How to Start a Nonprofit: The Complete 2026 Guide

Starting a nonprofit is one of the most impactful things you can do — but the paperwork can feel overwhelming. Between state incorporation, IRS applications, and compliance requirements, many aspiring founders get stuck before they start.

This guide breaks the entire process into clear steps. By the end, you'll know exactly what to file, what it costs, and how long each step takes.

Before You Start: Is a Nonprofit Right for You?

Not every mission-driven project needs its own nonprofit. Before you invest months in paperwork and thousands in fees, consider these questions:

• Is this a long-term commitment? If your project has a defined end date or you're testing an idea, fiscal sponsorship might be a better fit. A fiscal sponsor like InFocus Ministries can get you started in weeks instead of months.
• Will you raise more than $100K/year? If not, the ongoing compliance costs of a standalone 501(c)(3) may outweigh the benefits. Consider starting under a fiscal sponsor and transitioning later.
• Do you have 3+ people willing to serve on a board? Most states require at least 3 board members. If you're a solo founder, this is often the first hurdle.

If you're not sure, take our 501(c)(3) Eligibility Quiz — it takes 2 minutes and recommends the best path for your situation.

Step 1: Define Your Mission and Purpose

Every nonprofit starts with a clear mission. Your mission statement guides everything — from your articles of incorporation to your IRS application to your first fundraising appeal.

A strong nonprofit mission statement is:

• Specific — What problem are you solving and for whom?
• Measurable — How will you know you're making an impact?
• Concise — One to two sentences that anyone can understand

Examples:

• "To provide free after-school tutoring to underserved students in Memphis, Tennessee."
• "To protect and restore wetland habitats in the Pacific Northwest through conservation easements and community education."
• "To equip formerly incarcerated individuals with job training, mentorship, and housing assistance during reentry."

Your mission will appear in your articles of incorporation and IRS application, so get it right early. For more guidance, see How to Write a Nonprofit Mission Statement.

Step 2: Choose Your Nonprofit Structure

Most charitable nonprofits file as 501(c)(3) organizations. But there are other options:

Structure	Best For	Tax-Deductible Donations?	Lobbying Allowed?
501(c)(3)	Charitable, religious, educational, scientific orgs	Yes	Limited (no substantial part)
501(c)(4)	Social welfare, civic leagues, advocacy orgs	No	Yes (primary activity allowed)
501(c)(6)	Trade associations, chambers of commerce	No	Yes
Fiscal Sponsorship	New projects, short-term initiatives, testing ideas	Yes (through sponsor)	Depends on sponsor

If you need tax-deductible donations and don't plan significant lobbying, 501(c)(3) is almost always the right choice. For a detailed comparison, see 501(c)(3) vs 501(c)(4).

Step 3: Name Your Organization

Your nonprofit's name must be:

• Unique in your state — Check your Secretary of State's business name database
• Not misleading — Can't imply government affiliation or use restricted words (bank, insurance, university) without authorization
• Available as a domain — Check domain availability early; you'll need a website

Most states require "Inc.," "Incorporated," "Corporation," or "Corp." in your legal name, though you can operate under a DBA (doing business as) for a shorter public-facing name.

Step 4: Recruit Your Board of Directors

Your board of directors provides governance, oversight, and fiduciary responsibility. Requirements vary by state:

• Minimum members: 1 (some states) to 3 (most states)
• Roles required: President/Chair, Secretary, Treasurer (at minimum)
• Independence: Board members should not be related to each other or to staff (some states and the IRS have specific requirements)
• Meetings: Most states require at least one annual meeting

Board members are typically unpaid volunteers. For detailed requirements and best practices, see Nonprofit Board of Directors Requirements.

Step 5: Write Your Bylaws

Bylaws are your nonprofit's internal operating rules. They cover:

• Board structure, terms, and election procedures
• Officer roles and responsibilities
• Meeting requirements (quorum, notice, frequency)
• Conflict of interest policy
• Amendment procedures
• Dissolution clause (required for 501(c)(3) — assets must go to another exempt org)

Your bylaws are an internal document — you don't file them with the state, but the IRS will ask for them with your Form 1023. For a template and detailed guidance, see How to Write Nonprofit Bylaws.

Step 6: File Articles of Incorporation

This is the step that officially creates your nonprofit corporation under state law. You file with your state's Secretary of State (or equivalent agency).

What your articles must include:

• Organization name and registered agent
• Purpose statement (use IRS-approved language for 501(c)(3))
• Dissolution clause (assets go to another 501(c)(3) upon dissolution)
• Statement that no part of net earnings benefits private individuals
• Names and addresses of incorporators

State-specific details matter. Filing fees range from $0 to $125+, processing times vary from same-day (online filing states) to 8+ weeks, and some states have additional requirements. Use our Nonprofit Startup Checklist to get your state's exact requirements, or see our state-by-state guide.

For more detail on what to include, see Nonprofit Articles of Incorporation.

Step 7: Get Your EIN from the IRS

Your Employer Identification Number (EIN) is your nonprofit's tax ID — like a Social Security number for your organization. You need it to open a bank account, file taxes, and hire employees.

