How to start a Louisiana 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 Louisiana 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 Louisiana:
 

PROS	CONS
Assets or property that might be at risk in a lawsuit or to creditor claims belong solely to the organization. They attach only to organization-owned assets and property, not the personal property of trustees, officers or managers.	A significant amount of time and effort is required to plan a nonprofit. If control, autonomy, and independence in corporate governance are important to you, nonprofit status may not be your best option.

How to form a nonprofit in Louisiana

1. Developing a business plan for your Louisiana 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 Louisiana 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 Louisiana

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 requirements for Louisiana nonprofits: You must draft Nonprofit Bylaws that establish the entity's structure and its governing board. You must obtain tax-exempt status with the IRS and with Louisiana for multiple taxes, including income taxes, franchise taxes and sales taxes. You must complete and file additional forms for state compliance purposes, including annual reporting requirements, IRS requirements, and best business practices. You must file a Certificate of Incorporation.

5. Applying for grants and loans in Louisiana 

Grants and loans from federal, state, and private sources are a major source of funding for Louisiana 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. 

Louisiana nonprofit resources

1. Louisiana Alliance for Nonprofits: This network supports the state's nonprofits. In exchange for an annual membership, you can tap into online resources for fundraising, grants, legislation and advocacy.
2. Louisiana State University Shreveport: The Institute for Human Services and Public Policy at LSU offers services to businesses and nonprofits, especially those applying for federal or private foundation grants that require program evaluations and research.
3. Greater New Orleans Foundation: This website offers workshops, dialogues and instruction for those seeking to improve nonprofit effectiveness.

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 Louisiana, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming a Louisiana 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