Setting up a new nonprofit organization with tax-exempt status can be an overwhelming process – with state formation filings, state tax applications, IRS filings, and more.
- Lengthy paper work. The applications take a lot of time to complete – the IRS estimates that it takes a novice 105 hours to complete their Form 1023 application alone. The state filings are additional work.
- Government review time. If any mistakes are made in the initial applications, some organizations have found delays of 15 – 20 months in getting their final approval. It is essential to get the applications done the right way, the first time, so that donors can start making tax-deductible donations to your project.
The Cullinane Law Group helps new nonprofits get started quickly and easily. We handle all of the steps so our clients obtain 501c3 status in record time.
Each organization is unique in its formation applications. The steps here are for average sized public charities (foundations, small booster clubs, churches, associations may have different steps).
Starting a New Nonprofit
1: Make a Plan. Decide if you really need to start another nonprofit, or if your philanthropic ideas can be utilized in an already-existing entity. Make a plan, do your research, create a team.
2: Select a Name.
3: Recruit a Board of Directors. Who should serve on an initial board of directors? How many do we need?
4: Select a Legal Structure – nonprofit or other.
5: File the Certificate of Formation with the State.
Note: In many states, such as Texas, the Secretary of State’s form to obtain nonprofit corporate status meets minimum state law requirements, but does not include any additional statements that the IRS might require for tax-exempt status. This is where many novices make their first mistake – if they miss this “optional” language – they may need to re-file and pay additional amendment fees later.
6: Draft Bylaws that govern the operations of the nonprofit. What are bylaws?
7: Hold an Organizational Meeting of Directors.
8: Apply for a Federal Employer Identification Number (EIN).
9: How to get 501c3 status? Next – Prepare the 1023 Federal Tax-Exemption Application [to get 501(c)(3) Status]. This is the 501(c)(3) “tax-exempt” part.
10: Apply for State Exemptions & Other Permits, including sales and use taxes, property tax exemptions, charitable solicitation permits, and more.
Would you like help? We are here for you!
Please let us know if you’d like to learn about turn-key solutions to starting your nonprofit organization with ease.