How to apply:

• Online (recommended): Apply at IRS.gov — instant, free, available Monday-Friday 7am-10pm ET
• By mail/fax: File Form SS-4 — takes 4 weeks by mail, 4 business days by fax

You must already be incorporated in your state before applying. For step-by-step instructions, see How to Get an EIN for Your Nonprofit.

Step 8: Apply for 501(c)(3) Tax-Exempt Status

This is the big one. You're asking the IRS to recognize your nonprofit as tax-exempt under section 501(c)(3) of the Internal Revenue Code.

Which form to file:

• Form 1023-EZ ($275 fee, 2-4 week approval) — For organizations with projected gross receipts under $50,000/year and total assets under $250,000. Simplified online application.
• Form 1023 ($600 fee, 3-6 month approval) — For all other organizations. Requires detailed narrative, financial projections, and supporting documents.

What you'll need:

• Articles of incorporation (with IRS-required language)
• Bylaws
• EIN
• Detailed description of activities
• Financial projections (3 years)
• Compensation information
• Board member information

For a complete preparation guide, see How to File IRS Form 1023 and use our Form 1023 Preparation Checklist.

Step 9: Register for State Tax Exemptions

Getting federal 501(c)(3) status doesn't automatically exempt you from state taxes. Most states require a separate application for:

• State income tax exemption — File with your state's Department of Revenue
• Sales tax exemption — Some states exempt nonprofits from paying sales tax on purchases
• Property tax exemption — If you own or lease property used for your exempt purpose

Requirements vary significantly by state. Your state-specific checklist includes the exact forms and agencies for your state.

Step 10: Register for Charitable Solicitation

If you plan to fundraise from the public, 41 states require you to register before soliciting donations. This is separate from your tax exemption.

• Registration fees range from $0 to $300+ depending on the state
• Some states exempt small organizations (typically under $25,000 in annual revenue)
• Multi-state fundraising (including online) may require registration in multiple states

Failing to register can result in fines and loss of fundraising privileges. Check your state's requirements in our Nonprofit Startup Checklist.

Step 11: Set Up Your Accounting and Operations

You're incorporated. You're tax-exempt. Now you need to actually run your organization.

What to set up immediately:

• Bank account — Bring your articles of incorporation, EIN letter, and board resolution
• Accounting software — You need fund accounting, not QuickBooks. Track restricted funds, generate Form 990 reports, and manage donor receipts from day one.
• Donor management — Even your first donation needs a proper receipt. Set up a donor CRM to track gifts and generate year-end statements.
• Board governance — Schedule your first board meeting, establish a conflict of interest policy, and set up financial controls

Alignmint is free for nonprofits with up to $100,000 in annual donations. The Starter plan includes fund accounting, donor CRM, volunteer management, events, and AI features — everything a new nonprofit needs to get started without paying for software. See pricing →

Step 12: Know Your Ongoing Obligations

Starting a nonprofit is the beginning, not the end. Your ongoing compliance obligations include:

• Form 990 — Due on the 15th day of the 5th month after your fiscal year ends (May 15 for calendar-year orgs). Miss three consecutive years and you automatically lose your tax-exempt status. See Form 990 for New Nonprofits.
• State annual report — Most states require an annual filing with the Secretary of State ($0-75)
• Charitable solicitation renewal — Annual renewal in states where you're registered
• Board meetings — At least one per year (check your bylaws and state law)
• Financial records — Maintain accurate books, bank reconciliations, and donor records

What This Costs: A Quick Summary

Expense	Cost	When
State incorporation	$0-125+	One-time
IRS Form 1023-EZ	$275	One-time
IRS Form 1023 (full)	$600	One-time
Registered agent (optional)	$100-300/year	Annual
Charitable solicitation registration	$0-300+	Annual
State annual report	$0-75	Annual
Accounting software	$0 (Alignmint Starter)	Ongoing

Total one-time cost: $275-$1,200+ depending on your state and which IRS form you file. Get a state-specific estimate with our Nonprofit Startup Cost Calculator.

Not Ready for Your Own 501(c)(3)?

If the timeline, cost, or complexity feels like too much right now, fiscal sponsorship is a legitimate alternative. A fiscal sponsor like InFocus Ministries can get your project running in weeks — they handle incorporation, tax-exempt status, 990 filings, and financial administration while you focus on your mission.

Read more: Fiscal Sponsorship for New Projects | How to Choose a Fiscal Sponsor

Free Tools to Help You Get Started

• Nonprofit Startup Checklist — Interactive, state-specific checklist with direct links to filing portals
• Cost Calculator — Estimate your total startup costs by state
• 501(c)(3) Eligibility Quiz — Find out if a 501(c)(3), 501(c)(4), or fiscal sponsorship is right for you
• Form 1023 Preparation Checklist — Everything you need before filing with the IRS

Ready to set up your new nonprofit? Schedule Your Free Setup | Start Free — Under $100K in Donations

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Related:

• How to Start a 501(c)(3): Step-by-Step Guide — Focused guide on the IRS application process
• How Much Does It Cost to Start a Nonprofit? — Detailed cost breakdown with state-specific data
• Fiscal Sponsorship vs. Starting a 501(c)(3) — When fiscal sponsorship is the better choice
• Fund Accounting for Nonprofits — Why new nonprofits need fund accounting from day one