You may have been thinking lately that even though it’s a new year, there really hasn’t been anything new about it. You’re still doing the same things as last year, or still catching up from last month because of the holidays.
There’s a popular meme spreading around social media now that states, “My New Year Officially Begins February 1st.” And while it’s meant to be funny, it can actually be a legit statement – just because they’re called “New Year’s Resolutions,” doesn’t mean they have to happen at the start of the year. You can change things for yourself at any time of year.
So let’s say this is the year you want to start your nonprofit, but you’re already falling a month behind. With everything it takes to build a nonprofit, you might as well try again next year, right? Wrong. After researching what’s needed for a nonprofit, you can basically break it down into three major goals.
Goal 1 – Get Started
You already have a vision of how and why your organization operates. You have friendly supporters and a small group of like-minded advisors providing direction similar to a board. Get with these people and write-up the mission statement for your nonprofit. It should detail the work your organization does and why it’s important, and encompass the basics of your board of directors like first principles, key duties, accountability, etc.
Your statement needs to be as complete as possible – not a task done very quickly. You could allow yourself from the first of January to the last day of April to finish. You may not need the entire four months, but you’ll still have ample time if you get started late.
Goal 2 – State Incorporation
Your organization will need to be created within the your state’s laws – these are essentially the same laws and regulations that apply to any business operation; however, specific terms and conditions could differently affect your nonprofit, which could cause delays. Like creating the mission statement, this isn’t a job completed overnight. From May to the end of August, two months can be for finishing all the paperwork, while the other two are for processing. Or you could personally allocate the division of time based on your specific situation.
Goal 3 – Apply for Exemption Status
The Internal Revenue Code (IRC) allows corporations with specific purposes to apply for tax-exempt status. If approved, these corporations typically become recognized as Section 501(c)(3) organizations. You’ll need to file Form 1023, but to properly complete the form, you need to have the first two goals accomplished.
The last four months of the year should be more than enough time to have your exemption application filed and processed. Before filing, you’ll need to already have the following:
- Employer Identification Number (EIN)
- Organizing Document (Article of Incorporation, Trust Agreement, or Articles of Association, Constitution, Bylaws or Other Similar Organizing Documents
- Section 501(c)(3) Purpose and Dissolution Clause Verification (Included in Organizing Document)
- Form 2848, Authorized Representative Verification (if applicable)
- Form 8821, Tax Information Authorization
Keep in mind that these estimated time periods are to coincide with a fictional resolution of starting a nonprofit within a year – depending on your state requirements, or how long it takes your tax professional to handle your forms, it could take a much longer time than depicted in this scenario.
Getting your nonprofit recognized as a 501(c)(3) organization is only half the battle – the rest is maintaining your status. Let us help you get your required 990 forms transmitted to the IRS. With ExpressTaxExempt, our simple “Q&A” format allows you to successfully complete your tax return by answering interview-style questions – no photocopies or blank PDFs of complicated IRS forms here. Our live support team in Rock Hill, South Carolina are professionals with the e-filing process. If you have any questions or need assistance, call at (704) 839-2321. We’re available Monday through Friday from 9 a.m. to 6 p.m. EST, or email us at firstname.lastname@example.org.