A Simple Guide to Turning Passion Into a Registered Nonprofit
(U.S.)
WHO THIS GUIDE IS FOR
This checklist is designed for individuals who feel called to help others but do not have a background in nonprofit management. It focuses on the essential steps and federal requirements needed to start a nonprofit organization in the United States.
You do not need to complete every step at once. What matters is doing them in the right order.
PHASE 1: CLARIFY THE MISSION
(Before Any Paperwork)
☐ Identify the problem you want to address
Be specific. Who are you helping? What need is not being met?
☐ Define your mission statement
Write a clear 1–2 sentence statement that explains: – Who you serve
– What you do
– Why it matters
☐ Confirm your purpose qualifies as charitable
Most nonprofits fall under IRS 501(c)(3) purposes, including: – Charitable – Educational – Religious – Scientific – Literary
☐ Choose a nonprofit name
– Unique in your state
– Not misleading
– Available as a website domain (recommended)
PHASE 2: FORM THE ORGANIZATION
(State-Level Basics)
☐ Select your state of incorporation
This is usually the state where you will primarily operate.
☐ Recruit a founding board of directors
Most states require at least three unrelated adults who: – Believe in the mission
– Bring skills, wisdom, or accountability
☐ Define basic leadership roles – Board Chair / President
– Secretary
– Treasurer
☐ Create and approve bylaws
Bylaws describe how the organization operates, including: – Decision-making processes
– Board responsibilities
– Voting rules
– Conflict-of-interest guidelines
(Bylaws are required but not filed with the IRS.)
☐ File Articles of Incorporation with the state
These must include: – Required nonprofit language
– A dissolution clause stating assets go to another nonprofit
☐ Pay required state filing fees
PHASE 3: FEDERAL REQUIREMENTS
(IRS & Tax Status)
☐ Apply for an EIN (Employer Identification Number)
– Required even if you have no employees
– Free from the IRS website
☐ Open a nonprofit bank account
You will need: – EIN
– Articles of Incorporation
– Board authorization
☐ Apply for 501(c)(3) tax-exempt status
Choose the correct IRS form: – Form 1023-EZ – simplified option for small nonprofits
– Form 1023 – standard application
☐ Pay the IRS application fee
This fee is non-refundable.
☐ Receive your IRS determination letter
This letter officially confirms your tax-exempt status.
PHASE 4: GOVERNANCE & COMPLIANCE FOUNDATIONS
☐ Adopt a conflict-of-interest policy
This is required by the IRS.
☐ Hold your first official board meeting
During this meeting: – Approve bylaws
– Approve policies
– Approve banking authority
☐ Record board meeting minutes
Keep written records of all major decisions.
☐ Understand annual federal filing requirements
Most nonprofits must file one of the following every year: – Form 990-N
– Form 990-EZ
– Form 990
Failure to file for three consecutive years results in automatic loss of tax-exempt status.
PHASE 5: FINANCIAL & OPERATIONAL BASICS
☐ Establish basic bookkeeping
– Track all income and expenses
– Never mix personal and nonprofit funds
☐ Create a simple operating budget
Include: – Program costs
– Administrative expenses
– Fundraising costs
☐ Understand donation rules
– Donations are tax-deductible only after IRS approval
– Donors may request written receipts
☐ Set up recordkeeping systems
Maintain copies of: – IRS determination letter
– State filings
– Financial records
– Board minutes
PHASE 6: READY FOR PUBLIC ACTIVITY
☐ Register for charitable solicitation (if required)
Many states require registration before fundraising.
☐ Prepare basic public-facing materials
– Mission statement
– Program description
– Contact information
☐ Launch cautiously and intentionally
Focus first on: – One clear program
– Measurable impact
– Financial sustainability
COMMON BEGINNER MISTAKES TO AVOID
☒ Applying for tax exemption before incorporating
☒ Mixing personal and nonprofit finances
☒ Using board members without defined roles
☒ Fundraising before IRS approval (without disclosure)
☒ Ignoring annual filing requirements
FINAL ENCOURAGEMENT
Starting a nonprofit is not about perfection—it is about clarity, compliance, and commitment. A strong legal foundation allows your organization to grow with credibility and trust.
Passion starts the vision.
Structure sustains the mission.