The Setup

So, I gave you the skinny on some common myths when starting your nonprofit. I thought today we would start at the beginning. I want to tell you that a lot of the basics you probably have figured out. However, I want to make sure you get the best bang for your startup buck in these mean nonprofit streets.

One of the things I found the most interesting was that people really didn't have any personal insight into how to start a nonprofit at all. The people who work for established nonprofits really work best at keeping them running. I think about all of the nonprofit organizations in the Phoenix area that have properties, and no matter how many of them I talk to I still cannot figure out with their conversation alone how they acessed the capital to purchase homes as their first order of business. I will break the story on that later, but you should know that I had to find out on my own the long way and one day at a time we will break the long-standing code of silence.

Lets start with the basics. You'll need to have articles of incoporation filed with the Corporation Comission in your state. This article helped me find the one for my state. https://www.llcuniversity.com/50-secretary-of-state-sos-business-entity-search/

Every company wants to charge you some fee to file with the corporation commission, but if you're broke, your best bet is to go straight to your state's website and file yourself. You see, what I found out is that you don't need a long drawn out articles of incorporation anymore. As you complete the information request with your state, they will ask you if you would like to use the form as the articles of incorporation and you can simply say yes.

After the appropriate time, you can print that electronic version and use it anywhere. The reason why I am letting you know this is because of the cost difference.

The cost to have a company complete articles of incorporation can get up to $250, the cost to go through your local corporation is likely going to be less than 25% of that (check your local corporation commission). Its like going to HR Block to have them file your 1040EZ for you. Yes, they are the experts, but the same information they ask for is exactly what the form asks for in the exact same order and you could do it yourself for A LOT less.

The next thing on the list of things is getting a Federal Tax ID. Any poor person whose had to start a business knows this and now so do you. The IRS does not charge for issuing one, so if you are cash-poor, you can just go to their site and follow the prompts to obtain one. The link for that is here:

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

And the last thing that people charge an arm and a leg for. Here's where having little money is helpful. The IRS now has TWO (2) applications for obtaining your 501 (c) 3 certification. Listen, I am not going to tell you whether you need to have it, but if you are interested in becoming a 501 (c) 3 organization then most places will charge you an arm and 3 legs, but you, once again, can do this directly through the IRS. The first application is if your organization makes over 50,000/yr. If thats you, you probably arent googling how to start a nonprofit. For the rest of us though there is what they call the short form. Its an easier version of the long form and it costs less also. The application is IRS Form 1023, the short one is called 1023 EZ.

You can find that form here: https://pay.gov/public/form/start/62759871

The cost to file under form 1023EZ is only $275. The cost for the long form is $600. This is important when you are counting pennies.

The reason why I'm telling you how much it costs, is because no one told me. Often, your very first fundraiser is going to need to be the capital to get everything legit. If you are coming out of your pocket to cover the cost yourself, make sure you get a tax deduction for it. I want you to know how much money you can save on setup costs. The sites are all pretty user-friendly and have good directions. I have paid for someone to do all of it for me and I have done it all myself. The only notable difference is the cost.

I am not knocking your process. If you can both afford to, and desire to pay someone else to do these steps, please do. But for those of you who have limited access and resources, stay tuned, it gets better later.