How to Start a Nonprofit

What makes a nonprofit different?

Although nonprofits might bring to mind organizations run by volunteers, the day-to-day operations of a nonprofit aren’t too different from other businesses. The key difference is in the financial structure and the primary mission of the organization.

Nonprofits are created to serve public or community interests, such as charitable, educational, religious, or cultural goals, rather than to generate profit for owners or shareholders. Any excess revenue is reinvested back into the organization’s mission instead of being paid out as dividends. While some nonprofits—like churches and charities—are easily recognized, others include homeowners’ associations (HOAs), sports leagues, and professional associations.

Nonprofits often benefit from tax-exempt status, meaning they don’t pay federal income tax on donations and income tied to their core mission. This combination of a social mission and the reinvestment of funds into furthering that mission sets nonprofits apart.

How do nonprofits make money?

The term “nonprofit” can be a bit misleading—after all, an organization still needs to generate income to operate. The main distinction is that any profits a nonprofit makes aren’t distributed to individuals as income, beyond employee salaries. Instead, surplus funds are reinvested into advancing the organization’s mission. This could mean upgrading facilities, hosting fundraising events, or buying new resources like books or equipment. The goal is to ensure that every dollar is used to support the cause rather than personal financial gain.

How to register a nonprofit

While the requirements for forming a nonprofit vary by state, you can generally get your new organization up and running by following these steps:

Name your nonprofit

We have a more in-depth guide on choosing your business’s name, but the central thing to focus on is that it is a unique, distinguishable name that can grow with your business. Every state has its own online database that you can search to find out if your potential business name is already registered by another business in your state.

There are only a few things to keep in mind when naming your nonprofit. Most states what it clear that you’re a nonprofit, so words like “Association” or “Foundation” are often required. And be careful with misleading terms like “Bank” or “Federal,” since states generally don’t approve of names that imply a purpose outside the nonprofit realm. A quick look at your Secretary of State’s site for nonprofit guidelines can let you know if your name passes muster.

Choose a registered agent

A registered agent is someone you have authorized to receive legal notices for your company. When you are forming your business, your Secretary of State will require you to appoint a registered agent with the formation paperwork. This person or business will need to be available at the local address listed on your formation paperwork during regular business hours.

When you hire Epik as your nonprofit’s registered agent, you’re getting all the benefits of our partnership with Registered Agents, Inc. That means top-tier protection and privacy, plus a free trial of an Epik domain name for a year and 90 days of web hosting. It’s everything you need to get your nonprofit off the ground and start making a real impact right away! By letting us handle what we’re best at, you can focus on what you’re best at—running your organization.

File your articles of organization

Filing your formation paperwork makes your nonprofit official. You’ll need to submit your Articles of Incorporation with the state, in addition to paying a state-specific filing fee. This fee is pretty variable across states, ranging from $8 in Kentucky to over $170 dollars in Maryland. While the information required by each state can be different, you’ll almost always need at least your organization’s name, your registered agent’s information, a business address, your statement of purpose, and an incorporator signature.

Outline your nonprofit bylaws

Once your nonprofit is registered with the state, it’s a good idea to speak with all of the organizers to set out and adopt your nonprofit bylaws. These bylaws will specify how your nonprofit functions day-to-day, including director and officer duties. You’ll need these bylaws before opening your organization’s bank account and applying for 501(c)(3) tax-exemption status with the IRS.

There are templates online that you can use, but there isn’t any required format that you have to follow for your bylaws. You’ll keep these on hand for any disagreements or legal disputes that might arise in the future, and third parties (including your bank or the IRS) can request to review your bylaws when needed.

Get an EIN from the IRS

Every company needs an EIN, or employer identification number, from the IRS. This essentially functions as a social security number for your company, and you’ll needed it for tax and payroll purposes. Registering for an EIN can be done through the IRS’s website, or Epik can request this for you when you hire us to form your nonprofit.

Apply for your 501(C)(3) tax-exempt status

Nonprofits usually, but not always, apply for 501(c)(3) status with the IRS. To do this, you’ll need to submit an Application for Recognition of Exemption and pay an application fee. This application will ask you to list your organization’s goals and financial details.

Apply for state-level tax exemptions

Your nonprofit organization will be able to apply for state tax exemptions, but, again, this will vary from state to state. You’ll need to submit an application to your state’s Department of Revenue (and any states where you’ll be doing business). Some of the most common state tax exemptions include:

• Sales tax exemption
• Property tax exemption
• Income tax exemption
• Employment tax exemption

Apply for the proper licenses and permits

This will vary greatly depending on the scope of your organization. For example, if you’re planning to serve food, you might need a food handler’s license. If you’re fundraising, some states may require a charitable solicitation permit. Find out what licenses and permits you’ll be required to have for each state you’re operating in. Unfortunately, there isn’t usually one comprehensive list, so a little research is required on your part. We recommend checking with your state’s relevant departments and your Secretary of State to uncover any specific requirements.

Register your nonprofit as a charity

Registering as a charity is crucial if your organization will be asking for donations from the public, and it can usually be done with your state’s Attorney General’s office. When you register as a charity you’ll have to pay a registration fee, fill out an application, and provide documentation of your tax-exempt status.

Set reminders for annual reports

Each state will require some sort of annual, biennial, or periodic report to be filed in order to update your organization’s information. When you hire a commercial registered agent service, they will often send you reminders about these reports and can even automatically file them for you for every state you’re operating in. With Epik you can stay on top of your filings without lifting a finger when you choose our registered agent and formation services as an add-on at checkout.

Benefits of nonprofits

A nonprofit is a type of corporation that focuses on serving a mission rather than generating profits for owners or shareholders. Anyone can start a nonprofit, provided they follow certain legal and organizational guidelines. And the good news is that nonprofits can access unique tax benefits, grants, and donations to help achieve their mission.

Privacy

Forming a nonprofit helps you maintain clear boundaries between the organization and your personal life. You can also use a registered agent, allowing you to keep your home address private and off public records.

Liability protection

A nonprofit provides liability protection, safeguarding your personal assets from any legal actions or debts incurred by the organization. This ensures that if your nonprofit faces challenges, your personal finances remain secure.

Credibility

Establishing a nonprofit signals professionalism and dedication to your cause. It demonstrates to donors, volunteers, and partners that you’re serious about making a difference and have taken steps to operate within a formal legal structure.

Pass-through taxation

Nonprofits enjoy tax-exempt status, freeing them from federal income taxes. This allows more of your funds to go directly toward supporting your mission and expanding your impact.

Why you should hire us

Nonprofit guidance

Navigating the process of forming a nonprofit can be overwhelming, but you don’t have to do it alone. We provide expert support to help you set up your organization properly, safeguard your personal assets, and steer clear of common legal pitfalls so you can focus on your mission. You can call us day or night at (737) 301-5923.

Local expertise

Our team works with nonprofits across all 50 states and knows the ins and outs of state-specific requirements. Whether it’s understanding the forms or ensuring compliance, we guide you through the process and keep your organization in good standing year after year.

Privacy

When you hire us to form your nonprofit, your personal address stays off public records. We list our address on government filings, ensuring that your personal information stays protected while we manage your filing needs.

Peace of mind

Tracking annual deadlines and staying on top of evolving regulations can be a hassle. We handle these details (like submitting your annual report on time) for you so that you can concentrate on doing the important work of your nonprofit, knowing everything is compliant and up to date.

How our services work

Our nonprofit formation services can be added at any time alongside our registered agent services. The process is simple:

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