Starting Your Non-profit
There are several key points to consider when starting a nonprofit, particularly if you want to form a 501(c)(3) organization.
Creating a Mission Statement
Creating a mission statement helps guide your nonprofit toward meeting its goals. If it seems like an overwhelming task at first, begin with a broad view, then narrow it down to specifics. A little repetition isn't bad. It will help ensure that you don't leave out any important details.
501(c)(3) and Other Types of Non-profits
Georgia recognizes multiple types of nonprofits, including charitable, educational, religious, scientific, healthcare and veterans. 501(c)(3) corporations are tax-exempt entities. No nonprofit qualifies automatically for tax exemption.To achieve this status, you must file Form 1023, an Application for Recognition of Exemption, with the IRS.
Considerations For Starting a Non-profit
Advantages:
Assets and property belong to your non-profit corporation. If your non-profit is sued, or if it is vulnerable to creditor claims, these are the only assets that can be reached. The personal property of trustees, officers or managers can't be accessed because incorporation creates a buffer of protection.
Disadvantages:
- The planning process for forming a non-profit takes a significant amount of effort.
- It takes a lot of time and money to incorporate in Georgia and to meet filing requirements.
- If control over your corporation and autonomy in governing it are important to you, non-profit status may not be well-suited to your needs.
Requirements and Mandatory Forms for Creating a Non-profit
- Search the Georgia Secretary of State's Securities and Business Regulations Registered Charitable Organization database before reserving your name with the Corporation Division.
- File your Articles of Incorporation with the Georgia Secretary of State's Corporation Division within 30 days of reserving your non-profit's name.
- Publish your Notice of Intent to Incorporate in the county newspaper.
- Apply for a federal employer identification number, or EIN, with the IRS.
- Create bylaws.
- Conduct an initial meeting of your board of directors.
- Prepare minutes of the initial meeting.
- Apply for federal tax-exempt status.
- Apply for Georgia tax-exempt status. You must submit an IRS determination letter to the Georgia Department of Revenue along with state tax unit Form 3605, an Application for Recognition of Exemption.
- Apply for a Georgia ID number from the Department of Revenue.
- Obtain any necessary business licenses from your local government.
How to Retain Your Non-profit Status
Not for profit creators must focus not only on securing nonprofit status, but they must also retain that status. There are some things you can do to ensure that.
- File your Articles of Incorporation with the Secretary of State.
- Include a transmittal information form. This certifies that you are filing your Articles and that you'll meet the publication requirement.
- File an annual report with the Secretary of State one year after you form your nonprofit.
Tax-Exemption and Other Benefits
Copies of both your Application for Recognition of Exemption to the IRS and your request for a Georgia state income tax exemption, must be filed with Georgia's Department of Revenue. Include your determination letter from the IRS.
You must also supply copies of your nonprofit's formation documents. Attach them to the initial tax return you file with the state, and retain copies because they must be available to the public upon request.
If you want your nonprofit to be exempt from Georgia's state sales tax as well, contact the Sales and Use Tax Unit of the Department of Revenue to find out if you qualify.
What It Costs to Form a Georgia Non-profit
- It costs $100 to file Articles of Incorporation as a non-profit in the Peach State.
- A $40 fee applies for publication of your Notice of Intent to Incorporate.
- The IRS charges a filing fee of $850, unless your nonprofit's annual revenues are below $10,000. In this case, the filing fee is only $400.
Georgia and National Non-profit Resources
- Georgia Center for Nonprofits (GCN): The Center's website is a clearinghouse of information, including online support resources, job boards, newsletters and volunteer training tools.
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.
