Steps in Starting a Non-Profit Organization
1. Draft a Mission Statement
Draft a brief mission statement that describes the charitable purpose of your new organization; your
board should soon review it during strategic planning and authorize the statement.
2. Recruit Board Members
If you plan to incorporate in your state, recruit at least enough board members to meet state requirements
for a corporate board (contact state attorney's office); if you don't plan to incorporate, consider an informal advisory board
to help guide you.
3. Draft Articles of Incorporation and Get Board Approval
Articles of Incorporation specify the legal description of your organization and power to the board;
you'll need to draft these only if you plan to file for incorporation with your state; the Board should approve the Articles
4. Draft Bylaws
Bylaws specify how the board will operate and configure the staff; some states require these; some
of this information will be in the Articles if you file Articles; the board should approve the bylaws,
5. Consult Professionals
Contact a consultant and/or lawyer to help you file articles of incorporation (if you plan to incorporate),
application to IRS for tax-exemption (if you plan to seek exemption from federal taxes); you can do most of the work yourself,
but at least have a consultant or lawyer review the materials before submission.
6. File for Incorporation with Your State
Register for incorporation including submitting your drafted and approved Articles (if you plan to
incorporate); may need to submit bylaws, too; also find out what various reports the state wants from nonprofits. (Note there
is usually a fee required for filing that varies from state to state, but usually ranges between $10 and $25).
7. File for Federal Tax-Exempt Status
Apply for tax-exempt status (to be exempt from paying federal taxes); board should approve this filing
before submission. (Note there is a $500 filing fee).
8. File for State Tax-Exempt Status
Once you get federal tax exemption, file for any state tax exemptions.
9. File for Tax-Exempt Status with City Government
Apply for property tax exemption from city (if your organization will be owning property. This
is not necessary if you are only renting office space. In that case, contact your local realty association for information
about reduced rental rates for non-profit organizations. Some cities and private property owners have been known to
donate office and program space to non-profit organizations free of charge, so be sure to find out what's available in your
10. Find an Accountant and Open a Bank Account
Consult with an accountant or other finance expert to help you set up basic bookkeeping system; seek
a bank that understands needs of new, small nonprofit organizations and open an account.
11. Apply for Solicitation License
If you plan to solicit funds, your city may require a solicitation license.
12. Apply for a Bulk Mail Permit
This permit gives you a discount on bulk mailings (for newsletters, mail solicitations, etc.).
13. Apply for a Employer Identification Number (EIN)
Once you start to hire employees, get federal employer number to withhold income and FICA.
14. Purchase Workman's Comp and Unemployment Insurance
This is necessary when you start hiring employees.
15. Purchase General Liability Insurance
Every non-profit organization needs to have general liability insurance for property as well as liability
insurance to protect the Board of Directors, volunteers and staff.
Need help getting started?
offers many free services and resources to individuals or groups interested in developing new non-profit organizations.