Starting Your Non-Profit
There are several things you must consider when you start a non-profit in Arizona, such as whether you want to form a 501(c)(3) organization or another type of non-profit corporation.
Creating a Mission Statement
When you're creating your non-profit mission statement, begin with a broad view, then pare it down to specific details. You may find that the process is cyclical, requiring repetition of thought and attention to detail so that no important information is omitted from your planning.
501(c)(3) and Other Types of Non-profits
Arizona recognizes two types of nonprofits: tax-exempt and non-tax-exempt. The Arizona Department of State also recognizes charitable organizations, another form of nonprofit organization. Charitable organizations do not have to be officially incorporated.
Considerations for Creating a Non-profit
- Incorporating your organization creates a separate legal entity. Incorporation forms a legal buffer between your organization and its trustees, officers, members, or any other individuals involved in its management and leadership. Assets that might be at risk in a lawsuit or for creditor claims belong solely to the corporation.
- In Arizona, some nonprofits are able to qualify for tax-exempt status and relieve themselves of the requirement to pay corporate income tax.
- Depending on a nonprofit corporation's tax-exempt status, it may also be exempt from paying property taxes on all or part of its real property.
- If having control, autonomy and independence in running your corporation is important to you, then nonprofit status may not be appropriate.
- Nonprofit corporations are not owned by their individual members or stockholders. The CEO's employment is at the discretion of the board of directors.
- The planning process for new nonprofits requires a significant amount of time and effort.
Requirements and Mandatory Forms for Creating a Non-profit
Forming and operating a non-profit in Arizona requires completing and filing several different forms. At a minimum, you'll need the following:
- Cover sheet for corporate filings
- Articles of Incorporation, whether your not for profit corporation is tax-exempt or not tax-exempt.
- Application for authority to conduct affairs in Arizona.
- Certificate of disclosure for corporations and financial institutions.
- Annual reports.
In addition to the required forms, you might also want to file other documents to help ensure that your Arizona non-profit runs smoothly. Some of these include:
- Application for reservation of a corporate name.
- Application to register name of foreign corporation.
- Application for renewal of registered name.
- Articles of domestication for non-profit corporations.
- Articles of amendment for non-profit corporations.
- Application for new authority of foreign non-profit corporations.
How to Retain your Non-profit Status
After you form your not for profit corporation, you must follow specific guidelines to ensure that you keep your status.
- You must file Articles of Incorporation with the Arizona Corporation Commission.
- You must publish your Articles of Incorporation in three consecutive publications of a newspaper with general circulation.
- You'll have to make decisions about members, directors and officers.
What it Costs to Form an Arizona Non-profit
Arizona domestic nonprofits must pay $40 to file their Articles of Incorporation. You can file your Articles on an expedited timetable for $75. There are additional fees for filing Articles of Domestication, applications for Authority to Conduct Affairs as a Foreign Nonprofit, and for applying for a name reservation.
Arizona Non-profit Resources
Arizona Non-profit Capacity Building Initiative Best Practices Report: This Initiative was formed in 2001 to aid the capacity-building needs of nonprofits and to determine what strategies best meet those needs. The site includes a helpful listing of capacity-building resources in Arizona, as well as summarized best practices and lessons learned from other states.
ASU Lodestar Center for Philanthropy & Non-profit Innovation: The Center was formed to promote nonprofit leadership and managerial practices so nonprofits can best accomplish their missions. This site offers can locate valuable leadership and management resources to increase effectiveness and enhance skills sets.
ASU Lodestar Center for Philanthropy & Non-profit Innovation (ENSTEP): ENSTEP promotes and assists nonprofits with strategic planning and capacity building. The program is a partnership between Arizona State University and professionals in the nonprofit community.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.