The most common type of charitable nonprofit organization is a 501(c)(3) organization, also known as a public charity. These organizations are exempt from federal income tax and are eligible to receive tax-deductible donations. The most common type of 501(c)(3) organizations are those that focus on providing education, health care, social services, or other types of charitable work.
For small starting organizations, the actual fees for starting a nonprofit can be relatively low, especially if the organization takes advantage of online filing options and does not require extensive legal or tax services. However, it’s important to keep in mind that even small nonprofits must still comply with all applicable laws and regulations, and it may be necessary to invest in professional services to ensure compliance and ensure the long-term success of the organization.
|Domain name registration||Fees for registering a domain name for the nonprofit’s website||$10 per year|
|Secretary of State name reservation fee (optional)||Fees for reserving the name of the nonprofit with the California Secretary of State||$10|
|State filing fee (online)||Filing fee for registering the nonprofit with the California Secretary of State (online)||Free|
|State filing fee (paper copy) (optional)||Filing fee for registering the nonprofit with the California Secretary of State (paper copy)||$5|
|Employer Identification Number (EIN)||Federal tax ID number required for opening a bank account and filing taxes||Free|
|Bank account setup||Fees for opening a business bank account for the nonprofit||Free|
|Form 1023 filing fee||Filing fee for obtaining tax-exempt status from the IRS||$0 (for most small nonprofits) or $600|
|California Franchise Tax Board fee||Filing fee for obtaining tax-exempt status from the California Franchise Tax Board||$25|
|Filing a Statement of Information (Form SI-100)||For providing updated information about your nonprofit to the California Secretary of State. You have 90 days to do this.||$20, every two years|
Making Decisions and Filling out Forms
Establish your mission
How are you going to help? Your business may not engage in political activities and must not overcompensate its members. For Example:
“Our mission is to empower youth in underserved communities by providing access to education, mentorship, and leadership development opportunities. We believe that every young person has the potential to succeed and make a positive impact in their communities, and we strive to create a supportive and inclusive environment that helps them achieve their goals. Through our programs and partnerships, we aim to break down barriers to success and create a more equitable and just society for all.”
Take the nonprofit startup assessment tool
The Nonprofit Startup Assessment Tool is a resource provided by Candid, a nonprofit organization that provides tools and information for nonprofits and philanthropy. The tool is designed to help individuals and organizations that are considering starting a nonprofit understand the steps and considerations involved in the process.
To access the tool, simply follow the link below and scroll down to the “Nonprofit Startup Resources” section. From there, you can click on the “Startup Assessment Tool” link to begin the assessment. The tool will walk you through a series of questions about your organization and provide customized guidance based on your responses.
Remember that the tool is just a starting point, and there are many other resources available to help you start and run a successful nonprofit. Good luck on your nonprofit journey!
Find a mentor
🤝 Looking for expert guidance in starting or growing your nonprofit organization? SCORE.org can help! 🌟
SCORE is a national nonprofit organization that provides free mentoring services to small business owners and entrepreneurs, including those in the nonprofit sector. Their experienced mentors can offer valuable insights and guidance on a wide range of topics, from business planning and fundraising to marketing and strategic growth.
To request a mentor for your nonprofit organization, simply visit their website and fill out the Mentor Request Form. This form will help pair you with the best mentor based on your specific needs and goals.
Don’t navigate the world of nonprofit entrepreneurship alone – let SCORE help you achieve your goals! Contact them today to get started. 💻🤝
Visit their website to learn more and fill out the form: www.score.org/find-mento…
Create a nonprofit ecosystem blueprint
📝 A nonprofit ecosystem blueprint is like a business model canvas for nonprofits 🌱
It helps break down key components such as 💡value proposition, 🎯target beneficiaries, 🔑key activities, 💰revenue streams and 🔌partnerships. This helps develop a more comprehensive understanding of the organization and create a clear vision, well-designed strategy, and necessary resources to achieve your goals.
