Basics of Starting a Nonprofit Organization

Starting a nonprofit organization can seem like a daunting task, but with a little planning and effort it can be done successfully. Of course, having legal counsel to assist you through the process can make a huge difference – see support for nonprofits.  Nonprofit organizations are formed for a variety of purposes, including religious, charitable, educational, scientific, or literary.

The Benefits of Setting Up a Nonprofit Organization

There are many benefits to setting up a nonprofit organization. Nonprofit organizations may be exempt from federal income tax, state and local taxes, and sales tax on items they sell. In addition, setting up a nonprofit can help you raise money for your cause. Nonprofit organizations can solicit donations from the public, which can provide a much-needed source of funding. Finally, setting up a nonprofit can give you the satisfaction of knowing that you are helping to make a difference in your community. By setting up a nonprofit organization, you can have a positive impact on the world around you.

There are a few key things you need to do in order to set up a successful nonprofit. 

What You Need to Set Up a Nonprofit Corporation:

• You need to choose a name and register it with the state where you plan to operate. 
• You will need to set up a board of directors (most states require at least three Board members to get started) 
• You will need to create and vote on a set of Bylaws. 

Establishing a Board of Directors

One of the key steps in setting up a successful nonprofit organization is setting up a board of directors. The board of directors is responsible for governing the organization and making decisions about its policies and programs. The board of directors should be composed of individuals with a variety of skills and experience. The board of directors should also be representative of the community the organization serves. 

To set up a board of directors, the first step is to identify individuals who are interested in serving on the board. The next step is to determine the size of the board and the term lengths for each director. 

Establishing Bylaws

One of the key steps in setting up a successful nonprofit organization is establishing bylaws. Bylaws are the rules and regulations that govern the organization. They should be designed to help the organization run smoothly and efficiently. The bylaws should include provisions for how the board of directors will operate, such as how often meetings will be held and how decisions will be made. The bylaws should also include provisions for how the organization will raise money and how it will spend money. In addition, the bylaws should include a conflict of interest policy to help prevent board members from using their position for personal gain. 

Once the bylaws have been approved, the next step is to implement them. This can be done by distributing copies of the bylaws to all board members and posting them in a public place. By following these steps, you can establish bylaws that will help your nonprofit organization run smoothly.

Ask the IRS for Tax Exempt Status:

In order to be exempt from federal income tax, a nonprofit organization must file an application with the IRS.  This can be done by filing Form 1023 and providing documentation about your organization’s purpose, structure, and finances. Nonprofit organizations may be exempt from state and local taxes, as well as sales tax on items they sell.

Ask your State for Tax Exemption: 

Depending on the State, you may also need to register with your state as a charity. This will allow you to solicit donations from the public. By following these steps, you can set up a successful nonprofit organization.
Setting up a nonprofit can be a rewarding experience and can provide much-needed services to the community. Ready to take that next step? Book a Quick Question Legal Session  see if starting a nonprofit is right for you.