How to Start a Nonprofit in Any State & Get 501(c)(3) Status
A very detailed, step-by-step nonprofit startup guide that shows you exactly how to form a nonprofit corporation in any U.S. state, apply for IRS 501(c)(3) tax-exempt status, understand Form 1023 vs. 1023-EZ, and avoid costly mistakes — with pro bono and low-cost support available.
Who This Nonprofit Startup Guide Is For
This long-form landing page is written for founders who are actively searching for how to start a nonprofit, how to get 501(c)(3) status, or step-by-step nonprofit startup checklist. If you are launching:
- A faith-based ministry, church, or outreach program.
- A youth mentoring, after-school, or education nonprofit.
- A community food pantry, housing initiative, or relief program.
- A national charity, online nonprofit, or advocacy-driven organization.
…this detailed guide will walk you through the legal formation steps, explain the IRS 501(c)(3) process, and show you where pro bono nonprofit help is available when you’re ready for hands-on support.
Step-by-Step: How to Start a Nonprofit in Any State & Obtain 501(c)(3)
Step 1: Clarify Your Mission, Vision & 501(c)(3) Eligibility
Every strong nonprofit begins with a clear mission statement and a specific community need. The IRS grants 501(c)(3) status only to organizations that are organized and operated exclusively for qualifying purposes such as:
- Charitable (relief of the poor, distressed, or underprivileged).
- Religious (churches, ministries, and faith-based outreach).
- Educational (schools, tutoring, literacy, training, mentoring).
- Scientific, literary, or test-for-public-safety purposes.
- Prevention of cruelty to children or animals.
Write a simple, IRS-friendly mission statement
A good mission statement answers three questions in one or two sentences:
- Who do you serve? (youth, families, seniors, veterans, survivors, etc.)
- What do you do? (provide food, education, counseling, housing, advocacy, etc.)
- Why does it matter? (what public benefit or impact do you create?)
This mission will appear in your Articles of Incorporation, bylaws, website copy, and Form 1023 / 1023-EZ narrative – making it central to your nonprofit startup.
Step 2: Choose Your State & Nonprofit Name (Brand & Legal)
You can technically start a nonprofit corporation in any state, but most organizations incorporate where they:
- Physically operate or hold events.
- Have the majority of their board members.
- Expect to conduct most fundraising or programs.
Nonprofit name checklist
- Search your state’s business name database to ensure the name is available.
- Avoid names that are misleading, confusingly similar, or restricted (e.g., “bank,” “insurance”).
- Check that a matching .org domain name or close variation is available.
- Think long-term: choose a name that works locally and nationally.
Step 3: Recruit a Strong, Independent Board of Directors
The board of directors is the legal governing body of your nonprofit. Most states and many funders expect:
- At least three directors (President/Chair, Secretary, Treasurer).
- A majority of the board to be independent (non-family).
- Regular board meetings with minutes, votes, and accountability.
What makes a strong startup board?
- Mix of skills: finance, legal awareness, program expertise, marketing/fundraising.
- People who actually care about the mission (not just names on paper).
- Clarity that no one “owns” the nonprofit – they steward it for the public good.
Step 4: Draft Bylaws & Conflict-of-Interest Policy
Your bylaws are the rulebook for how your nonprofit operates. When founders search “nonprofit bylaws template,” they are really looking for a document that:
- Defines board terms, officer roles, and how new directors are elected.
- Specifies how often meetings will be held and how many board members must attend (quorum).
- Explains how major decisions (like dissolving the nonprofit) are made.
Conflict-of-interest policy
The IRS wants to see a written Conflict-of-Interest Policy to prevent insiders from using the nonprofit for private gain. The policy should:
- Require board members to disclose any potential conflicts.
- Remove conflicted board members from voting on those matters.
- Document how the board determined that decisions are fair and reasonable.
Step 5: File Articles of Incorporation With Your State
To be legally recognized, you must file Articles of Incorporation (or similar document) with your state. This step creates your nonprofit corporation and is required before filing for 501(c)(3).
Key Articles of Incorporation elements for 501(c)(3)
- Exact nonprofit name and principal address.
- Statement of charitable, religious, educational, or other 501(c)(3) purpose.
- A proper dissolution clause directing assets to another 501(c)(3) or government entity.
- Registered agent and registered office in your state.
