Non Profit Organization Guide

How to form a non profit organization in the United States

A realistic look at starting a non profit organization:

Starting a non profit organization can be a quick process or a long drawn out process.  97% of income brought in by non profit organizations in the US is brought in by only 3% of all formed non profits.  This means that the majority of non profit organizations in the US are underfunded organizations hanging on with shoestring budgets and not managed very well.  We think that a simple realistic look at the future of your idea is in order.  If your idea is not really going to generate that much money or donations, that’s perfectly fine.  Accepting this fact at an early stage of your planning can save you a TON of time and stress.  Most non profits are not tax exempt.  Simply because it takes too much time to get all your directors together and too much paperwork to accomplish it and maintain this distinction.  Think about it.  You’re asking for your organization to be completely tax free.  The IRS and the state(s) you’ll be in do not want to just give this away to any organization.  They are going to require a lot from you.  We’ve found that many nonprofits are best served by forming a non profit organization or non profit corporation, but just paying your taxes.  You will not be able to get the massive donations, but you will be able to focus more on what you actually want to accomplish with your new non profit organization.  You can still collect donations; it’s just that the donors won’t be able to write it off.  Another great idea is to eliminate your profit by the end of the year.  So if you know in November that your nonprofit organization is going to have $10,000 of profit and you are not tax exempt, if you keep that profit in the company you’ll pay corporate income tax on that $10,000, which currently is at 15%.  If you give away $9,000 of that to another nonprofit organization that may be tax exempt, you then would only pay 15% corporate income tax on $1,000.  The basic goal is to run your nonprofit that doesn’t have tax exempt status like a regular for-profit corporation and try to eliminate as much of your taxable income as possible but still meet the goals and desires of the company.  The reality is that our local, state and national governments are broke and there are a lot of lawmakers that want to eliminate this deduction for huge corporations anyway; so counting on this long term might not really be a great strategy anyway.
So if you simply want to form a non profit organization and not worry about trying to become tax exempt (501c3 status), the process is fairly quick and easy in most states. You or we can form this at the state level for you.  We recommend doing it in whatever state you are based out of. 
If you do want to go for tax exempt status, that is fine.  Knowing that it’s a long process before you start will make the process less stressful for you.  We can still get your new non profit organization formed quickly for you.  Get an EIN number, hold your board meetings and fill out the paperwork to request tax exempt status with the IRS.  (Our Federal Government).  After you get this status you can then apply within your state to be tax exempt at the state level for income taxes, sales tax, and quite often property tax. While you’re applying for tax exempt status at the state level, you can also be applying for registration as a charity to fundraise.   When you hire us to start your non profit, we file the articles with the state with the appropriate language so that your application will not be rejected because of your articles of incorporation.
One of the confusing things about nonprofits is all the various types.  Basically non profit organizations are for the most part, technically non profit corporations, formed by filing non profit articles of incorporation. 
If a non profit is not a religious non profit or a public benefit non profit, it is by default a mutual benefit nonprofit which ussually will not get tax exempt status with the IRS or the state.

Beneath this entity type, there are two main types of purposes:

-Mutual benefit organizations; like homeowners associations, chambers of commerce, downtown business associations, trade associations, or any group of similar people or businesses that get together to champion a cause that would benefit all of them.  These organizations are typically not tax exempt.

OR:

-Public benefit organizations; like churches, schools, educational, or scientific organizations.  Something that anyone and everyone could have the opportunity to benefit from.  These are most likely the type of organizations that anyone and everyone could or have a reason to donate to.
-Cooperative associations:  typically have shares and you set a minimum amount of shares required to become members.  Associations have directors also but no officers.

Do your research and plan ahead:

Depending on the type of organization you plan to form, you may need one of your members or officers to be experienced in applying for and writing federal and state grants. New non profits face stiff competition for such funding. Also, figure out if your fundraising can be handled by volunteers or will you need to shop around for a good professional fundraiser? We offer some useful information for you on the following pages.
To further complicate forming a nonprofit, many states use different lingo for the document you use to start a non profit. Here’s a rundown:

Formation Document Names By State:

Articles of Incorporation:

AK, AZ, AR, CA, CO, DC, FL, GA, HI, ID, IL, IN, IA, KY, LA, ME, MD, MI, MN, MS, MO, MT, NE, NV, OR, PA,RI, SC, SD, TN, UT, VT, VA, WA, WV, WI, WY

Certificate of Incorporation:

NY, OK, DE, CT,

Certificate of Formation:

TX, AL

Articles of Agreement:

NH

Articles of Organization:

MA

Not for Profit Articles of Incorporation

KS

Other Non Profit Facts:

States that require a minimum number of incorporators:

OK – 3, AK – 3, NH – 5, NM – 3, NY – 3, TX – 3,

States that allow a corporation to be the incorporator:

KS, ME, WA, NM, PA

States that don’t provide a form:

CA, NE, GA, and IA don’t offer domestic non profit articles of incorporation, but we have our own, drafted from their laws.
California offers samples with the minimum required by law and meant as a guideline for preparing your own articles. We offer California non profit documents here for free.

• Articles of Incorporation Templates
• Non-profit Articles
• Mutual Benefit Articles
• Public Benefit Articles
• Religious Corp Articles

• General nonprofit resources
• Do It Yourself Non Profits
• Non Profit Incorporation Service

• State Specific Non-profit
• California Nonprofit
• Delaware Nonprofit
• Florida Nonprofit
• Nevada Nonprofit
• New York Nonprofit
• Texas Nonprofit
• Washington Nonprofit