How to start an Oklahoma 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 an Oklahoma 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 Oklahoma:
 

PROS

CONS

Forming a nonprofit protects your personal assets from lawsuits against your nonprofit and its creditor claims. It also protects your trustees, officers, and volunteers. Oklahoma nonprofits are usually exempt from federal tax on any income that's related to the organization's exempt purposes. Oklahoma exempts nonprofits from paying sales taxes on items they purchase, as long as they're used exclusively toward the purpose for which the organization was formed. Your nonprofit may qualify to receive public and private grant money.

Because your nonprofit isn't 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.

How to form a nonprofit in Oklahoma

1. Developing a business plan for your Oklahoma 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 Oklahoma 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 Certificate of Incorporation in the state of Oklahoma

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 Oklahoma nonprofits: 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. Registration with the Oklahoma Tax Commission to obtain an Oklahoma corporate tax exemption. Form 13-16-A, filed with the Oklahoma Tax Commission to obtain the Oklahoma sales tax exemption. Registration as a charitable organization with the Oklahoma Secretary of State. IRS Form 990: Annual Information Return.

5. Applying for grants and loans in Oklahoma 

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

After forming your Oklahoma nonprofit organization, you must follow specific guidelines to retain your status:

• Keep detailed records of all sources of income.
• File annual reports.
• Keep unrelated activities separate from your nonprofit, and pay separate taxes on them. Unrelated activities can 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 that your nonprofit distributes its assets 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 required, based on your annual gross receipts.

Oklahoma nonprofit resources

• The Oklahoma Center for Nonprofits: This is an association for nonprofits that offers links to nonprofit resources, as well as suggestions for how to run your organization more effectively. It also connects nonprofits with funding opportunities.

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