|KEY PARTNERS||List of organizations, gov’t offices, or individuals to partner with|
|PROGRAMMING||Details on the programming provided to fulfill the mission|
|ORGANIZATIONAL VALUE||Explanation of why the organization is uniquely suited to fulfill its mission and the problems it’s trying to solve|
|CONSUMER RELATIONSHIPS||Strategies for finding consumers to access the programming|
|CONSUMER SEGMENTS||Description of the key demographic for the programming|
|KEY RESOURCES||Physical space, staff, and tools needed to fulfill the mission|
|OUTREACH||Strategies for marketing the organization to consumers and funders|
|COST STRUCTURE||Description of the most expensive elements of the organization and costs that vary with consumer volume|
|FUNDING||Overview of the organization’s funding sources, including committed funding, grants, contracts, and consumer payments|
👉 Check out this free PDF template to create your own nonprofit ecosystem blueprint: drive.google.com/file/d/…
This is a presentation: prezi.com/wwlfmc-poqfn/n…
Creating a nonprofit ecosystem blueprint can help you communicate your organization’s vision and strategy to stakeholders and ensure that you have a clear path forward for success. 🚀
Choose a name
- Choose a name for your nonprofit 💡: Make sure the name you choose is not already in use by another organization in California by checking the California Secretary of State’s database:
- Optional: Reserve your chosen name with the California Secretary of State 📄: If the name you’ve chosen is available, you can reserve it with the California Secretary of State by filing a name reservation request. This will prevent someone else from using the same name while you’re completing the other steps in creating your nonprofit. The fee for reserving a name in California is currently $10.00.
- To reserve your chosen name with the California Secretary of State, you’ll need to follow these steps:
- a. Complete the Name Reservation Request form: You can find the form on the California Secretary of State’s website:
- b. Submit the form and fee: You can submit the form and fee by mail or in person at the California Secretary of State’s office. You can find more information on submitting the form and fee on the California Secretary of State’s website.
- Once your name reservation request is approved, your chosen name will be reserved for 60 days, giving you time to complete the other steps in creating your nonprofit.
- You’ll also want to make sure that the website domain name is available, so you can check availability on a domain registrar such as Google Domains:
To register your domain name, you’ll need to follow these steps:
- a. Search for your desired domain name: Use the search function on the domain registrar’s website to check if your desired domain name is available.
- b. Choose a domain extension: Choose a domain extension, such as .org, .com, .net, etc.
- c. Complete the registration process: Fill out the necessary information and complete the registration process by paying the fee.
- Once your domain name is registered, you’ll have a unique web address for your nonprofit, which you can use to create a website and establish an online presence.
File the Articles of Incorporation with the California Secretary of State 💼: To officially create your Nonprofit Public Benefit Corporation in California, you’ll need to file Articles of Incorporation with the California Secretary of State. The Articles of Incorporation must include specific information about your nonprofit, including its name, purpose, and the names and addresses of the incorporators. You can find the form for the Articles of Incorporation on the California Secretary of State’s website:
Once you’ve completed the Articles of Incorporation and submitted them along with the required fee to the California Secretary of State, your Nonprofit Public Benefit Corporation will be officially recognized in California.
The next steps are:
- Obtain an Employer Identification Number (EIN) from the IRS 💼: Your nonprofit will need an EIN, also known as an Employer Identification Number, in order to open a bank account, file taxes, and engage in other financial transactions. You can obtain an EIN from the IRS for free by completing Form SS-4: www.irs.gov/forms-pubs/a… or online at sa.www4.irs.gov/modiein/…
- Open a bank account for your nonprofit 💰: Once you have obtained an EIN, you can open a bank account for your nonprofit. You’ll need to provide the bank with your nonprofit’s name, EIN, and formation documents, as well as the names and addresses of the individuals who will have signing authority on the account.
- File for tax-exempt status with the IRS 💸: To be recognized as a tax-exempt nonprofit by the IRS, you’ll need to file for tax-exempt status. The type of form you’ll need to file will depend on the type of nonprofit you’re forming, but the most common form for a 501(c)(3) organization is Form 1023:
www.irs.gov/forms-pubs/a… More info: www.501c3book.com/www.fo… and form1023.org/
- File for tax-exempt status with the California Franchise Tax Board 💰: If your nonprofit is exempt from federal income tax, you may also be exempt from paying the annual franchise tax fee in California. To claim this exemption, you’ll need to file for tax-exempt status with the California Franchise Tax Board. The fee for filing for tax-exempt status with the California Franchise Tax Board is $25.00. You can find more information on the process of obtaining tax-exempt status in California, including the required forms and fees, on the California Franchise Tax Board website:
- File Statement of a nonprofit corporation is required to file an initial Statement of Information (Form SI-100) within 90 days of filing the Articles of Incorporation with the California Secretary of State. This statement must include information such as the name of the nonprofit, the registered agent’s name and address, the names and addresses of the directors, and the address of the principal office and mailing address of the business.
Note: Charitable organizations that are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code and that have annual gross receipts that are normally less than or equal to $50,000 💰 are exempt from the $800 state tax minimum, but you must file an exemption detailed above.
