How do I establish a nonprofit organization?
Forming a new nonprofit is a process that involves two distinct stages. Generally, you will need to establish your organization by filing articles of incorporation with the appropriate agency in your state (usually the secretary of state). You will also need to secure federal income tax exemption by filing the appropriate forms with the Internal Revenue Service. Inquire at any Center library or the Cooperating Collection nearest you for the name of a technical assistance group that assists new and emerging nonprofits. Your local bar association may be able to direct you to "pro bono" or reduced-cost legal services as well. See also our FAQ "Where can I find pro-bono legal help for my nonprofit organization?" Please be aware that it usually takes 4 to 6 months to go through the process.
In order to procure and file the appropriate forms required to apply for nonprofit incorporation, you may want to contact your state charity registration office. Be aware that procedures vary from state to state; you should consult with an attorney or an appropriate agency whose staff has experience in this area. For your Federal tax-exempt status application, please refer to the IRS's FAQs About Applying for Tax-Exemption. Publication 557: Tax-Exempt Status for Your Organization, is available for download in PDF format from the IRS site.
Electronic Resources on How to Start a Nonprofit Organization Include:
Print Resources on How to Start a Nonprofit Organization Include:
- Blazek, Jody. Tax Planning and Compliance for Tax-Exempt Organizations: Rules, Checklists, Procedures. 4th ed. Hoboken, NJ: John Wiley & Sons, 2004. Step-by-step guide to forming a nonprofit organization that meets the requirements for a federal tax exemption under 501(c)(3) of the Internal Revenue Code.
- Conners, Tracy Daniel (ed.) The Nonprofit Handbook: Management. 3rd ed. New York, NY: John Wiley & Sons, 2001. Comprehensive reference guide to the policies and procedures shared by small and medium-sized nonprofit organizations. Contains drafts of policies and procedures as well as sample plans, forms, records and reports.
- Gose, Ben. "America's Charity Explosion." Chronicle of Philanthropy 17 (6 January 2005) p. 6-9. Discusses whether there are too many charities in the sector, providing opinions from various nonprofit leaders. While some suggest newly-created charities provide essential services, others argue that they lead to inefficiencies and greater competition for funding.
- Grobman, Gary M. The Nonprofit Handbook: Everything You Need to Know to Start Up and Run Your Nonprofit Organization. 4th ed. Harrisburg, PA: White Hat Communications. 2005. The legal guidebook for establishing nonprofit organizations is divided into two parts, one for practitioners and another shorter section for students of the nonprofit sector. Topics covered in Part 1 include incorporation, bylaws, board of directors, mission and vision statements, tax-exemption, ethics, risk management, personnel issues, fundraising, lobbying, communications and use of the Internet, and other miscellaneous administrative issues. Part 2 provides general information on the nonprofit sector with chapters covering history and theory. Includes sample bylaws.
- Hopkins, Bruce R. Starting and Managing a Nonprofit Organization: A Legal Guide. 4th ed. Hoboken, NJ: John Wiley & Sons, 2004. The book is an exploration of the fundamental laws affecting the operation of nonprofit organizations. Hopkins examines virtually all aspects of starting and operating a nonprofit group, including reporting revenue, tax exemption, regulation of fundraising, compensating the nonprofit employee, lobbying, and successful techniques for using for-profit subsidiaries, partnerships, and planned giving.
- Kirschten, Barbara L. Nonprofit Corporation Forms Handbook. 2006 ed. Eagan, MN: West Group, 2006. Covers registration and reporting requirements for IRS-designated tax-exempt organizations and contains sample forms for incorporation and operation of nonprofit organizations in many states.
- Kunreuther, Frances. "To 501(c)(3) or Not to 501(c)(3): Is That the Question?" Nonprofit Quarterly 10 (Winter 2003) p. 26-9. For some groups, the 501(c)(3) incorporation may not further their work. The article provides some considerations that should be examined.
- Linnell, Deborah. "Founders and Other Gods." Nonprofit Quarterly 11 (Spring 2004) p. 8-17. Explores the life cycle of a nonprofit, focusing on the role of the founder, based on work done by Karl Mathiasen. The transition from the vision of the founder to a professionally run organization can be tricky, and some founders are more able to facilitate the migration better than others.
- Mancuso, Anthony. How to Form a Nonprofit Corporation. 7th ed. Berkeley, CA: Nolo Press, 2005. Written by an attorney, this is a practical step-by-step guide to forming a nonprofit organization that meets the requirements for a federal corporate income tax exemption under Section 501(c)(3) of the Internal Revenue Code.
- Nonprofit Connection. Setting Up a Nonprofit Organization: What To Do Before You Incorporate. 3rd ed. Brooklyn, NY: Nonprofit Connection. 2000. Advises on establishing a business plan and meeting various legal requirements of a tax-exempt entity. Also shows a sample three-year budget.
- Olenick, Arnold J. and Philip R. Olenick. A Nonprofit Organization Operating Manual: Planning for Survival and Growth. New York, NY: The Foundation Center, 1991. Addresses the essential financial and legal aspects of managing a nonprofit organization. Divided into four parts: 1) Long-Range Considerations 2) The Vital Role of Financial Management 3) Operational Management 4) Outside Accountability.
- Pakroo, Peri H. Starting & Building a Nonprofit: A Practical Guide. Berkeley, CA: Nolo Press. 2005. Using non-technical language, the book explains the basic processes for creating a nonprofit: incorporating and selecting a name, planning, budgeting, choosing a board, hiring, fundraising, insurance; communications, accounting, and marketing. Appendices include numerous forms, checklists, and information about related state agencies.
- Starting a Nonprofit. Washington, D.C.: National Minority AIDS Council, [2003]. This manual is designed to facilitate the ability to quickly and effectively start a nonprofit, register it with state officials, and obtain tax-exempt status from the Internal Revenue Service.
- Tesdahl, D. Benson. The Nonprofit Board's Guide to Bylaws: Creating a Framework for Effective Governance. Washington, D.C.: BoardSource, 2003. Provides a basic definition of bylaws and an overview of related issues and area bylaws.
- Warda, Mark. How to Form a Nonprofit Corporation. 3rd ed. Naperville, IL: Sphinx Publishing, 2004. Provides basic information about the steps involved in establishing a nonprofit organization, and the methods for protecting tax-exempt status. Covers start-up procedures, applying for tax exemption, running a nonprofit corporation, and fundraising. Numerous checklists and worksheets are included. Appendices include state-by-state list of nonprofit laws, a sample document of by-laws, and nonprofit legal forms.
For more books and articles on starting a nonprofit organization, try searching our Catalog of Nonprofit Literature (CNL), the Center's bibliographic database. You could start searching on the subject "Nonprofit organizations--establishment and termination".
Many of the books and articles found through CNL can be located in Center Libraries and some Cooperating Collections. It is best to call ahead to verify a specific library's holdings.
If the nonprofit you are establishing is intended to give money away, see the FAQ entitled "Where can I find information on starting a grantmaking foundation?"
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