seven Steps

Decide on a unique name that aligns with your organization’s purpose. Find out if it is available in Iowa using the Iowa Secretary of State’s business entity name search tool. You can search the United States Patent and Trademark Office (USPTO) trademark database to see if the name is trademarked by someone else. Check for domain name availability online using websites like GoDaddy and Google Domains. You can also search for the name you want on the internet to see if it’s already used as a website.

In Iowa, a nonprofit corporation must have a board of directors to help guide and oversee the organization. While Iowa law requires a minimum of one director, the IRS requires at least three directors for tax-exempt status. As practice most nonprofits have several board members to bring diverse perspectives and skills. The board provides corporate governance, meaning they make important decisions and ensure the nonprofit follows laws and the nonprofit’s rules. Their tasks include:

• Setting goals and determining how to achieve them

• Overseeing finances to make sure money is spent wisely

• Developing policies to guide the nonprofit's actions

• Holding the organization accountable for its mission

Additionally, board members use their networks to connect the nonprofit with resources and often participate in fundraising activities. When choosing board members, look for individuals with skills and experience that match the nonprofit's mission. For example, a nonprofit cat shelter might look for a veterinarian to serve on its board because of their valuable expertise in animal health and welfare.

To officially create your nonprofit, you must draft Articles of Incorporation in PDF format and then upload and file them with the Iowa Secretary of State. Filing requirements under the Iowa Nonprofit Corporation Act or Iowa Code Section 504.202 include the following:

• Nonprofit’s name

• Address of the corporation's office

• Registered agent service’s name and address

• Name and address of each incorporator

• Whether the nonprofit will have members

• Information about the distribution of assets on dissolution

• $20 filing fee

The incorporators (people starting the nonprofit) must sign the articles. You can file online through the Iowa Secretary of State’s website, where you’ll need to create an account to access the filing system. After you file, the state will issue a Certificate of Acknowledgment to the nonprofit.

Or you can let our trusted partner LegalZoom handle your nonprofit creation starting at $99 plus filing fees.

Bylaws provide a governance structure for your nonprofit and outline the roles and responsibilities of the board of directors and officers. Bylaws set rules for how your nonprofit will operate like:

• How to conduct the meetings

• How to choose new board members

• How to make decisions

• Methods for resolving issues or disagreements

Your nonprofit must have bylaws to get tax-exempt status from the Internal Revenue Service (IRS).

Schedule the first organizational meeting for your board of directors. During this meeting, the board will adopt the bylaws, elect officers, and address other important matters, such as setting initial goals or discussing upcoming projects. Take notes, called minutes, to keep a record of what was decided and discussed. These minutes help ensure everyone is on the same page and provide a reference for future meetings.

An EIN is like a Social Security number for a nonprofit corporation and helps the IRS identify your organization for tax purposes. Nonprofits need an EIN to open a bank account and hire employees. To apply for an EIN online, go to the IRS website to complete and submit the application. After you submit the form, you'll get the EIN immediately.

To apply for federal tax-exempt status, a nonprofit corporation needs to fill out special forms for the IRS. If the nonprofit is a 501(c)(3) organization, which includes charities, religious, and educational groups, it should use Form 1023 or the simpler Form 1023-EZ. If they can use the 1023-EZ, they must submit it online using the Pay.gov website. If the nonprofit is a 501(c)(4) social welfare organization, it should complete Form 1024-A. For other types of nonprofit organizations, like those under 501(a), Form 1024 is the right one to use. Once your tax-exempt status is approved, you will receive a determination letter from the IRS.

In Iowa, a nonprofit recognized as tax-exempt by the IRS is automatically exempt from paying state income tax. However, if the nonprofit earns unrelated business income, it must pay taxes on that money. To report this unrelated business income, the nonprofit must fill out a special form called Iowa Form 1120. Nonprofits still must pay state sales tax on things they buy unless some other sales tax exemption applies. You can find more information about nonprofit state tax exemptions on the Iowa Department of Revenue website.