Step 2 in creating a nonprofit organization in California involves establishing the governance structure of your nonprofit. This includes creating bylaws and electing a board of directors. Here are the steps involved in step 2:
- Draft bylaws 📝: Bylaws are the internal rules and regulations that govern the operation of your nonprofit. They outline the responsibilities of the board of directors, the duties of the officers, and the procedures for conducting meetings, voting, and making decisions. You can find sample bylaws for nonprofits online or work with an attorney to draft custom bylaws for your organization.
- Elect a board of directors 🗳️: The board of directors is the governing body of your nonprofit. It is responsible for setting policies, making decisions, and overseeing the operations of the organization. The size of the board, the qualifications for serving on the board, and the terms of office for directors are all outlined in the bylaws.
- Hold an organizational meeting 💬: After the bylaws have been adopted and the board of directors has been elected, the board should hold an organizational meeting to adopt policies, elect officers, and make any other decisions necessary to begin the operations of the nonprofit.
Annual Reports and Taxes
I can provide you with a step-by-step explanation of filing annual reports for a nonprofit in California:
- Determine the filing deadline: Most states, including California, require nonprofits to file an annual report with the Secretary of State. The due date for filing the annual report in California is the 15th day of the 4th month after the close of the fiscal year.
- Gather information: Before filing the annual report, gather information about the organization’s activities and financial information for the previous year. This information should be accurate and up-to-date.
- File the report: The annual report can be filed online through the California Secretary of State’s website. The fee for filing an annual report in California is $30.
- Confirm receipt: After filing the annual report, wait for confirmation from the California Secretary of State that the report has been received and processed.
It is important to note that the annual report is a critical document for maintaining a nonprofit’s good standing with the state. Filing the report on time and with accurate information is essential to preserving the organization’s tax-exempt status. More info here: calnonprofits.org/resour… and here: www.irs.gov/pub/irs-pdf/…
Filing your first tax return as a nonprofit can be a complex process, but with the right preparation and guidance, it can be manageable. Here is a step-by-step guide to help you file your first tax return as a nonprofit:
- Determine your tax-exempt status: The first step in filing your tax return is to determine your tax-exempt status. Most nonprofits are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code.
- Choose a tax year: Nonprofits must choose a tax year, which is the 12-month period used to calculate the organization’s taxable income. The most common tax year for nonprofits is the calendar year (January 1 to December 31).
- Gather financial information: Before you can file your tax return, you will need to gather financial information for the tax year, including revenue, expenses, and any other financial transactions.
- Choose the right form: The most common tax form for nonprofits is Form 990. This form provides information about the organization’s activities, financial information, and governance. Depending on the size of the organization, you may need to file a different form, such as Form 990-EZ or Form 990-N (also known as the e-Postcard).
- Complete the form: Complete the form with the financial information and other required information. You may need to consult with an accountant or tax professional to help you complete the form.
- File the return: File the tax return with the IRS by the deadline, which is usually 5 months after the end of the tax year.
- Maintain records: Keep a copy of the tax return and any supporting documentation for at least 3 years in case the IRS needs to review your return.
By following these steps, you can successfully file your first tax return as a nonprofit and maintain your tax-exempt status. It’s important to note that the specific requirements and procedures may vary depending on the specifics of your organization, so it’s always a good idea to consult with a professional or an attorney to ensure that you are meeting all the necessary requirements.
The Community Foundation of Nevada County 🌐 www.nevcofoundation.org/ 💼 is a nonprofit organization that supports community organizations, schools, and individuals in the Nevada County area of California. 🌲🌻🌄
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- California Association of Nonprofits 🌐 calnonprofits.org/ 💼: The California Association of Nonprofits provides advocacy, resources, and training to help nonprofits succeed in California.
- Northern California Grantmakers 🌐 ncg.org/ 💼: Northern California Grantmakers provides resources and support to help nonprofits in Northern California.
- Philanthropy California 🌐 www.philanthropyca.org/ 💼: Philanthropy California provides resources and support to help nonprofits and foundations in California.
- The Law Foundation of Silicon Valley 🌐 www.lawfoundation.org/ 💼: The Law Project of Silicon Valley provides legal services and support to help nonprofits and other community organizations.
- Center for Volunteer & Nonprofit Leadership 🌐 www.cvnl.org/ 💼: The Center for Volunteer & Nonprofit Leadership provides training, resources, and support to help nonprofits in Northern California.
