ExpressTaxExempt Blog

How to Start a Nonprofit: The Road to 501(C)(3)

It’s human nature to want to help your fellow man. And maybe you’ve been fostering an idea of how you can help, but don’t know what to do. There are a few ways to approach this. One way is to jump right in and do it, without much of a plan. Your other option is to treat the whole process like you’re starting a business.

So take your idea for a nonprofit or tax exempt organization, and ask yourself—what are my next steps? What is my plan?

Ask Yourself, Is This Necessary?

Your first step is to explore the necessity for your nonprofit. Is this organization idea unique enough to have legs? Are there existing organizations that already cover this need? Do people really need this charitable service? How are needs being overlooked? Would this be better as a business instead of a nonprofit? Once you’ve covered your bases, you can move forward.

Next, you want to create the logistics of your nonprofit. This includes a mission statement, a business plan, and your governing board. These will help you communicate your organization's mission, plan the details of this venture, and create the basic roles within your team. Structuring your organization will give your nonprofit credibility, limit liability, and create organized documentation and policies which will make your IRS filing easier.

Apply for Nonprofit Status With Form 1023

Next, you need to file Form 1023 to get 501(c)(3) nonprofit status.

There are a few key requirements for an organization to be exempt from federal income tax under section 501(c)(3):

  • First, the nonprofit organization must be organized as a corporation, trust, or an unincorporated association, with its organization document defining the organization's purpose(s), and the organization must also permanently dedicate its assets to exempt purposes.
  • It must also be operated to further one or more of the exempt purposes stated in its organization document.

Organizations that are eligible to file Form 1023 for recognition of exemption under section 501(c)(3) of the Internal Revenue Code range from churches to schools and even hospitals.

After that, you simply need to keep organized, perform your charitable duties, and stay compliant!

Staying Compliant With Form 990

How do you stay compliant? Well, ExpressTaxExempt is the simplest solution for e-filing Form 990, Form 990-EZ, and Form 990-N (the e-Postcard). With our bulk uploading feature, multi-user accessibility, and the ability to share your return for review, we have the most bang for your nonprofit’s buck.

How do you e-file your Form 990? Watch this!

If you run into any problems e-filing your 990 series return, our friendly customer support team is ready to answer your questions! You can reach them by phone at 704.839.2321, or by live chat on our site.

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Find answers related to e-filing IRS Form 990, 990-EZ, 990-PF, 990-N (e-Postcard), Form 1120-POL and Extension Form 8868 with our Frequently Asked Questions.

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