hi I'm Tim CEO founder of Aplos software I've helped start a number of nonprofits
and worked at a church for a number of years so I've gone through this startup
process a bunch of times it's not as difficult as it seems when you do your
first one it's challenging when you do the second one it's like oh I remember
how to do all this stuff and after you've done a few of them you realize if
I just know the steps and the checklist then it's it's pretty easy to do alright
so how to start a non-profit I think there's a lot of steps and there's a lot
that you need to do and you ought to do it in a certain order
when you're starting a non-profit so I think the first place to start this may
be silly as this sounds is starting to think of a name a lot of times you'll
think of a name or want to start a non-profit and then that name is already
registered or there's no website that you can get with the name in it that
kind of thing and so you can start to brainstorm the type of name that you
want and then do domain checks see if the name is available you want to submit
an application that has the name filled out if the names taken it gets spit back
to you so a lot of times you'll want to check to see if this name is available
before you turn in your application that way it's just it's easy you know it's
going to go through so you've got the name of the entity that you'd like to
start the first thing is to kind of bring that name or that thing that
nonprofit into existence so how you do that is with the secretary of state it's
a state agency there's one in every state and you basically file what is
called Articles of Incorporation with the Secretary of State essentially
what you're doing is you're creating a corporation and then you're gonna make
it nonprofit later but you form a corporation
so these Articles of Incorporation its articles it's a one-page for the most
part I think each each state may have its own regulations on this but it's
a document in the state of California one-page document and has very specific
information that needs to be in the Articles of Incorporation things like
your name and address but there's some specific language you have to use and so
you can look up online and look for Articles of Incorporation templates you
know that kind of thing and so you draft this thing and this one-page document
has the name the address and some other specifics on it you go to the Secretary
of State and you turn it in they look up make sure the name is available assuming
it is you give them their filing fee and then boom it's a corporation so now it
exists they give you a stamped copy of your Articles of Incorporation you're
going to need that later to do things like open a bank account and they give
you a state ID number basically some cities won't have a secretary of state
office and so you'd want to reach out the either got a drive to an office that
does exist or you can reach out to these companies who have an office across the
street from the Secretary of State and that's what they do you ask them to walk
it across the street for you so there's companies out there that do that once
you have that corporation created then I you're really kind of on the track then
to turning the corporation into a nonprofit entity it exists at this state
at this point it's in the state's records you have an ID number it doesn't
exist at the federal kind of land yet so you need an employer identification
number or an EIN number and so you can do that on the internet there's there's
forms that you can fill out and mail in there's also even an 800 number you can
call the IRS dial through this thing give them the information and then you
get your EIN number on the phone and then they'll email to you so it's super
easy to get your EIN so at that point the entity exists with the federal
government as well and the next step is to try and take this corporation and
turn it into a tax-exempt corporation this is called
filing a tax-exempt application with the IRS and the application is the form
10:23 which is available on the IRS website this application basically walks
you through getting tax-exempt status the tax-exempt status a lot of times is
interchangeable with 501c3 status if you go to the IRS website or google IRS form
10:23 you'll get a PDF document if you scroll the very bottom of that document
the last page of the document is a 10:23 checklist and that basically includes
everything that you need to complete in order to send in your application to
then try and get tax-exempt status for your corporation tax exempt status
basically means that your corporation doesn't have to pay taxes on its net
income it does not exempt you from sales tax property tax all of the other kinds
of taxes it is an exemption from income tax if you get this 501c3 status and
then it also means that the donations made to this entity are tax-deductible
so that means the donor can write those donations off as a deduction on their
personal taxes separate from that is I got the income as a nonprofit and I
didn't spend any money out of a net income I don't have to pay tax on that
so that's I'm tax exempt and they get a tax deduction so that's kind of what
that is
you