Frequently Asked Questions:

What are the benefits of becoming a 501(c)3 charitable non-profit corporation?

Fundraising is generally an easier prospect as a non-profit corporation. Having passed the rigors of IRS requirements to be designated as a non-profit gives organizations an implied “seal of approval.”  Other benefits include consumer acceptance of a non-profit compared to organizations without such a designation.

What does it cost to become a 501(c)3?

Filing fees vary by state, but are generally less than $500.  These are fees paid to the state in which the non-profit is being incorporated.  If the organization plans to operate in several states it will have to file in each state it intends to operate.

How long does it take to file the paperwork and be approved?

The first step is to complete the forms required to become a non-profit corporation in the state in which the organization intends to incorporate.  The papers are generally filed with the Office of the Secretary of State.  Contacting the local state representative is a good way to get started in this process.  The representative can provide guidance for his/her state.  If the organization plans to raise funds in several states, it must register in those states as well.  Once articles of incorporation are filed in the state in which the organization will operate, the organization must file for tax exempt status with the IRS (IRS form 1023).  Filling out the required forms takes only a few hours.  State approval or follow up queries generally occur within two months and IRS review and approval can take about three months, depending upon the backlog.

Are there ongoing costs associated with being a 501(c)3?

Yes, at least from an administrative perspective.  Regular IRS filings are required.

Who can provide additional detailed information on how to become a non-profit corporation?

An attorney that specializes in non-profit corporations would be very helpful.  In addition, as mentioned earlier, your state representative and Secretary of State can be valuable resources.  The IRS can also be useful once you have filed your articles of incorporation.  Check the Yellow Pages for the IRS office nearest you.

Helpful resources: 

www.lib.umich.edu/govdocs/fedtax.html

http://www.nonprofitexpert.com/