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A non profit can truly help make the world a better place.

Here’s how to get your non-profit corporation off the ground quickly and smoothly.

What Is a Non Profit Corporation?

A non profit corporation is an organization whose purpose is something other than making a profit. A non profit donates its revenue to achieve a specific goal that benefits the public, instead of distributing it to shareholders. There are 1.5 million non profit organizations registered in the US.

Being a non profit does not mean the organization won’t make a profit. non profits can make money but all of it must go back into the organization by paying employee salaries, etc.

No one person or group owns a non profit. Assets from a non profit can be sold, but it benefits the whole organization not individuals.

Who Is It Right For?

non profits are agents of change in the world today. non profits are established for a specific noncommercial purpose, usually religious, educational or charitable.


Common non profits:

  • Schools/Universities
  • Hospitals
  • Museums
  • Churches
  • Food Banks
  • Homeless Shelters

People who start non profits are driven by passion about a certain cause. Whatever your cause, creating a non profit can make a difference.

How to Start a Non Profit


  • Pick a Name
    If you haven’t already, choose a business name for your non profit. Once you have decided upon a name and entered your information online, IncFile.com automatically performs a name search against the corporate database of the state of incorporation to check the availability.
  • File Paperwork
    In order to form a non profit, you will have to file non profit Articles of Incorporation with the appropriate state agency and pay the necessary state filing fees. The paperwork and fees vary by state.
  • File for Tax Exemption
    non profits are not automatically tax exempt, the IRS must approve it first. In the United States, non profits can apply for tax exemption status by filing a 501c3 with the IRS. The application fee is around $500, but prices vary from state-to -state.
  • Create Bylaws & Acquire Licenses
    Bylaws describe your non profits’ purpose and layout your operating rules.
    Bylaws should include:
    • How directors are elected and what authority they have.
    • How, when, and where directors’ meetings are held.
    • How decisions can be reached with or without a meeting.
    • The duties and responsibilities of officers and how long they serve.
    • Officers, constituency rights and responsibilities, and standing committees.
    • The organizational structure of the non profit. You may need to acquire certain license for your non profit. Check with your state department of consumer affairs for more information.
  • Appoint Directors and Hold Your First Meeting
    Normally a corporation’s officers include, at a minimum, a president, treasurer, and secretary, or their functional equivalents. The initial board is the most important decision as you will vote with them to elect others later.
    Some things to go over in the first board meeting:
    • Elect any officers
    • Bylaws
    • Choose your headquarters
    • Corporate bank account.
    • Designating the accounting period.
    • Documenting the receipt of tax exemptions.

After the meeting is completed, minutes of the meeting should be created and filed in your corporate records book. You should hold board meetings annually.

FAQ

Q: What are the advantages of becoming a non profit?

A: Tax exemption is a major advantage of becoming a non profit. Once an organization is tax-exempt, any charitable donations made by individuals are tax-deductible.

Another advantage is legal protection, as the founders and members are generally not held personally responsible for a non profit’s debts.


Q: What are the disadvantages of becoming a non profit?

A: non profits cost money and time to start. Luckily, IncFile takes away the hassle by helping you file. Once a non profit is started, you must keep excellent records and make sure to file all paperwork yearly. Since non profits are there to serve the public, they are under public scrutiny.


Q: How do I create a budget for my non profit?

A: Creating an operational budget for your non profit is essential. The board of directors will establish a budget period and set organizational goals for that period. Make sure you estimate your expenses and anticipated revenue.


Q: Do I need to have a mission statement for my non profit?

A: It is a good idea to have a mission statement that clearly defines your non profits’ goal. See some great examples of effective mission statements.


Q: What is an Advisory Group and do I need one for my non profit?

A: An advisory groups is a group of individuals outside of the board who bring a skill set to help advise a non profit. They don’t have actual authority, but they can make recommendations to the board of directors. Sometimes they are made up of retired board members who have worked in similar fields to your non profit. It may be a good idea to establish an advisory group if there are major disagreements or complex issues for the board to handle.

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