Starting a Non-Profit: A Comprehensive Guide

Starting a non-profit in the United States typically involves forming a 501(c)(3) organization, a type of non-profit dedicated to charitable purposes. This guide will walk you through the process step by step, including incorporation, post-incorporation formalities, IRS application, and state-level registration.

1. Incorporation

The first step in forming a non-profit in the US is to incorporate as a non-profit corporation. This involves filing a Certificate of Incorporation with the Secretary of State in the state where you plan to incorporate. Different states have different requirements, and some states even have specialized provisions for non-profit corporations.

For example, New York has specific rules that need to be followed. Additionally, certain states may also allow Limited Liability Companies (LLCs) to be used for non-profit purposes. It's important to consult the relevant state's guidelines to ensure compliance.

2. Post-Incorporation Formalities

After incorporating, you will need to prepare bylaws and hold an organizational meeting. The bylaws document should be carefully drafted, as it will become part of your tax-exemption application to the IRS. The IRS prefers that the board of directors be independent, and it wants to ensure that charitable donations do not unjustly benefit the non-profit’s directors, officers, and members.

It's also a good idea to establish a conflict of interest policy. The IRS provides a sample policy that you can use as a reference. Once your bylaws and conflict of interest policy are finalized, gather all the directors and create a formal document. This document should include the approval of the certificate of incorporation, bylaws, conflict of interest policy, and authorization to open a bank account. It should also include a request to the IRS for tax-exempt status.

3. IRS Application

The next critical step is to apply for federal tax-exempt status with the IRS. For 501(c)(3) organizations, you need to file Form 1023. Alternatively, if your organization meets certain criteria, you may be eligible to file Form 1023-EZ. This application requires extensive information, including details about your organization's activities, director and officer information, financial projections, and fundraising plans.

The form is quite detailed, and all the required information must be included in the Certificate of Incorporation and bylaws. If any information is missing, the IRS may deny your application. In some cases, the IRS may contact you to provide additional information or clarification. If everything goes smoothly, you can expect a determination letter within 6 to 12 months.

4. State-Level Registration

Depending on the state in which you operate, you may need to register your non-profit with the state agency responsible for regulating charities. For instance, in New York, organizations raising funds need to register with the Charities Bureau. Each state has different requirements, but a Uniform Registration Statement (URS) provides a basic framework. Many states accept the URS, but you may also need to submit additional attachments specific to your state.

The URS helps give an overview of what is needed for registration. However, the specific requirements can vary widely, so it's crucial to check the guidelines for the state in which you operate.

Remember, while this guide provides general information, it is not legal advice. If you need specific guidance on any of these steps, it is highly recommended to hire a lawyer who can provide you with personalized advice and assistance.

Keywords: non-profit incorporation, 501c3 organization, immigration, charity