Starting a Nonprofit
A nonprofit is a great way to turn your vision and passion for helping others in your community into a reality. Nonprofits cross numerous areas including: religious, educational, human service oriented, animal welfare, and more. Before you start a new nonprofit, it is important to identify that the need is unmet in your community through existing organizations.
Preparing to start a Nonprofit is very important and can help you succeed. More than half Nonprofits do not make it through their first year because they did not plan and research before starting.
Before starting a Nonprofit
It is important to do some research:
- Will your nonprofit make a difference for someone/something?
- What other organizations in your community address this need?
- How will your organization be different?
- Why is your organization needed if others are doing this work? already?
Incorporating and applying for 501(c)(3) status will allow you to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Being a nonprofit 501(c)(3) will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.
Steps to Start a Nonprofit
Name Your Organization
Make sure the name is available and meets state requirements by searching Search SunBiz.
It is also advised to review the United State Patent and Trademark office database. If you come across a company with a similar name, it’s a good idea to research your state’s unique business naming laws to see if the resemblance will prevent you from using the name you want.
Filing Your Articles of Incorporation will be done in Step 3.
Plan Your Organization
Define mission, vision, and values.
Mission: The core work. What you will do to make your vision a reality.
Values: The guiding principles for which you stand; the ideals you refuse to compromise as you conduct your mission in pursuit of your vision.
Goals: A timeframe year plan (ex 1-5 years) of achievements you will work towards.
Strategies: The broad courses of action you will take to achieve your goals.
Appoint a registered agent & incorporator
Appoint a registered agent – responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours.
Appoint an Incorporator – person(s) who signs the Articles of Incorporation for your nonprofit (prepares, files, and register new business)
Identify at least 3 Board Members
Florida director requirements:
- Number: minimum 3
- Qualifications: Natural person 18 years of age or older. One director may be 15 years of age or older if permitted by board of directors or bylaws. No residency requirement. No membership requirement.
- Term: 1 year
- Quorum: majority (Directors younger than 18 years of age may not be counted toward a quorum)
- Committee: minimum 2 directors
Florida officer requirements:
- Defined in articles or bylaws. One officer prepares minutes of the directors’ and members’ meetings and authenticates records of the corporation.
- Elected by board
- Term: 1 year
- Two or more offices may be held by the same individual.
Define Office Location
Research all fees for filing
File the Proper Paperwork
Articles of Incorporation
Filing your nonprofit’s Articles of Incorporation officially mark the creation of your organization.
They document where and when the organization was formed and other information necessary to verify its existence. There are some basic provisions the IRS looks for when you apply for 501(c)(3) exemption.
Customize the articles for your organization and make sure you meet the state and IRS requirements from the start to help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.
Employee Identification Number
Apply for Employer Identification Number (EIN) Form SS.4
This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.
501c(3)
File Federal IRS Form 1023, Form 1023-EZ, or Form 1024
Obtaining 501(c) tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ.
Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.
Completing the federal application for tax exemption can be significantly easier with the assistance and support of a professional, such as a SCORE Mentor. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey – from start to tax-exempt finish!
Tax Exemptions
Apply for Federal Tax Exemptions through the IRS
Apply for State Sales Tax Exemption through Department of Agriculture
- Form DR5 “Application for Consumer’s Certification of Exemption”
Charitable Fundraising
Register for charitable fundraising (the Salutation license from the FL Department of Agriculture and Consumer Affairs).
Stay in Compliance
Form 990 is filed annually.
Develop Your Strategy
Hold your first board meeting
- Approve the bylaws
- Adopt the conflict of interest policy
- Elect directors
- Appoint officers
- Approve resolutions such as opening the organization’s bank account.
Open a bank account for nonprofit
Develop a business plan
Marketing strategy
Develop an impact measurement plan
Create a Pro-forma budget & resource development plan
Growth and Long Term Success
Outline fundraising efforts
Connect with local partners
Invite volunteers
Network, network, network!
Thank you to SCORE Orlando and the Edyth Bush Institute for Philanthropy & Nonprofit Leadership for contributing to the information provided in this guide.