- Silicon Valley Council of Nonprofits 🌐 svcn.org/ 💼: The Silicon Valley Council of Nonprofits provides advocacy, resources, and support to help nonprofits in the Silicon Valley region.
- Center for Nonprofit Management 🌐 cnmsocal.org/ 💼: The Center for Nonprofit Management provides training, resources, and support to help individuals and organizations start and manage nonprofits in Southern California. They offer a variety of resources and services, including in-person training, consulting, and online resources.
These are just a few examples of nonprofits that offer resources and support to help people start and run nonprofits in California. The specific resources and services offered may vary, but these organizations can be a helpful starting point for those seeking support in California.
- Candid 🌐 candid.org/ 💼: Candid (formerly known as GuideStar and Foundation Center) is a nationwide nonprofit that provides resources and tools to help individuals and organizations start and manage nonprofits. They offer a variety of training and support programs, including webinars, in-person workshops, and a library of online resources.
- SCORE 🌐 www.score.org/ 💼: SCORE is a national nonprofit that provides mentoring and resources to help small businesses and nonprofits succeed. They offer free workshops, mentoring, and online resources to help people start and grow nonprofits.
- Nonprofit Ready 🌐 www.nonprofitready.org/ 💼: Nonprofit Ready is an online platform that provides free training and resources to help individuals and organizations build and strengthen their nonprofits. They offer courses on topics such as fundraising, board governance, and financial management.
- Taproot Foundation 🌐 taprootfoundation.org/ 💼: Taproot Foundation is a nonprofit organization that connects skilled volunteers with other nonprofits in need of pro bono services. From website design to marketing strategy, Taproot volunteers offer their expertise to help organizations make a bigger impact. Whether you’re a professional looking to give back or a nonprofit in need of support, Taproot Foundation is a fantastic resource. Visit their website to learn more and get involved! 🤝💻
- Hurwit & Associates 🌐 www.hurwitassociates.com… 💼:Hurwit & Associates is a leading law firm that specializes in nonprofit law, and their Q&A page is a great resource for anyone looking to start a nonprofit foundation. The page covers a wide range of topics, including incorporation, tax-exempt status, fundraising, and governance.The Q&A format is user-friendly and provides clear, concise answers to some of the most common questions about starting up a nonprofit foundation. Whether you’re just getting started or looking to refine your existing foundation, Hurwit & Associates’ Q&A page is a valuable resource to have on hand. 💻🌟
- Nonprofit Technology Network 🌐 www.nten.org/ 💼: The Nonprofit Technology Network provides resources, training, and support to help nonprofits use technology effectively. They offer a variety of resources and tools, including webinars, online courses, and an annual conference.
- National Council of Nonprofits 🌐 www.councilofnonprofits…. 💼: The National Council of Nonprofits is a nationwide nonprofit that provides advocacy, education, and resources to help nonprofits thrive. They offer a variety of resources and guides on topics such as starting a nonprofit, fundraising, and board governance.
- Independent Sector 🌐 independentsector.org/ 💼: Independent Sector is a national nonprofit that provides advocacy, resources, and support to help nonprofits succeed. They offer a variety of resources and tools, including research, policy analysis, and webinars.
- BoardSource 🌐 boardsource.org/ 💼: BoardSource is a national nonprofit that provides training, resources, and support to help nonprofit boards and board members. They offer a variety of resources and tools, including online courses, publications, and consulting services.
- Nonprofit Finance Fund 🌐 nff.org/ 💼: The Nonprofit Finance Fund provides financing, consulting, and support to help nonprofits achieve financial sustainability. They offer a variety of financial products and services, including loans, lines of credit, and financial management consulting.
- United Way 🌐 www.unitedway.org/ 💼: United Way is a national nonprofit that provides resources and support to help individuals and organizations create positive community change. They offer a variety of programs and initiatives, including fundraising campaigns, community engagement programs, and advocacy efforts.
The types of support and resources provided by these nonprofits vary, and not all of the support may be free. Some nonprofits may offer free resources and services, while others may charge a fee for certain programs or services.
For example, some of the resources and training offered by Foundation Center, Nonprofit Ready, and TechSoup are free of charge. Others, such as consulting services or in-depth training programs, may have a fee associated with them.
It’s important to research each nonprofit and the specific resources or programs they offer to determine if there are any associated costs. Some nonprofits may offer scholarships or other forms of financial assistance to help cover the costs of their programs or services.
In general, many nonprofits that offer support to help people start and run nonprofits are committed to providing accessible resources and services to help strengthen the nonprofit sector, so it’s worth exploring the available options to find the best fit for your organization and budget.