Nonprofit Articles

The Costs Of Starting A Nonprofit In 2023

If you have been looking at creating your own nonprofit and have asked yourself about the costs, you’re likely to come to the conclusion that “it depends”. There are a lot of elements to consider for the cost of starting a nonprofit. Just on a basic level, each State has its own laws and associated fees. There are also laws at the federal level that you must follow. Luckily, the type of fees and services you’ll be spending your money on are typically the same in each State. What is different is the cost of various fees. Navigating the world of nonprofit organizations and the law isn’t always easy, so utilizing an experienced nonprofit consultant is always recommended. 5 Typical Fees For Starting Any Nonprofit Regardless of what State you are starting your nonprofit in, you will be paying fees. The types of fees are generally the same no matter where you're located, but [...]


7 Common Mistakes To Avoid When Forming A Nonprofit

Forming your own 501c3 nonprofit organization is a lot of work, and if not done correctly could cause you some big headaches or even legal issues. Just like with any project, you shouldn’t go at it alone. Even nonprofits need an internal team to help with all of the day-to-day operations and those that are external like consultants. If you’re looking to start your own nonprofit, keep reading to learn about seven common mistakes to avoid in the process. Understanding Nonprofit vs For-Profit A lot of newbies in the nonprofit world overlook just how strict the laws and regulations are to define nonprofit. Walking the fine line between nonprofit and for-profit can land you into some trouble. If you’ve already obtained your 501c3 tax exemption status, you could be at risk to lose it. For example, the amount of revenue a nonprofit receives can only exceed its expenses by so much. Downplaying The Legal Side [...]


What Are The Tax Benefits Of A 501c3?

There are plenty of advantages and disadvantages to receiving a 501c3 tax exempt status for your nonprofit. The idea of having a tax exemption is common knowledge, but there is so much more to it than simply stating that a nonprofit organization is “tax exempt”. 501c3 tax exempt organizations are heavily regulated to prevent abuse. Because of this, there are a lot of rules and guidelines that a nonprofit organization must follow in order to obtain and retain its tax exempt status. Knowing the ins and outs of these rules and laws can be quite the headache, especially if you aren’t an expert in tax law. That’s why many nonprofit organizations hire firms like Nonprofit Elite to ensure they understand and follow the ins and outs of tax law. Understanding The Definition Of A 501c3 Nonprofit First, you need to be familiar with the actual definition of a 501c3 nonprofit which will help you understand [...]


What Does Tax Exemption Mean?

When people think about, or hear about, a nonprofit, they often think of an entity that is tax exempt. Depending on the nonprofit, there are many who even view them as exploiting the tax system to avoid paying taxes. The good thing is that Internal Revenue Code Section 501(c)(3), commonly referred to as 501c3, actually has really strict guidelines for tax exemptions. But what, exactly, is tax exemption? If you think that a nonprofit is exempt from all taxes, you would actually be incorrect. While it’s a basic fundamental of learning about nonprofits and tax exemptions, understanding what these terms actually mean is one of the most vital pieces of knowledge to have. What Is A Nonprofit? Let’s start with the word “nonprofit”. According to the Merriam-Webster dictionary, a nonprofit is defined as an entity that is “not conducted or maintained for the purpose of making a profit”. In essence, this is the opposite of opening your own [...]


What Do I Need to File for 501c3 Status

Are you looking to apply for tax exemption status from the Internal Revenue Service? Then you’re going to need to know which forms need to be filled out and how to prepare for the federal filing requirements for nonprofits. In order to file for 501c3 status you need to establish your nonprofit corporation on both the Federal and State level. Here's the process and what you need when filing for 501(c)(3) status. What are are the exemption requirements for a 501c3 Organization While we’ve covered the steps to start a nonprofit, today we’re going to look more at the specific requirements from the IRS in establishing a nonprofit organization. The steps to establish your corporation as a nonprofit include: Choose Directors for your Nonprofit - In Texas, you must have at least 3 members on your board of directors. These directors may be a natural person of at least 18 years or older, a corporation, or [...]