State filing fees vary widely by state, but many nonprofits pay between about $20 and $150+ to file Articles of Incorporation (paid directly to the state agency).
Step 6: Obtain Your EIN (Employer Identification Number)
An EIN (sometimes called a federal tax ID number) is required to:
- Open a bank account in the nonprofit’s name.
- File federal and state forms (including your 501(c)(3) application).
- Receive grants and corporate sponsorships.
The EIN is typically issued by the IRS at no direct cost once you submit a proper application. You must apply as the nonprofit corporation (not as an individual).
Step 7: Set Up Your Nonprofit Bank Account & Financial Systems
Once you have your Articles of Incorporation and EIN, open a dedicated nonprofit checking account. Never mix nonprofit funds with personal money.
Basic internal controls for small nonprofits
- Two signatures or approvals for larger disbursements.
- Written budget and simple chart of accounts (categories of income/expense).
- Monthly review of bank statements and reconciliation.
- Receipt and thank-you letter for every donor (even small gifts).
Donors, grantmakers, and Google searchers are all looking for legitimate nonprofits that manage money properly. Clean records support your credibility and your 501(c)(3) status.
Step 8: Apply for IRS 501(c)(3) Status – Form 1023 vs. 1023-EZ
After you are incorporated and have your EIN, you submit an application to the IRS requesting recognition as a 501(c)(3) tax-exempt organization. You must choose between:
- Form 1023-EZ – Streamlined online application for smaller, simple nonprofits.
- Form 1023 (long form) – Full, detailed application for larger or more complex organizations.
The form you choose affects your workload, timeline, and fees. See the detailed comparison below.
Step 9: Complete State-Level Registrations & Charitable Solicitation
In addition to federal 501(c)(3) status, many states require extra registrations before you can legally fundraise or operate. These may include:
- Charitable solicitation registration with the Attorney General or charity bureau.
- State income tax exemption applications for nonprofits.
- Sales tax or property tax exemption in some jurisdictions.
- Annual reports to keep your nonprofit corporation in good standing.
Every state is different, but ignoring these requirements can lead to penalties or restrictions on fundraising.
Step 10: Launch Your Programs, Fundraising & Annual Compliance
With your legal foundation in place, you can begin:
- Running programs that align directly with your charitable mission.
- Building a professional nonprofit website and online giving page.
- Creating consistent messaging for newsletters, social media, and grant proposals.
- Tracking activities, outcomes, and stories for future fundraising and reporting.
Remember your annual filings
To keep your 501(c)(3) status, you must file an IRS Form 990-N, 990-EZ, or 990 every year, along with any required state annual reports and charitable renewals. Missing three consecutive years of IRS filings can result in automatic revocation, forcing you to re-apply for exemption.
Form 1023 vs. 1023-EZ (With Fees & Practical Guidance)
One of the most common nonprofit startup questions is: “Should I file Form 1023 or Form 1023-EZ?” The answer depends on your projected revenue, assets, activities, and the IRS eligibility rules.
| Feature | Form 1023-EZ Streamlined | Form 1023 (Long Form) Standard |
|---|---|---|
| Typical Use | Small, simple nonprofits with projected modest budgets. | Larger or more complex nonprofits, or those not eligible for 1023-EZ. |
| IRS User Fee (filing fee) | $275, paid through Pay.gov at the time of filing. | $600 for most applicants, paid through Pay.gov. |
| Gross Receipts Threshold | Projected ≤ $50,000 per year for the first 3 years. | No specific threshold; used by organizations expecting higher revenue. |
| Total Assets | Must be ≤ $250,000 at the time of filing. | Often used when assets are higher or structure is more complex. |
| Length & Complexity | Short online form; you attest to eligibility and understanding of 501(c)(3) rules. | Detailed narrative of activities, financials, governance, and supporting documents. |
| Common Ineligible Organizations | Hospitals, schools, credit counseling, donor-advised funds, supporting organizations, certain churches, and other categories listed in IRS instructions cannot use 1023-EZ. | Required for ineligible entities, group exemption changes, or complex structures. |
| Perception by Funders | Widely accepted, but some major funders may prefer fuller documentation. | Provides a richer record for foundations, banks, and sophisticated donors. |
| When 1023-EZ May Be Best | When you are small, simple, clearly eligible, and want the fastest, lowest-cost 501(c)(3) approval. | When you expect significant growth, national programs, or complex funding streams (grants, sponsorships, restricted funds). |
Practical Recommendation
If you are a small grassroots nonprofit with simple activities and you clearly meet all 1023-EZ eligibility criteria, the streamlined form may be the most efficient path. If you plan to grow, expect complex funding, or simply want the most comprehensive record for future funders, the full Form 1023 may be worth the extra effort.
