# How to Start a Nonprofit ## How do you start a nonprofit organization? To start a nonprofit, you define a charitable purpose and pick a name, recruit an initial board of directors, file articles of incorporation with your state to form a nonprofit corporation, obtain an EIN from the IRS, adopt bylaws and a conflict of interest policy at an organizational meeting, then apply for federal tax exemption with IRS Form 1023 or the streamlined Form 1023-EZ. After the IRS issues a determination letter, you apply for any state tax exemptions and register for charitable solicitation in each state where you will fundraise; roughly 40 states plus the District of Columbia require that registration before you ask their residents for donations. Starting a nonprofit is really three projects in one: forming a nonprofit corporation with your state, earning federal 501(c)(3) tax exemption from the IRS, and registering to fundraise in every state you solicit. This guide walks through all three in order, with the filings, typical costs, and the compliance calendar that starts the day you incorporate. ## The Three Layers of Starting a Nonprofit New founders often assume a nonprofit is a single filing. It is actually a stack: state incorporation creates the legal entity, the IRS determination letter makes donations tax deductible, and state charitable registration gives you permission to ask residents for money. Each layer has its own paperwork, its own fees, and its own annual obligations. Cornerstone has spent over two decades running state-by-state filing programs for regulated companies, and we apply that same discipline to nonprofit formation and charitable registration, so nothing in the stack gets skipped. ## How to Start a Nonprofit, Step by Step These eight steps take you from an idea to a fundraising-ready 501(c)(3). The order matters: the IRS application needs your incorporation documents and bylaws, and most state charitable registrations want the IRS determination letter, so working out of sequence usually means refiling. ## What Starting a Nonprofit Costs and How Long It Takes The federal costs are fixed: the IRS user fee is $600 for Form 1023 and $275 for Form 1023-EZ. State incorporation fees vary widely but are generally modest, and charitable registration fees are typically tiered to your annual contributions, so we confirm current state fees at filing time rather than quoting stale figures. The timeline runs from a few weeks to several months: incorporation is usually days to weeks, Form 1023-EZ determinations often arrive within about a month, and full Form 1023 review commonly takes three to six months or longer. Budget for the recurring layer too: annual report fees, registered agent service, charitable registration renewals, and the accounting behind your IRS Form 990. For a deeper breakdown, see our post on the cost to start a nonprofit at /blog/how-much-does-it-cost-to-start-a-nonprofit. ## Starting a Nonprofit in Your State Incorporation and charitable registration are state-law questions, and the biggest states each add their own wrinkles: California requires Attorney General registration within 30 days of first receiving assets, Texas has no general solicitation registration but a separate franchise tax exemption filing, Florida registers nearly every soliciting charity annually, and New York routes some purposes through agency consents before you can even incorporate. Start with our state guides for the four largest nonprofit markets, then check the charitable registration rules for every other state where you plan to fundraise. ## Funding Structures Beyond the Donate Button How a new nonprofit gets funded shapes its compliance obligations. A few structures worth knowing before you file anything. ## The Compliance Calendar That Starts at Formation The filings do not end when the determination letter arrives; that is when the recurring calendar begins. Every 501(c)(3) files an annual IRS Form 990, 990-EZ, or 990-N, and three consecutive missed years means automatic revocation of exempt status. The corporation files state annual or periodic reports and maintains a registered agent in every state where it is incorporated or foreign qualified; our registered agent service for nonprofits at /registered-agent-for-nonprofits covers all 50 states. And each charitable registration renews on its own cycle, generally annually with updated financial reporting. This ongoing program is the core of our nonprofit licensing practice at /nonprofit-licensing: we run the calendar so a missed renewal never suspends your right to fundraise. ## How to get licensed 1. **Good Standing Assessment**, We analyze your business model and, in coordination with our attorney partners, help identify which licenses may apply in every state where you want to operate. 2. **Application Preparation**, We prepare all applications, gather required documentation, and coordinate background checks, financial statements, and surety bonds. 3. **Filing & Follow-Up**, We submit applications to each state and actively follow up with regulators to keep the process moving. 4. **Ongoing Filings**, After licensing, we manage your renewals, regulatory filings, and filing calendar so you never miss a deadline. ## Frequently asked questions ### How long does it take to start a nonprofit? Plan on one to six months or more end to end. State incorporation usually takes days to a few weeks. IRS Form 1023-EZ determinations often arrive within about a month, while full Form 1023 applications commonly take three to six months and sometimes longer if the IRS asks follow-up questions. Charitable registrations are filed after the determination letter and vary by state. ### Can one person start a nonprofit? One person can drive the project, but a nonprofit corporation needs a board. Most states require at least three directors; California allows a single director, while New York and Texas require three. The IRS also weighs board independence when reviewing 501(c)(3) applications, so a functioning multi-member board is the practical standard. ### Do I need a lawyer to start a nonprofit? Not legally. Many founders incorporate and file Form 1023-EZ themselves, and filing services handle the mechanics. A lawyer earns their fee in edge cases: unusual purposes, private foundation questions, New York agency consents, or founder compensation issues. Whichever route you take, the purpose and dissolution clauses must be IRS-compliant before you incorporate. ### What is the difference between Form 1023 and Form 1023-EZ? Form 1023-EZ is a streamlined online application with a $275 user fee, available to organizations that project under $50,000 in annual gross receipts and under $250,000 in assets and that pass the IRS eligibility worksheet. The full Form 1023 costs $600, requires narrative descriptions and financial projections, and is mandatory for larger organizations, churches applying voluntarily, schools, hospitals, and several other categories. ### When can a new nonprofit start fundraising? You can generally accept donations as soon as the corporation exists, and contributions are retroactively deductible if the IRS approves an application filed within 27 months of formation. But solicitation is regulated separately: roughly 40 states plus DC require charitable registration before you ask their residents for donations, and most want the registration in place before the campaign starts, not after. ### Does my nonprofit need a registered agent? Yes. Every state requires a nonprofit corporation to maintain a registered agent in its state of incorporation, and foreign qualification in additional states requires an agent in each of them. Many multi-state charitable registrations expect the corporate side to be current, so agent coverage is part of the fundraising stack, not an afterthought. --- ## How to cite this page Cite as: "How to Start a Nonprofit." Cornerstone Licensing. https://cornerstonelicensing.com/how-to-start-a-nonprofit Published by Cornerstone Licensing. When quoting figures or legal requirements, link the canonical URL above and note the last-updated date (2026-07-31). 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