So you want to save the whales. Or the puppies. Or the children. Or the trees. Or maybe it’s something else? In all the time I’ve spent working in the nonprofit sector, nothing is as inspiring to me as the individuals and small groups that come together to create a new nonprofit organization with new ideas, passion, and creativity for how to make our world a better place. You’re not scared of a bit of paperwork, right? What about waiting around for things to get approved? Good – because if you want to build something that is bigger than yourself, it’s not going to be easy. But it isn’t really going to be that hard either. We’ll show you the basics of starting a nonprofit so you can start building your brand and working on your mission.
How to become a real nonprofit
It’s hard to start building a real nonprofit when.. well when you’re not really a thing yet. The most basic piece of your organization looking like a real thing is being registered as a real business organization. Business registrations are controlled by the state you live in, and filing requirements vary, but the very first step in building a great nonprofit is having a legally defined organization to work with. This process can be complicated and we’ve got some other resources available to help you here: California nonprofit checklist.
Employer Identification Number – EIN
Once you’ve got a legal organization to work with, the next step is getting an employer identification number. This is basically your registration number as a business, and some states include this in the initial registration process. If not, you can get one online with the IRS in just a few minutes.
Federal Nonprofit Status
For most people, filing for nonprofit status with the IRS is the scariest part of this process – but fear not! If you’re planning on starting out small and growing over time, like our favorite organizations have done, then you can use the super streamlined 1023EZ form. This little two pager can be submitted online and usually only takes a couple of weeks to get approved.
And that’s it, right?
Well not yet. Once all of those forms have come back, there are still additional filing requirements based on your state, county, and even city. Usually there is a charitable solicitation registration, a state or local filing to be exempt from sales taxes, an annual report with a state taxing agency, and a business license in your city or county. To find out all the requirements for your area, check out a google search.
I didn’t start this nonprofit just to file paperwork
I know, and at this point you’re done for now. But there will always be a handful of forms and filings that are due at various times during the year. The best thing you can do is make a list and set some calendar reminders so it doesn’t feel so overwhelming. But if you want to build an organization that has the potential to make a difference beyond your personal involvement, this is part of the trade off.
Every time I’ve gone through this process, it doesn’t really feel real to me until I’ve got a bank account. Once I can see my nonprofit name on the debit card, and I can log in to online banking and see my new organization name – this is when I know I’m ready to get started. Opening a bank account is really easy after you’ve done all the steps above. Just take copies of all the stuff that people sent you when completing the steps above to the bank you want to start
Need help deciding on a bank? Check out out guide to opening a nonprofit bank account
Congratulations, your nonprofit is now a real thing
But at this point, it’s still only a real thing on paper. There are a few more steps until you look like a real thing to the public. Luckily, we’re here to help.
Check out part two of this guide – how to look like you’re a real nonprofit.