Starting Your Iowa Non-profit
You can incorporate your non-profit as a corporation, a limited liability company or a trust in Iowa. You can also form an unincorporated association. A nonprofit corporation generally offers more liability protections than other nonprofit forms, and if you want to file for 501(c)(3) status, your organization must be incorporated.
Creating a Mission Statement
Creating a mission statement is a great way to keep your nonprofit on track. When you define your mission, it will help you stay focused on your primary purpose. This can be an advantage when you're tempted to stray into other activities. Your nonprofit will be most effective with a narrow mission.
501(c)(3) and Other Types of Non-profits
After you've formed your nonprofit with the state, you can apply for 501(c)(3) designation with the Internal Revenue Service. This designation refers to the specific part of the Internal Revenue Code that deals with tax-exempt organizations. This federal status is not automatic when the state recognizes your nonprofit organization.
Requirements and Mandatory Forms for Creating a Non-profit
You must file Articles of Incorporation with the Iowa Secretary of State to form a nonprofit corporation. If you intend to apply for 501(c)(3) status, make sure your Articles include a section specifying how you will meet the requirements of this status. Without this language in your Articles, the IRS will not grant tax exemption.
After you've filed, you'll want to hold an organizational meeting to elect directors if you don't already have them. You will also want to create bylaws to formalize your nonprofit's operating rules.
How to Retain Your Non-profit Status
After you've created your nonprofit, you must follow state and federal rules to maintain your not for profit status.
- You must file biennial reports with the Iowa Secretary of State between Jan. 1 and April 1 in all odd-numbered years.
- You must keep accurate and current records, including your Articles, bylaws and financial records.
- Refrain from trying to influence legislation, although you can educate the public about issues as long as you don't advocate for a side.
- Do not participate in political campaigns.
- File Form 990, Return of Organization Exempt From Income Tax, with the IRS each year, if your annual receipts require it.
- If you have income over $1,000 from unrelated activities, file Form 990-T with the IRS and Form 1120 with the Iowa Department of Revenue and Finance.
- Do not issue shares or distribute dividends to directors, members or anyone else.
What It Costs to Form an Iowa Non-profit
Iowa charges a $20 filing fee for forming a nonprofit corporation.
The IRS also charges a fee for your tax-exemption application. This fee is currently $400 if your annual revenues are $10,000 or less, and $850 if your revenues are more than $10,000.
Iowa & National Nonprofit Resources
Iowa Principles and Practices for Charitable Nonprofit Excellence (PDF): This booklet outlines many of the state and federal regulations surrounding nonprofits and discusses ethical concerns as well.
Iowa Secretary of State NonProfit FAQ: This page provides answers to frequently asked questions about nonprofits.
USA.gov for Nonprofits: Find information about grants, loans and other issues important to nonprofits at USA.gov.
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.
