How to set up a non-profit organization

Written by liisa sullivan
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While setting up a non-profit organisation is not difficult, it is important that you do it correctly from the start. Many people will try to save money by incorporating on their own, but this is not recommended. Here are some tips that will guide you through the process and help you to understand the basic steps involved.

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  1. 1

    Define the mission of the non-profit. There are many types of non-profits out there. They range from charitable and church organisations to professional and homeowners' associations. Come up with a mission statement.

  2. 2

    Choose a name that best identifies your non-profit group. You may want to come up with a few names just in case your first choice is taken. To confirm your name, you can simply go online to your Secretary of State's office and visit their Division of Corporations' section. You can do a name search there.

  3. 3

    Once you have a name, it's a good idea to contact a local attorney to help guide you through the incorporation process. Depending on the state, fees typically range from £325 to £455. An attorney will create and file the Articles of Incorporation with your state and will assist in creating bylaws for your non-profit organisation.

  4. 4

    Define the board members. The average board will require a President, Vice President, Secretary and Treasurer. You will need to define the specific roles of each board member. You will also need to start taking minutes of your meetings. This responsibility usually falls to the secretary. Meeting minutes pertain to the topics and decisions made. They can be done in bullet format, or simply short notes. You will need to do this for the first and subsequent board meetings; make sure to keep these on file.

  5. 5

    Research tax practices for non profits. This duty can fall to the Treasurer. Typically, the IRS requires two forms: a 1023 (Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code) and a 1024 (Application for Recognition of Exemption Under Section 501(a). The forms will guide you through the process and are mandatory in order for your organisation to be tax-exempt.

  6. 6

    Apply for an Employer Identification Number (EIN.) This can be done through the IRS online or over the phone. This process is simple and does not take long at all.

  7. 7

    Open a bank account under the name of your non-profit and are ready to begin operating your non-profit. You will be able to research and apply for grants, begin fundraising and start making an impact in your community. Develop partnerships with local businesses to spread the word about your group and you can begin developing a staff of volunteers to assist with your efforts.

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