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.

The Costs Of Starting A Nonprofit In 2022

5 Typical Fees For Starting Any Nonprofit

Regardless of what State you are starting your nonprofit in, you will be paying fees. The type of fees are generally the same, but the costs will vary from State to State. In Texas, you can find a list of fees on the website for the Texas Secretary of State. You can expect these 5 fee costs when starting your nonprofit:

    1. Articles of Incorporation – also commonly referred to as a Certificate of Formation (this form of the term is most commonly used by the Texas government), this document is absolutely crucial when starting a nonprofit and obtaining a 501c3 tax exemption status. In Texas, the cost of the State fee to file your Articles of Incorporation is $25. Remember, however, that this document requires very specific language used to qualify for and obtain a 501c3 tax exemption status.
    2. Charity Registration – some States require that a nonprofit organization file for charitable registration. This basically states that the nonprofit is “licensed” to obtain charitable funds using methods like fundraising, charitable donations, etc. Texas does not require a nonprofit organization to register as such. If your nonprofit isn’t going to be limited to Texas, however, you will need to make sure you research the State laws that you will be registered in.
    3. Business, License, and Permit Registrations – these costs will vary, even in Texas, depending on the type of nonprofit you have. One example here is the cost to register your nonprofit’s name (after all, you can’t use a name that’s taken!). 
    4. Other Fee Costs – these are other fees that you may be looking at needing to pay. Generally, these fees are going to be anywhere from $50 to $200 depending on the needs of your nonprofit. Common fees include permits for various State tax exemptions, annual registration or forms, etc. Filing for tax exemption permits is completed through the Texas Comptroller of Public Accounts.
    5. 501c3 Tax Exemption Filing – while following certain steps to start your nonprofit, you will file one of three IRS forms to obtain your 501c3 tax exemption status: IRS Form 1023, IRS Form 1023-EZ, or IRS Form 2014. Make sure all of the information provided is correct, including the form that you use, or else you risk wasting both time and money. Plus, you’ll be missing out on the tax benefits of a 501c3.

Other Fees And Costs To Consider When Starting A Nonprofit

Sometimes lost in the excitement of starting your own nonprofit, there are some other basic costs you should consider. Especially if you are going to have a physical office location, obtaining the proper insurance is one cost to consider. If you are going to have an office location then you’ll need to look at the cost for leasing or building, as well as all of the necessary equipment needed to go inside of the office.

Just like a business, you’ll want to look at your nonprofit’s branding and image. While technically not necessary, branding is extremely vital for marketing your nonprofit. Creating a memorable, catchy logo will help bring more attention to your nonprofit. The cost for branding varies depending on the style and quality you want, and it can range from $200 to over $1,000.

It’s a good idea to obtain banking services that are separate from any personal accounts and finances that you have. You do not want your nonprofit’s finances to get mixed in with your own finances. Not only is this an accounting nightmare, but it could look bad to law enforcement authorities, too.

Keeping up with the costs of starting and maintaining your nonprofit, as well as keeping up with State laws and fee requirements, is not always easy. Even simple mistakes could cost you. Don’t stress about the fine details and utilize a nonprofit consultant service like Nonprofit Elite. We guarantee a successful filing with the IRS that we can back up with our 100% approval rate. You can expect nothing but elite service with getting assistance for your Articles of Incorporation, IRS forms, and even consulting and compliance. Reach out to us today to get started so you can focus on your nonprofit.