Typical Costs & Timeline to Start a Nonprofit & Get 501(c)(3)
Founders often search “how much does it cost to start a nonprofit 501(c)(3)?” The real answer depends on your state and your choices, but here is a practical overview:
| Item | Typical Amount | Who You Pay | Notes |
|---|---|---|---|
| State Articles of Incorporation Filing Fee | ≈ $20 – $150+ (varies by state) | State agency (Secretary of State, etc.) | Required to legally form your nonprofit corporation. |
| IRS Form 1023-EZ Filing Fee | $275 | IRS via Pay.gov | Streamlined 501(c)(3) application for eligible small nonprofits. |
| IRS Form 1023 Filing Fee | $600 | IRS via Pay.gov | Standard, full 501(c)(3) application (long form). |
| State Charitable Registration Fees | ≈ $0 – $250+ per year | State charity regulator (if required) | Needed in many states before fundraising from the public. |
| Professional Formation Support (Optional) | Varies by provider | Consultant, firm, or nonprofit specialist | May include incorporation, bylaws, 1023/1023-EZ prep, and compliance consulting. |
Typical Timeline (Approximate)
- 1–4 weeks: Plan mission, recruit board, draft bylaws and Articles of Incorporation.
- 1–4+ weeks: State processes and approves your Articles of Incorporation.
- 1–3 weeks: Obtain EIN and finalize 501(c)(3) application package.
- 1–6+ months: IRS reviews your Form 1023 or 1023-EZ and issues your determination letter.
Timelines are not guaranteed, but submitting a complete, accurate, and organized application greatly improves your chances of a smooth approval.
Frequently Asked Questions About Starting a Nonprofit & Getting 501(c)(3)
The first step is to clarify your mission, purpose, and public benefit. Write down who you serve, what you do, and why it matters. Then, identify at least two other people who can serve on your board of directors, choose your home state, and confirm that your mission fits within IRS 501(c)(3) categories (charitable, religious, educational, etc.).
No. The IRS does not require you to use a lawyer. Many founders start a nonprofit using government forms, educational guides, and nonprofit specialists instead of attorneys. However, professional help can reduce errors and save time, especially for complex organizations or Form 1023 (long form) filings.
Processing times vary by case load and complexity. Many streamlined Form 1023-EZ applications are approved within a few weeks, while full Form 1023 applications often take several months. Submitting complete documents and answering any IRS follow-up questions quickly will help your timeline.
In many cases, yes — once your nonprofit corporation is legally formed, you can begin raising funds, as long as you follow state charitable solicitation laws. You must be honest with donors that your 501(c)(3) status is “pending.” When the IRS approves your application, recognition is generally retroactive back to your formation date, which allows many donors to claim tax deductions for earlier gifts.
Not inherently. Form 1023-EZ is a legitimate, IRS-approved pathway, designed for smaller organizations that qualify for the streamlined process. The main difference is that the long form includes more narrative and financial detail. Some funders and banks appreciate the extra documentation, but many are comfortable with organizations that received 501(c)(3) status through 1023-EZ.
There is no official minimum, but you should have enough to cover:
- State Articles of Incorporation filing fees.
- IRS fees for Form 1023-EZ or Form 1023.
- Basic startup costs (website, bank account, initial program expenses).
Many grassroots organizations start with a few hundred to a few thousand dollars from founders, family, and early supporters, and then grow over time as they build trust and visibility.
You can receive donations as soon as your nonprofit corporation exists, but donors may not be able to claim a tax deduction until the IRS grants 501(c)(3) status. Many foundations, companies, and large donors require an IRS determination letter before giving. That is why many founders search “how to get 501(c)(3) status fast” — donors often wait for that approval.
Every year, most 501(c)(3) organizations must file:
- An IRS Form 990-N, 990-EZ, or 990 (depending on revenue).
- State corporate annual report to keep the nonprofit in good standing.
- State charitable registration renewal, if applicable.
Missing three consecutive years of IRS 990 filings can cause automatic revocation of your tax-exempt status.
