3 Things You Need to Start Your Own Nonprofit
Starting a nonprofit doesn’t require everything at once. Many founders feel overwhelmed by paperwork, IRS rules, and compliance details before they even begin. In reality, every nonprofit starts with a short list of core requirements.
Before applying for tax-exempt status, fundraising, or launching programs, there are three foundational pieces every nonprofit needs. Once these are in place, the remaining steps tend to follow more clearly.
1. A Clear Charitable Mission
Every nonprofit begins with a mission. This isn’t just a statement of values – it’s the legal foundation of the organization.
Your mission explains:
- Who the organization serves
- What problem it addresses
- How it plans to carry out its activities
From a legal perspective, the mission matters because it shapes:
- The language used in formation documents
- Eligibility for IRS tax-exempt status
- How the organization is allowed to operate and fundraise
A mission that is too vague or overly broad can create issues later, particularly during IRS review. On the other hand, a mission that is clearly written and tied to charitable activities helps define the nonprofit’s scope from the start.
Many founders draft a mission statement early, then refine it before filing incorporation or exemption paperwork.
2. A Governing Board
Nonprofits are typically governed by a board of directors. The board is responsible for oversight, compliance, and high-level decision-making—not day-to-day operations.
What the board does
A nonprofit board generally:
- Sets policy and direction
- Approves budgets and major decisions
- Hires or oversees executive leadership (if applicable)
- Ensures the organization follows its mission
How many board members are required?
Board size requirements vary by state. Some states allow a single director, while others require more. Even where one director is permitted, many nonprofits choose to start with multiple board members to support independence and oversight.
The IRS also reviews board composition during tax-exempt applications. Boards made up entirely of related individuals may raise questions about conflicts of interest and private benefit.
Can founders be on the board?
Yes. Founders often serve as directors, officers, or employees. The key consideration is whether governance decisions are documented, reasonable, and consistent with nonprofit rules.
3. Organizing Documents (Articles and Bylaws)
The third essential requirement is formal documentation that legally organizes the nonprofit.
Articles of Incorporation
The Articles of Incorporation create the nonprofit corporation at the state level. These documents typically include:
- The nonprofit’s legal name
- Its charitable purpose
- Restrictions required for tax-exempt organizations
- How assets are distributed if the organization closes
The IRS often reviews Articles of Incorporation when evaluating tax-exempt applications, so required language matters.
Bylaws
Bylaws are the nonprofit’s internal operating rules. While not always filed with the state, bylaws are commonly requested by:
- Banks
- Grantmakers
- The IRS
Bylaws usually address:
- Board structure and voting
- Officer roles
- Meeting procedures
- Conflict management
Together, the Articles and bylaws show how the organization is structured and governed.
What Comes After These Three Steps?
Once a nonprofit has:
- A defined mission
- A governing board
- Organizing documents
The next steps usually include:
- Applying for an EIN
- Opening a bank account
- Filing for federal tax-exempt status (if applicable)
- Registering for state fundraising requirements
- Setting up ongoing compliance tracking
These steps build on the initial foundation. Skipping the basics often makes later filings more complicated.
Why These Three Steps Matter
Each of these requirements serves a specific purpose:
- The mission defines what the organization is allowed to do.
- The board provides oversight and accountability.
- The documents create the legal structure that supports both.
Without all three, nonprofits may face delays with banking, fundraising, or IRS filings.
FAQs
How many board members do you need to start a nonprofit?
State law determines minimum board size. Some states allow one director, while others require more. Many nonprofits choose multiple directors to support governance independence.
Do you need bylaws to start a nonprofit?
Bylaws are not always filed with the state, but they are commonly required for banking, IRS filings, and governance purposes.
How long does nonprofit formation take?
State incorporation timelines vary. IRS tax-exempt review may take additional time depending on filing type and complexity.
What documents does the IRS require?
The IRS typically reviews Articles of Incorporation, bylaws, financial information, and descriptions of planned activities when evaluating exemption applications.
Can Chisholm Law Firm file my nonprofit for me?
Chisholm Law Firm provides legal services related to nonprofit formation and IRS exemption filings. The scope of services depends on the organization’s needs and engagement terms.
Ready to Start Your Nonprofit the Right Way?
Starting a nonprofit involves legal complexities, but you don’t have to navigate them alone. Chisholm Law Firm has assisted thousands of founders in setting up their nonprofits correctly. We handle the drafting of your Articles and bylaws, help align your mission with IRS criteria, and guide you through the application process.