Okay, so you can’t let the idea go. It’s time to get going and jump off the cliff! It can be confusing to know what you need to file, when to file it, and even where documents need to be filed to get your nonprofit off the ground. RENOSI helps nonprofit organizations get going every day. Today we’ll help you navigate the who, when, and where so you can get going.
1. State registrations
When starting your nonprofit, your state governments will want some paperwork. At RENOSI we call the paperwork your “state registrations”. Making sure you file all of the required documents with the appropriate state governing authority is crucial to setting up your nonprofit for success. The number of required filings may vary depending on the type of nonprofit organization you are organizing as well as the state you are in. You can find state-specific filing requirements on the RENOSI State Registration page.
Some of the most common state registrations include:
• Incorporation –Articles of Incorporation are filed to legally form your nonprofit corporation. Articles of Incorporation are typically filed with the Secretary of State.
• Charity Registration – This filing is required for fundraising organizations. Most states require it be filed BEFORE any fundraising activities occur. Where you file depends on your state.
• Sales Tax Exemption –State sales tax exemption allows your organization to make purchases without paying tax on the purchase. When states offer a sales tax exemption it is generally only available to 501(c)(3) organizations. The exemption is typically filed with the state taxing authority.
• Franchise/Income Tax Exemption – Similar to sales tax exemption, franchise tax exemption means your nonprofit organization is exempt from paying income tax to the state. ADD the “where” for parallel construction.
2. Get an EIN
• The IRS is nosey – If you are conducting business the IRS wants to know who you are and what you earn. Just like a social security number identifies an individual to the IRS, the IRS identifies businesses by number called an EIN (Employer Identification Number). The EIN also is sometimes called a TIN (Taxpayer Identification Number) or an FEIN (Federal Employer Identification Number) just to make things confusing!
3. Apply for tax exemption
• You may have heard about 501(c) organizations and wondered what the heck is that? This 501(c) thing refers to a section of the IRS’ Internal Revenue Code. It’s our favorite book here at RENOSI! Under Section 501(c) there are rules for how different types of groups can obtain tax-exemption and be free, free, free, free from paying federal income tax on their money. In total, there are more than 20 different types of 501(c) organizations.
• There are four different applications used to file for different types of tax exemption:
i. Form 1023EZ/1023 is used to apply for 501(c)(3) status for charitable, educational, and scientific groups.
ii. Form 1023EZ is for the small fry – organizations with an expected gross income of $50,000 or less for each of the first 3 years. Form 1023 is for groups that expect higher levels of gross income.
iii. Form 1024A is used to apply for 501(c)(4) status (the lobbying and social welfare groups).
iv. Form 1024 is used to apply for most other types of tax-exempt status.
4. Consider what you don’t know!
• If you haven’t started a nonprofit before there is a good chance you aren’t an expert on the process. When you are getting started take time to consider what you aren’t sure you understand and look for resources to help you get a better understanding. RENOSI offers a short, online FREE training course that teaches you all the Nonprofit Rigamarole you need to know.
It takes a lot to get going!
Trust us, the hardest part of getting an idea of the ground is jumping off the cliff. Once you do, knowing what will be required to get your idea started is crucial. If all of the government paperwork is giving you a headache, consider a parachute to help with your fall. RENOSI helps nonprofit organizations get started and keep going by taking care of the government paperwork. Create a myRENOSI profile and the geeks behind the internet complete your paperwork so you can focus on your vision. Visit our website for more on the one-stop solution that helps with every step of the getting started process. Don’t just sit on your ideas – get going with myRENOSI!
RENOSI is the leader in helping national organizations set up and manage affiliate chapters. Setting up local, regional and state affiliate chapters is an excellent way to grow your national organization. Managing hundreds and even thousands of chapters, however, is time-consuming and difficult.
Since its inception, RENOSI has provided a simple and stress-free solution to help obtain and maintain tax-exempt status for over 4,500 nonprofits. With the interactive myRENOSI dashboard, our partners can organize their state and federal registrations, allowing our team of experts to help ensure your tax-exempt status is not revoked.