Creating a tax-exempt nonprofit is a process with many requirements. The following is a fairly detailed list of the steps taken to start an IRS-recognized tax-exempt nonprofit:
-Decide the cause your nonprofit will serve.
-Decide on a name for the nonprofit organization and look in the records of your state’s Division of Corporations to see if it is available (and if it is not being used by someone else in your state).
-Identify a minimum of 3 people who have agreed to serve as Directors in the organization. TIP: Always have an odd number of Directors (for voting purposes).
-Prepare your organization’s Articles of Incorporation (IRS wants language specific to nonprofits to be inserted here; make sure you write it properly).
-Send the applicable filing fee along with the Articles of Incorporation to your state’s Corporations Division for filing.
-When you receive documents that inform you that your organization has been registered with the state, put them in your corporate book (book that contains most of the important documents of the organization).
-Or apply for the EIN or designate someone to apply for it for you. You will need information from the Articles of Incorporation to apply for the EIN.
-When you receive your EIN, put it in your corporate book and take a copy, along with a copy of the Articles of Incorporation, to go to a bank to open a bank account. Apply for an account for a non-profit organization; fees are sometimes lower on nonprofit accounts.
-Prepare bylaws that include how directors / officers are appointed, and also prepare a Conflict of Interest Policy.
-Have a special meeting of the Board of Directors to adopt the Bylaws and Conflict of Interest Policy and appoint the officers of the organization.
-Prepare the federal tax exemption application and mail it to the IRS with the appropriate filing fee.
-When you receive your 501 (c) determination letter from the IRS, place it in your corporate book.
-Please contact your state to register and obtain authorization to solicit donations in your state. You must register in all states where you will request donations. Failure to register properly can result in fines, penalties, and the loss of your ability to solicit donations.
-Place the authorization to request donations in your corporate book.
-Brand your organization’s name to protect the goodwill created by your hard work.
Note: speak to an attorney if you have legal questions.