First 5 Steps to Start a Non-Profit Organization - Free Enterprise
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First 5 Steps to Start a Non-Profit Organization

If you're thinking about forming your own tax-exempt organization, you might be wondering what it takes. How does one start a non-profit organization?

First things first, before you can start a non-profit, it's important to recognize what qualifies as a non-profit in the first place. Non-profit organizations are generally those that are engaging in religious, charitable, scientific, educational or literary endeavor that will benefit society. Got that part down? Well, what's next?

Step #1 to Start a Non-Profit: Make a decision about incorporation.

Unincorporated and incorporated non-profit organizations have similar statuses, but non-profits that are unincorporated do not enjoy all of the benefits that a incorporated non-profit enjoys, such as limited liability protection. Non-profits that may be more at risk for liability should likely consider incorporating.

Step #2 to Start a Non-Profit: Pick out a name.

A non-profit is like a business. As a result, it needs some sort of moniker to describe the organization's goals and missions.

Step #3 to Start a Non-Profit: If you're going to incorporate, file the appropriate paperwork.

Like any corporation, a non-profit corporation will usually need to file paperwork with the state. Depending on the jurisdiction, you might also have to file articles of incorporation along with the standard form.

Step #4 to Start a Non-Profit: Apply for tax-exempt status with the federal and state government.

To get federal tax-exempt status, organizations need to file paperwork with the IRS, such as IRS Form 8718 and Package 1023. And, for some states, non-profit organizations need to file for tax-exempt status separately with the state.

Step #5 to Start a Non-Profit: Open a separate bank account for your organization.

Starting a non-profit organization may be complicated enough as it is, and it's really not necessary to complicate things further via an entangled bank account. Having a separate bank account for your organization can mean an easier time for all.

These tips on how to start a non-profit organization may not answer all questions out there, and the process to properly form a tax-exempt organization may end up with more complicated legal problems. And, it may also be necessary to consult an experienced business attorney who knows more about the process. After all, you need to make sure your non-profit is properly formed before you can go about saving the world.

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