The Centennial State has colorful vistas that few states can boast, and it provides a mile-high setting for forming a Colorado non-profit corporation. A non-profit provides personal asset protection, state and federal tax exemptions, and tax deductions for certain types of gifts. Read on to learn more about starting a non-profit in Colorado.

Get Started Start your Colorado non-profit Answer a few questions. We'll take care of the rest.

Starting Your Non-profit

When you're starting a non-profit in Colorado, there are a number of factors you should consider, particularly if you're forming a 501(c)(3) organization.

Creating a Mission Statement

You're creating a non-profit because you want to give back to your community, but you must still meet certain requirements to protect yourself and to ensure that you're meeting your organization's goals. When you create a mission statement, you can explain your organization's purpose. Consider what problem or issue your organization wants to address, then focus on the efforts and values that will guide your non-profit to its goals.

Considerations for Starting a Non-profit

Advantages:


  • Incorporation protects your personal assets from your organization's lawsuits and creditor claims. It also protects your trustees, officers and volunteers.
  • Colorado nonprofits are usually exempt from federal tax on any income that's related to their exempt purposes.
  • Your nonprofit may qualify to receive public and private grant money.

Disadvantages:


  • Because your nonprofit is not owned by you or your shareholders, you won't have individual control and autonomy over your organization.
  • More paperwork is involved, such as creating bylaws and recording and maintaining corporate minutes.
  • You'll need time and money to apply for the federal tax exemption, and you'll need an accountant or legal professional to help you operate your nonprofit.
  • Your nonprofit's finances are open to public inspection.

Requirements and Mandatory Forms for Creating a Non-profit

  • Articles of Incorporation, filed with the Colorado Secretary of State, Business Division. Your Articles must include a required purposes clause and a dissolution of assets provision.
  • Name reservation request form
  • Incorporator's statement
  • Registered agent
  • Bylaws
  • IRS Form 1023: Application for Recognition of Exemption
  • Form SS-4: Application for \employer identification number
  • IRS determination letter
  • Form DR 0715, filed with the Colorado Department of Revenue
  • Registration as a charitable organization with the Colorado Secretary of State, Division of Public Charities
  • IRS Form 990: Annual Information Return 

How to Retain Your Non-profit Status

After forming your Colorado not for profit organization, you must follow specific guidelines to retain your nonprofit status.

  • Keep detailed records of all sources of income.
  • File annual reports.
  • Keep unrelated activities separate from your nonprofit activities and pay separate taxes on them. Unrelated activities could jeopardize your nonprofit status if they make up a substantial portion of your business.
  • Ensure that the time and resources spent on your nonprofit are related to your organization's exempt status.
  • Maintain detailed records of corporate meetings.
  • Make sure your nonprofit's assets are distributed to another tax-exempt group, when and if it dissolves.
  • Do not make loans to any of your directors or officers.
  • Do not issue shares of stock or pay dividends or other shares of income to members, directors or officers.
  • File a Return of Organization Exempt from Income Tax form with the IRS each year, if it's required based on your annual gross receipts.

What it Costs to Form a Colorado Non-profit

  • Colorado's Secretary of State, Business Division charges a $50 filing fee for nonprofit Articles of Incorporation.
  • A name reservation fee is $25.
  • The IRS charges a $400 application fee to organizations that expect to earn less than $10,000 in total income over a four-year period. This fee increases to $850 for organizations whose gross receipts exceed $10,000 annually over a four-year period.

Applying for Grants and Loans

Grants may be for a general purpose, or they can help meet the operating expenses of your organization. If a grant is awarded for a specific project, you should take steps to restrict the funds to that project.

Colorado & National Non-profit Resources

Fundsnet Services: This site offers a list of available Colorado community investment programs from banks and private funders.

The Denver Foundation: The Denver Foundation provides low interest loans from $1,000 to $50,000 for nonprofits over an 11-month period. It also lists other grant programs and offers assistance to nonprofits in grant writing, website development and marketing.

Colorado Grant Watch: Corporate and international grant resources can be explored here for a wide variety of nonprofit activities.

USA.gov.: USA.gov offers information and services about grants, loans, management, tax information and funding directories for all states.

 

Get Started Start your Colorado non-profit Answer a few questions. We'll take care of the rest.

Get Started Start your Colorado non-profit Answer a few questions. We'll take care of the rest.