How to start a Kentucky nonprofit

Start by doing research. Is your nonprofit serving a mission in the community? And do you have the means to maintain it? Then make your case: write your mission statement, think about a name, and select your directors carefully. After that, all there’s left to do is file. 

Advantages and disadvantages of having a Kentucky nonprofit organization

A nonprofit is an entity or association created to promote and maintain the well-being and greater good of a community, in which profits (or surplus) are directed towards the business and mission rather than divided among the owners and shareholders. Here are the pros and cons of having one in Kentucky:
 

PROS

CONS

Assets or property at risk in legal proceedings or creditor claims belong to the corporation and attach only to organization-owned assets and property, not to personal property belonging to trustees, officers, or managers. Registering as a nonprofit creates a legal protection buffer between the corporation, on one hand, and trustees, officers, and members in management, leadership, and governance, on the other. Nonprofits may qualify for tax-exemption.

Significant time and effort expenditures are involved in planning new nonprofits. Time and money requirements for Kentucky registration and meeting filing requirements can be prohibitive. If control, autonomy, and independence in corporate governance are key attributes for you, then nonprofit status is not well-suited to your purposes.

How to form a nonprofit in Kentucky

1. Developing a business plan for your Kentucky nonprofit

• Define the purpose and goals of the organization.
• Research the issues and determine what resources you have and need.
• Establish your priorities.
• Market your idea to possible volunteers and board members.
• Create a budget and timeline.

2. Writing a mission statement 

A mission statement clarifies your goals and explains how you plan to meet them. As a guideline, describe what, where, when, and how your nonprofit's purpose will be met, as well as who is going to help your nonprofit meet it. It may take a few tries to narrow your ambitions down into a workable plan.

Although you're creating a nonprofit because you want to give back to your community, you still have to meet certain requirements to protect yourself and to ensure that you achieve 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 your statement on including the efforts and values that will guide your nonprofit to these goals.

3. Choosing a unique name 

Your nonprofit's name must be distinguishable from existing names registered with the Kentucky Secretary of State. This means it shouldn't be the same as or too similar to another organization's name. The name should also not be misleading to the public – it must accurately reflect the nature and purpose of your organization.

4. Filing your Articles of Incorporation in the state of Kentucky

This is the legal document that brings the business to life. It includes important information like the nature of the company and the location of the corporate headquarters. Once accepted, the corporation becomes its own legal entity.
 

Other forms and requirements for Kentucky nonprofits: Continuously maintain a Registered Office, as disclosed in filings. File a Statement of Consent of Registered Agent with the Secretary of State, using the official form. Continuously maintain a Registered Agent, as disclosed in filings. File any change of Registered Office or Registered Agent with Kentucky's Secretary of State immediately. File an Annual Report yearly.

5. Applying for grants and loans in Kentucky 

Grants and loans from federal, state, and private sources are a major source of funding for Kentucky nonprofits. A not-for-profit corporation is responsible for complying with grant requirements and keeping appropriate records. It's important for nonprofits to keep money received from grants separate and apart from the nonprofit's general fund. A good reputation in administering grant monies helps nonprofits obtain more funding from these sources. 

What to do after forming a nonprofit organization in Kentucky

After forming your Kentucky nonprofit organization, you must follow specific guidelines to retain your status.

• File form and two copies of your Articles with the Commonwealth of Kentucky, Secretary of State's Division of Business Filings. File one file-stamped copy of your Articles with the clerk in the county where the nonprofit's registered office is located.
• File a form that conveys the signatory's consent to act as registered agent for a disclosed entity with the Secretary of State's Division of Business Filings. 
• File a form that applies to reserve or renew a business name with the Secretary of State's Division of Business Filings.
• File a form that applies to assume a name under which business will be conducted.
• Nonprofits must file their first Annual Report with the Office of the Secretary of State between January 1 and June 30 of the year after the calendar year in which they were formed.

Kentucky nonprofit resources

1. Kentucky Nonprofit Network: The association is a statewide resource for board members, staff, leaders, advocates, and others that exists to serve, strengthen, and support nonprofits by offering assistance with governance, planning, accountability, fundraising, communications, volunteers, and technology.

Still have questions? Learn more about how to register your own nonprofit with Rocket Lawyer and get started today!
 

Key takeaways Starting a nonprofit takes planning, like creating a mission statement, picking a name, and choosing responsible directors to lead the group. There are good things about having a nonprofit in Kentucky, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming a Kentucky nonprofit, it’s important to stay organized, follow state laws, and stay focused on helping the community to keep your nonprofit status.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a nonprofit organization?
• How to start a nonprofit organization
• How are nonprofits taxed?
• How to get 501(c)(3) tax-exempt status
• How to register a nonprofit by state