• June 2018
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What is required to set up a non-profit organization?

Non-profits are great, but they can certainly require a lot of work to get off the ground. I am not telling you that to try and dissuade you from forming one. Having worked with several, I understand the passion involved and sometimes that passion can blind well-meaning people from the business aspects.

Your first step is to do some research. You want to look into your fundraising options, look for potential sponsors, and consider drafting a list of things that you could do throughout the year to keep money coming into your organization. You also need to decide if you’re going to provide money or services directly to your specified cause or if you’re going to donate what you raise to another charity.

Your second step is to have a plan. Just because you’re forming a non-profit doesn’t mean that you can ignore a business plan. People who donate their money, resources, or time will want to know what they are supporting. A well-written business plan can help legitimize what you’re doing. To write one, you need to make sure that you’ve completed step one!

Your third step is to complete the non-profit paperwork. You can do this on your own or you can get help from an attorney. It is very important that the documents are properly completed. If they aren’t completed properly, your organization will not be tax-exempt. You can register your non-profit in your own state or in any state that you’d like. You do this through the Secretary of State website. However, before you complete and turn in the documents, make sure that you do a name search. You can’t use a name that’s already in use or one that is so similar to an existing business name that the public could be confused. You pay the state filing fee with the completed paperwork.

Your fourth step is to complete the IRS form. In order for you to be granted tax-exempt status, you must complete Form 1023-series application.

You must name a board and adopt your bylaws. You must name people to your board and adopt the bylaws of your non-profit. Bylaws explain exactly how your non-profit operates. You must keep minutes during this board meeting (and all other board meetings). Your best bet is to hire an attorney who specializes in non-profits to take care of all these tedious requirements.

As you see, the process for forming a non-profit can be time consuming. If your documents aren’t properly filled out, you could lose your tax-exempt status. If you’d like help with forming your non-profit, consider the attorneys on LawTrades. We are a legal marketplace that makes it easy and efficient for entrepreneurs to hire and work with vetted lawyers for transparent, flat-fees! Hope this helps.

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