Yes, the founder and staff can receive reasonable compensation for actual work performed. The board should approve salaries using data and comparables, document the decision, and avoid excessive pay. The nonprofit cannot be run primarily for private benefit, and compensation must reflect fair market value for the work being done.
Many nonprofits, especially small and early-stage organizations, operate from home offices and online. The key is that your activities genuinely serve the public and that you comply with state and local rules for fundraising, registrations, and home-based business restrictions (if any). You may also need to register to solicit in multiple states if you fundraise across state lines.
If your application is delayed, the IRS may send a request for additional information. You should answer thoroughly and on time. If denied, you may have appeal options or the ability to re-apply with corrected documents. Working with an experienced nonprofit specialist can be very helpful at this stage.
If you are testing a new idea or running a short-term project, a fiscal sponsor (an existing 501(c)(3) that accepts funds and grants on your behalf) can be a faster path to funding. If you want long-term control over your brand, governance, and direction, forming your own nonprofit may be better. Some founders start under a fiscal sponsor and later form an independent 501(c)(3).
In most cases, the recommended path is to create a new nonprofit corporation that qualifies for 501(c)(3) status. Some states allow conversion or merging of an LLC into a nonprofit, but this can be complex. It is often simpler to start fresh with a nonprofit corporation and transfer appropriate assets and operations into that entity with proper documentation.
You still choose one state as your home state of incorporation. If you operate or fundraise in other states, you may need to register there as a foreign nonprofit and comply with each state’s charitable solicitation rules. If you work internationally, you must follow U.S. laws on grants, reporting, and activities overseas, and you may face additional banking and compliance steps.
There is no one-size-fits-all budget, but a simple first-year budget might include:
- Incorporation and IRS filing fees.
- Website, branding, and basic outreach costs.
- Program supplies, space rental, or online tools.
- Insurance (general liability, directors and officers, if needed).
The IRS will expect your budget and activities to match your stated mission and public-benefit goals.
Certain churches and integrated auxiliaries are treated as tax-exempt under section 501(c)(3) even if they never file Form 1023. However, many ministries still choose to file a 1023 or 1023-EZ to receive a formal IRS determination letter. This letter can make banking, grants, and fundraising easier because it gives donors written proof that contributions are tax-deductible.
The IRS wants a clear, honest, and reasonably detailed picture of what you do and how you do it. Avoid vague phrases like “we help people” and instead explain:
- Who you serve (demographics and location).
- What you provide (food boxes, classes, counseling, events, etc.).
- How often the activities occur and where.
- How you will measure impact (numbers served, outcomes, stories).
A strong narrative reduces follow-up questions and supports a smooth 501(c)(3) approval.
Many founders begin operating or fundraising informally before filing. When you apply, you must accurately describe your past, present, and planned activities and provide financials for any prior years. If approved, the IRS generally grants recognition retroactively to a date that covers qualifying activities, but you must still report all income and expenses properly.
Yes, but any changes must still fall within 501(c)(3) charitable purposes. Significant shifts in your mission, programs, or structure may require updates to your Articles of Incorporation, bylaws, and possibly notifications to the IRS or state agencies. When in doubt, document the changes and seek professional guidance.
Some law school clinics, bar associations, and nonprofit technical assistance centers offer limited free help, but availability can be limited. If you are looking specifically for pro bono nonprofit help now with 501(c)(3) applications, bylaws, and compliance, you can connect with nonprofit specialists who focus on grassroots organizations and ministries.
Use the button below to learn about membership-based support that includes hands-on guidance through formation, 501(c)(3) applications, and ongoing compliance.
In many cases, yes. If you made a mistake in your state filings or IRS forms, you may be able to correct them through amendments, explanatory letters, or updated filings. The key is to address issues early, before they become larger compliance problems. Getting expert assistance can help you correct errors in a way that satisfies regulators and protects your 501(c)(3) status.
Ready to Turn Your Vision Into a Real 501(c)(3) Nonprofit?
Starting a nonprofit in any state and obtaining 501(c)(3) status does not have to be confusing or overwhelming. You now have a detailed nonprofit startup checklist, a clear comparison of Form 1023 vs. 1023-EZ, and a realistic view of costs and timelines.
If you would like hands-on guidance — including help drafting Articles of Incorporation, bylaws, and your 501(c)(3) application — you can request pro bono or low-cost support today.