Can You Start A Nonprofit With No Money?

Just like when starting a business, nonprofits also have starting costs in the startup phase. Of course, these costs will differ depending on what your nonprofit will be doing as some will require more than others to start. Unlike starting a business, however, you can actually start up your own nonprofit without your own funds. There are many ways to obtain funding to start your nonprofit, and yes, these methods are legal. Just remember you will still have rules to follow. Let’s go over some ways that you can raise funds for your nonprofit startup without having your own funds. How To Get Funding For A Nonprofit Luckily there are many ways to get funding for your nonprofit startup. The first of these is one of the more obvious: a loan. However, this is probably going to be the least desirable and even the most difficult method. A 501c3 nonprofit organization can obtain what is called a [...]


What Can A 501c3 Organization NOT Do?

A nonprofit, 501c3 organization can do a lot of good for a lot of people. They are incredible ways to give back to your community or those that are less fortunate. A 501c3 also comes with a lot of benefits when it comes to tax exemptions. However, like all things, even 501c3 have limitations on what all they can do. In fact, breaking the rules that govern 501c3 organizations can even have your status revoked. While it’s important to know what you can do with any type of 501c3 organization, it’s also very important to know what you can’t do as well to remain in compliance. This is why Nonprofit Elite of Keller, Texas provides more than just applying for your 501c3 status. We also specialize in consulting and compliance for your organization so you never have to worry about making a mistake that could jeopardize your organization. 501c3 Nonprofits Can’t Support Political Campaigns Many [...]


What Are The 3 Types of 501c3 Nonprofits?

Starting and maintaining a successful nonprofit organization is not an easy task. There are many steps needed to ensure legitimate 501c3 status with the IRS. The accomplishment of starting your own organization, though, is a fantastic feeling. If you’re in the beginning phases of your nonprofit startup, you probably have several questions including, “What type of nonprofit am I?” A “nonprofit organization” is a broad and very generalized term for an organization that does not distribute profits to individuals or shareholders, but instead reinvests funds to accomplish its mission. Nonprofits also work to advance a mission that promotes or provides for the common good. While there are technically eight separate categories of nonprofit organizations, there are three main categories set forth by the IRS: Public Charities Private Foundations Private Operating Foundations While all three are considered nonprofit organizations and will often obtain the same 501c3 tax exempt status, each of these categories is distinctive. [...]


Steps to Start a Nonprofit

Starting a nonprofit can feel like you're facing a daunting amount of paperwork and filing processes with the IRS. But, what are the steps to start a nonprofit organization? I’m glad you asked! While you can certainly talk to well-meaning advisors who tell you the steps are similar to starting a for-profit corporation, I respectfully disagree. Nonprofit organizations are different than for-profits – different rules, different, roles, and different reasons. Explaining these differences and walking you through these steps is our day-to-day work at Nonprofit Elite – 800-268-4388, and we are eager to help! The following steps to start a nonprofit are based on two decades of experience working with more than fifteen hundred (1500!) nonprofit startup organizations. These include both public charities and private foundations and range from schools and churches to scholarship funds and micro-lending organizations. While the order in which you complete these steps will vary depending on your project, each step is important. [...]


Is Your IRS Form 990 Due May 15th? We Can Help!

Is Your IRS Form 990 Due May 15th? We Can Help!  Most nonprofit organizations are required to file IRS Form 990 each year to stay compliant with the IRS (churches are an exception).  Form 990 is due five months and fifteen days after the end of your fiscal year. For those with a January-December accounting year, this means May 15 is your due date! Which Form 990 you file is determined by whether or not your organization is a Public Charity or Private Foundation and by your organization’s revenue during your previous year. Most small public charities (less than $50,000 per year in revenue) will file IRS Form 990-N. Larger organizations must file IRS Form 990EZ or IRS Form 990. Private Foundations are required to file IRS Form 990-PF. File IRS Form 990-N with Nonprofit Elite Nonprofit Elite can assist you with preparation of IRS Form 990-N only. Give us a call today: 800.268.4388. [...]