Starting a 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 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 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. [...]


A Nonprofit Fighting Sex Trafficking in Texas

In 2014, Angie Goeke and Alicia Maroney attended a presentation about the prevalence of child sex trafficking in their city of Katy, Texas, and decided to take action. After careful planning and research, they contacted Nonprofit Elite and formed a 501c3 organization called Not In Our City. Not In Our City (NIOC) works in the Houston area and utilizes a three-pronged approach to advance their mission: First, they inform their community about the frequency of child sex trafficking through public presentations and events aimed at revealing the secret world of trafficking. Second, NIOC invests in educational curriculum that exposes the dangers of sex trafficking to both students and teachers in Texas schools.  Third, NIOC is committed to helping the community defend itself through partnership programs with like-minded organizations and the promotion of legislative action to fight trafficking and protect children at any cost. In just a short time NIOC has already presented to 800+ youth across [...]


New $275 Form 1023-EZ User Fee (July 1, 2016)

Beginning July 1, 2016, the IRS has changed the User Fee for IRS Form 1023-EZ from $400 to $275 for all applicants.  This new fee applies only to those Form 1023-EZ applications prepared and submitted after July 1, 2016. In addition to lowering the application fee, we also expect the IRS to add several new safeguards to the Form 1023-EZ application process to continue discouraging non-qualified applications.  These new safeguards could include revisions to the actual Form 1023-EZ and increased follow-up correspondence with the IRS to verify appropriate formation documents and tax exempt provisions contained within those formation documents (Articles of Incorporation and Bylaws).  Overall, we expect the IRS to be more involved in checking in with applicants during the Form 1023-EZ review process.  To date, we have noticed more instances where the IRS requests copies of the applying organization's formation documents, narrative description of activities, and three years of projected financial budgets. If you are beginning the 501c3 application process yourself, or have questions about which form (and user [...]


IRS Form 1023-EZ Help and Services

Searching for IRS Form 1023-EZ help, cost or filing services?  Nonprofit Elite can help! We are excited to offer a more affordable and faster 501c3 application process to small and mid-size nonprofit organizations seeking to obtain tax exempt status from the IRS. The newly-released 501c3 application is called IRS Form 1023-EZ and is appropriate for most nonprofit organizations with projected annual receipts of $50,000 or less and total assets of $250,000 or less (excluding churches, schools, hospitals, medical research organizations, and a few other types).  The IRS User Fee for this new Form 1023-EZ is $400 for all applicants, and the IRS is promising a significantly faster review process and response rate than the traditional 6-12 months. If your new nonprofit organization is eligible to file this new IRS Form 1023-EZ then it is almost certainly in your best interest to do so.  Otherwise, filing the traditional IRS Form 1023 could cost you significantly more time and money - up to $1500 [...]


How to Start a Nonprofit Organization in Texas

[custom_frame_right shadow="on"]501c3 Approval in Texas[/custom_frame_right] There are five basic steps to starting a nonprofit organization in the state of Texas: 1.  File a Certificate of Formation with the Secretary of State that includes among other items your organization’s name, registered agent, registerd office, proper purpose and dissolution clauses, and the names and addresses of at least three board members, unless you choose to have members.