PDF - How To Start A Nonprofit

51 Forward Consulting
NONPROFIT FORMATION SUMMARY
Below is a brief summary regarding how to officially establish your service project into a
501(c)3 nonprofit organization. If you have further questions, feel free to contact
olivia@cancerkidsfirst.org. For guidance on expanding or launching your nonprofit,
check out Olivia’s services at
https://cancerkidsfirst.wixsite.com/oliviazhang/nonprofitconsulting; Olivia is the founder
and CEO of the largest youth-led nonprofit organization aiding kids with cancer
worldwide. She brought together 30,000+ youth in 63 countries to aid an estimated 7,500
patients.
BEGINNING PROCESS
1. 2 options: Make your idea a “community project” first (i.e. work with local places and
volunteers to host bake sales, community drives, etc), then file for 501(c)3 status. **This
allows you to get a grasp of how you’d like things to run as an official nonprofit** Or,
similar to how Olivia started Cancer Kids First, file for 501(c)3 status first, then start
initiating events and fundraisers. **This helps gain corporate/service partners since a
501(c)3 is more official than a community project**
a. What I did wrong: you by NO MEANS need to have a completely set action plan
of how you want to help your targeted service group. After all, the best projects
develop as you work on it. However, something I didn’t fully figure out was the
roles volunteers would play (aka how patients would be helped) and how to
organize/communicate with all volunteers/team members.
2. Draft out a plan of 5 things:
a. Unique name **google other nonprofits with missions similar to yours**, logo,
and mission statement (everything you do with your organization should center
around this mission statement, so make sure it’s not too specific or too general!)
b. Leadership team (what roles do you need, who do you want on your team, and
how will you lead them all?)
c. Service programs (what service(s) are you gonna offer? How is yours different
from other organizations?)
d. How are you going to connect/reach your target service group? Who will you
work with (hospitals, churches, schools, shelters, libraries, other nonprofits, etc)?
e. How will you reach volunteers? Do you plan to keep it in the local area or hope to
expand nation/worldwide?
i. Leadership applications are a great way to spread your organization (get
people from different schools/areas and have them repost/share
information about your nonprofit when you’re just launching)
ii. Social media!! Instagram and TikTok are the big ones. For Instagram,
follow organizations/accounts with a similar mission as you (and do
shoutouts for shoutouts). For Tiktok, select ppl who have a “face” for
TikTok/have gone viral before and know how to play to the trends
f. Logistics: How r you going to collect volunteer applications, create
event/fundraiser plans with your team, host meetings with your team, make your
website, etc
FILING GOVERNMENT FORMS
Filing for nonprofit status differs by state, so the following information may be a little different
for everyone. Filing is also expensive, so consider collecting donations/hosting a fundraiser
before filing. CKF spent upwards of $400-$600 on fees **in 2019; prices may have changed**
Before a nonprofit can apply for 501(c)(3) status it must:

1. Elect at least 3 adult directors not related to each other (they will serve as your mentors;
think about people who will contribute to your nonprofit’s growth. They can be
professionals in your nonprofit’s field, lawyers, teachers, etc)
2. Register as a nonprofit with the state
3. Adopt the bylaws
4. Have an EIN number
1. You need to incorporate your organization with the state you’re in so filing the Articles
of Incorporation ($75) and making organizational bylaws (think of them like a
constitution; it contains internal governing rules that have rules and procedures for
holding meetings, voting on issues, and electing directors and officers) is the first step.
**Olivia will provide templates if you’re interested in her nonprofit consulting services**
a. The government will not review your bylaws, but your state government will
review your Articles of Incorporation (will take about a month for them to
approve this)
b. You only have to file the Articles once
c. There is a online (through your State Corporation Commission website:
https://scc.virginia.gov/getattachment/720789db-bb07-433a-9c8c-432a69a4d8f3/s
cc819.pdf) and paper version, but be sure if you choose the online version, you
have an adult to serve as your Registered Agent who can put down an address for
the government to mail forms to
d. In this document, you fill out some basic information such as your nonprofit's
name and office address. Although preparing this document isn't difficult, you do
need to include specific language to ensure that you'll receive tax-exempt status.
Your state's nonprofit formation packet, if available, most likely includes the
Articles of Incorporation, Bylaws, and Organizational Minutes.
2. Get an EIN; an EIN or Employment Identification Number (also called a Federal Tax
Identification Number or Federal Employment Identification Number), is used to
uniquely identify a business entity. You can think of the EIN as a social security number
for your nonprofit.
a. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-emp
loyer-identification-number-ein-online
3. File 1023-EZ for federal nonprofit recognition (aka 501(c)3 status; this also makes your
organization tax-exempt, meaning you can potentially increase your donations since
donors’ taxes are deducted if they donate to you)
a. Submit a federal 501(c)(3) tax exemption application to the IRS (along with a
copy of your filed articles with your application). Smaller nonprofits may be
eligible to file Form 1023-EZ. This is a shorter, simpler application form that you
complete online. Check the IRS website and instructions to the form which
include an Eligibility Worksheet you must complete to determine if your nonprofit
meets the requirements for using the shorter streamlined form.
g. This step does not apply to nonprofits in all states. In a few states, you must
complete a separate application to get a state tax exemption. In most states, as
long as you file nonprofit articles of incorporation and obtain your federal
501(c)(3) tax-exempt status, your state tax exemption will be automatically
granted. In still others, to get your state exemption you must send in a copy of the
IRS determination letter that granted your federal exemption. Contact your state
tax agency to find out what steps you must take.
MAINTAINING NONPROFIT STATUS
There are yearly forms you need to fill out depending on how much money you raise/spend each
year, so I recommend having someone keep track of all transactions (generally the treasurer/CFO
who can also plan the organization’s annual budgets to submit in annual forms). Usually, these
forms are due the April/May of each year if you choose to have a traditional tax year.
1. Form 100
2. Most small tax-exempt organizations with gross receipts that are normally $50,000 or
less must file the IRS form 990-N, known as the "e-postcard"
MISCELLANEOUS
At the first meeting of the board of directors, the directors take care of formalities such as
adopting the bylaws, electing officers, and recording the receipt of federal and state tax
exemptions. After the meeting is completed, minutes of the meeting should be created and filed
in the nonprofit's records binder. Sometimes, the government requests these.
Also, consider creating a 501(c)3 bank account (check in on your area to see which banks allow
minors to start a business checking/savings account) to begin soliciting donations.

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51 Forward Consulting

NONPROFIT FORMATION SUMMARY

FILING GOVERNMENT FORMS

Before a nonprofit can apply for 501(c)(3) status it must:

MAINTAINING NONPROFIT STATUS

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