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Opening a nonprofit organization (in 5 steps)

Refined Editorial Team
January 12, 2021

According to the National Center for Charitable Statistics, approximately 1.54 million nonprofit organizations are currently registered in the U.S. Cumulatively, they account for 5.6 percent of the country's gross domestic product (GDP). However, their reach goes far beyond GDP. These nonprofits, which include charities, foundations and civic leagues, help their fellow citizens and communities profoundly. For those that are looking to join their ranks, Refined’s editors have put together a guide consisting of the 5 steps to starting a nonprofit.

Step 1: Determine Eligibility 

Make sure your organization would fall into one of the following categories:

  • Charitable or religious
  • Social welfare organization
  • Labor and agricultural organization
  • Business league
  • Veteran organization

Step 2: Choose a name

Check with your state for name availability.  Also, create your "doing business as" (DBA) name when registering.   

Step 3: Appoint a board of directors

The IRS generally requires a minimum of three board members. After appointing the board, begin drafting the bylaws with guidance from your board of directors.  

Step 4: File your incorporation paperwork 

File the articles of incorporation with the state in which the nonprofit will be incorporated in. Each state requires a different fee to be submitted with the application. 

Step 5: Apply for tax exempt status

A nonprofit organization is eligible for exemption from federal income tax. For instructions on applying for tax exempt status, click here.

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