This document provides guidance on establishing a nonprofit organization, including key steps and requirements. It outlines essential tasks like drafting articles of incorporation, applying for tax-exempt status, and understanding public charity vs. private foundation classifications. The checklist covers forming a board of directors, obtaining an EIN and filing required documents with the IRS and state. It also gives helpful tips on strategic planning, budgeting, accounting systems and ongoing compliance responsibilities of nonprofit organizations.

1. Launching a Nonprofit - Part 2
By Holly Berline for The Nonprofit Institute

2. Checklist for Starting a Nonprofit
 Purpose
 Board of Directors
 Articles of Incorporation
 Employer Identification Number (EIN)
 Tax Exempt Status
 State Requirement
 ByLaws
 Strategic Planning
 Budget and Funding
 Accounting and Record Keeping Systems
 Nonprofit Mailing Permit
 D & O Insurance

3. Part 1 Review
What’s in a name?
Your Mission
What were you established to do?
Who’s on your Board of Directors?
Articles of Incorporation
By-Laws

4. Filing Articles of Incorporation

5. Apply for an Employer Identification Number (EIN) Online
https://sa1.www4.irs.gov/modiein/individual/index.jsp

6. Form 1023 - Request for Tax Exempt Status
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7. 501(c)(3) Eligibility
“Organizations organized and operated
exclusively for religious, charitable,
scientific, testing for public safety, literary,
or educational purposes or to foster
national or international amateur sports
competition, or for the prevention of
cruelty to children or animals are eligible.”

8. Organized…
An organization must be organized as a
corporation… and the organizing
document (Articles of Incorporation) must
limit the organization’s purpose(s) and
permanently dedicate its assets to exempt
purposes.

9. Operated…
An organization must be operated to further one or more of
the exempt purposes stated in its organizing document
(Articles of Incorporation). A 501(c )(3) organization
must:
 Refrain from participating in political campaigns
 Absolutely ensure its assets and earnings do not unjustly enrich
board members, officers, key management employees or other
insiders
 Not further non-exempt purposes
 Not operate for the primary purpose of conducting a trade or
business
 Not engage in illegal activities
 Restrict legislative activities

10. Public Charity or Foundation?
“A public charity has a broad base of
support, while a private foundation
receives its support from a small number
of donors. This classification is important
because different tax rules apply to the
operation of each entity.”

11. User Fee
The law requires payment of a user fee with each
application. The amount of the user fee depends
on the applying organization's average annual
gross receipts. If the organization's average
annual gross receipts have exceeded or will
exceed $10,000 annually over a four-year period,
the fee is $850. If gross receipts have not
exceed or will not exceed $10,000 annually over
a four-year period, the user fee is $400. An
applicant must certify its gross receipts in Part
XI*.
* Updated May 2010 - increased user fees for exemption applications

12. Stayexempt.org
 June 16, 2010 | Download Presentation
If your organization is brand-new, and you’re thinking about
applying for tax-exempt status, take a look at this mini-
course first. You’ll learn about IRS resources that will make
the process easier and quicker. (approximately 19 minutes)
Applying for Tax-Exempt Status
http://www.stayexempt.org/Mini-
Courses/Applying_for_Tax_Exempt-
An_Overview/applying-for-tax-exempt-organizations.aspx
 Maintaining Tax-Exempt Status
http://www.stayexempt.org/virtualworkshop/TaxExemptStat
us.aspx

13. For more help with your application…
For help in completing Form 1023 or general
questions related to an exempt organization, call
the Exempt Organization Customer Account
Services toll free at
1-877-829-5500. You may also access
information on the IRS website at
http://www.irs.gov/eo
http://www.irs.gov/instructions/i1023/index.html

14. Next Steps
 Strategic Planning
 Budget and Funding
 IRS Filing / Reporting Requirements
http://www.stayexempt.org/home_mini_courses.html
Preparing to File the New Form 990
October 17, 2008 | Download Presentation
Beginning in the 2008 filing year, exempt organizations began working with a
redesigned Form 990 or Form 990EZ. This course provides an overview of
the changes, while the following four courses provide a line-by-line
walkthrough of different sections of the form. Note that while these courses
refer to the 2008 Form 990, the current 2009 Form 990 is very similar.