Set Up Your Nonprofit in 6 Easy Steps


Starting a nonprofit organization may sound like a daunting task, but if you make sure to fulfill several key activities, you will be running your own 501(c)(3) in no time. Pastor Resources shares what you need to do in order to set up your business and help those in need. 

1. Recruit incorporators for your nonprofit

The Articles of Incorporation need to be signed by incorporators in order for you to legally declare as a nonprofit organization. You need at least one, but more than one is possible — e.g., if you have a board of directors, they will most likely be your incorporators, as well. In addition, there may be requirements for how many directors you need to have on the board at one time.

2. Acquire funding

Getting the startup capital to start your nonprofit organization doesn’t have to be as difficult as it may sound. You can apply for grants by filling out forms online with grantmakers and solicit donations from wealthy individuals (often, donations to charitable organizations are tax-deductible).

3. Choose a business structure

When starting a nonprofit in SC, know that nonprofit organizations have a bit of a different set of options when it comes to choosing a business structure, but it’s the same concept as though you were forming a small business. Informal nonprofits, tax-exempt nonprofits (like charitable organizations), and nonprofit corporations — each have a different set of requirements for maintaining that particular structure, so make sure to do your research first before selecting which works best for your organization. 

4. Incorporate as a 501(c)(3)

In order to legitimately be recognized as a nonprofit organization, you will need to fill out IRS Form 1023: Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This form can be found on the Internal Revenue Service website and can be filed from there as well.

5. Draft your bylaws

Every nonprofit needs to have bylaws. This is a legal document that determines how the organization is run, even if no one reads them on a regular basis. These bylaws should deal with the organization’s highest level of governing issues; this includes things like purpose, board structure, officer position descriptions and responsibilities, and official meeting requirements, among others. However your bylaws are written, you need to make sure you are following them to the letter. You also should get help writing them from legal counsel specifically versed in nonprofit law.

6. Store and organize your records

You are able to retain your nonprofit status as long as you remember to file your returns on time. The IRS recommends that you keep your returns for at least three years after you file them. There are also specific financial records you need to maintain so that you can prove your status if necessary. Those documents include, but are not limited to, statements of financial position, statements of activities, and annual reports (as well as the bylaws you drafted in the previous step). You essentially need to prove that you are using your funding for its intended purpose.

Get started now

After learning about all of the things you need to do to declare your organization a nonprofit and retain that status, you’re probably ready to get started!

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