www.nonprofit.ist - Nonprofit.ist

How to Start a Nonprofit: Quick Simple Guide

How to Start a Nonprofit: Quick Simple Guide

Congratulations! You’ve decided to start a nonprofit! Whether you’re passionate about environmental issues, education, or another cause close to your heart, there are many important details to consider as you get started. In this guide, we will cover everything you need to know about starting a nonprofit, from initial planning to obtaining the 501(c)(3) tax-exempt status from the IRS. By the end of this guide, you will have a clear understanding of how to start a nonprofit that is both fulfilling and successful.

Before we dive in, it’s important to understand that there are different types of nonprofits. The most common type is the 501(c)(3), which is a charitable organization. Other types of nonprofits include lobbying organizations (501(c)(4), trade associations (501(c)(6) among others all listed here: Exempt Organization Types | Internal Revenue Service. For the purposes of this guide, we will focus on how to start a 501(c)(3) nonprofit.

A final note before you get started, be warned if you want to get rich quick, this is probably the wrong path for you. While nonprofit employees and founders are paid, they get no equity or shares in the entity in the event of a sale or profit. We understand if you want to stop reading and do something else instead.

Ok, seems like you are our people, let’s get started!

Reminder: Nonprofit.ist has trusted nonprofit consultants that can help you with every step along the way.

Step 1: Perform a feasibility study

The first step in starting any business is performing a feasibility study—and starting a nonprofit is no different. This will help you determine if there is a need for your nonprofit and if it stands a chance of being successful. To perform a feasibility study for your nonprofit, you should:

Research the needs of your target community: What are the most pressing issues? What solutions already exist? How can your nonprofit make a difference?


Research your competition: What other nonprofits are addressing the same or similar issues? What makes your nonprofit unique? How can you make sure that your nonprofit stands out from the competition? 

Assess your financial resources: Do you have enough money to get started and sustain operations for at least one year? How much money do you realistically think you can raise? Where will this money come from—grants, donations, fundraising events, etc.?

Step 2: Pick a catchy name and write a mission statement

Now that you’ve done your feasibility study, it’s time to start thinking about what your nonprofit will be called. This may seem like a small detail, but it’s actually quite important—you want to choose a name that is both memorable and reflective of your mission. Once you’ve settled on a name, you should also write a mission statement. This is a brief description of your nonprofit’s purpose, goals, and values. 

Your mission statement should be clear, concise, and easy to understand. It should also be inspirational and make people want to get involved with your nonprofit. Here are some examples of effective mission statements:


The Humane Society of the United States: “Our mission is to celebrate and protect the human-animal bond.” 

Make-A-Wish Foundation: “We grant the wishes of children with life-threatening medical conditions to enrich the human experience with hope, strength and joy.” 

 Autism Speaks: “Our mission is to change the future for all who struggle with autism spectrum disorders.” 

  These examples are all different, but they have one thing in common—they are clear, concise, and easy to understand. They also make you feel something, which is essential if you want people to be passionate about your nonprofit. Learn the four elements of a good mission statement.

Step 3: Form a board of directors

One of the most important steps in starting a nonprofit is forming a board of directors. This group will provide guidance and support for your organization as it gets off the ground. The board of directors should consist of individuals who are passionate about your cause and who have the skills and resources necessary to help your nonprofit succeed. Ideally, your board should consist of individuals from different backgrounds (e., business, law, education) who can offer unique perspectives on how to achieve your nonprofit’s goals. 

It’s also important to have a mix of individuals who are familiar with your nonprofit’s cause and those who are not. This will help ensure that your board is making decisions that are in line with your mission and that are based on what’s best for the organization, rather than personal interests. Talk to an expert in nonprofit board member development.

Step 4: Incorporate your nonprofit

The next step in starting a nonprofit is incorporating it. This will make your organization official and protect you and your board members from liability. To incorporate your nonprofit, you will need to file Articles of Incorporation with your state government. This document will include information such as your nonprofit’s name, mission, and board of directors. 

Once you have filed your Articles of Incorporation, you will need to obtain an Employer Identification Number (EIN) from the IRS. This is a nine-digit number that is used to identify your organization for tax purposes. You can apply for an EIN online, by fax, or by mail. Don’t worry if you get this step wrong and want to change your legal nonprofit name later.

Step 5: Obtain 501(c)(3) tax-exempt status

The final step in starting a nonprofit is obtaining 501(c)(3) tax-exempt status from the IRS. This designation will allow donors to deduct their contributions from their taxes and exempt your organization from paying federal taxes on income from charitable activities. 

To apply for 501(c)(3) status, you will need to file Form 1023 (Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code). This form is quite lengthy—it consists of 29 pages of instructions and seven different Schedule attachments—so it’s important to give yourself plenty of time to complete it correctly. Once you have filed Form 1023, the IRS will review your application and make a determination within 90 days. 

Find some legal support for this step: Experts Specializing in Legal services.

There you have it! These are the steps you need to take to start a nonprofit. Remember, starting a nonprofit is a big undertaking, but it can be incredibly rewarding. With careful planning and execution, you can make a difference in your community—and the world.