Starting Your Non-profit
When starting a non-profit in Nevada, you should consider a number of factors, depending on whether you're forming an 501(c)(3) or other type of organization.
Creating a Mission Statement
You're creating a non-profit because you want to give back to your community, but you must still comply with certain requirements if you're going to protect yourself and ensure that you're meeting your organization's goals. When you create a mission statement, you have an opportunity to explain your organization's purpose. Consider what problem or issue your organization wants to address, then focus your statement on the values and operating procedures that will guide your non-profit to meeting its goals.
Considerations for Starting a Non-profit
Advantages:
- Incorporation protects your personal assets from lawsuits and from creditor claims. It also protects your trustees, officers and volunteers.
- Nevada non-profits are usually exempt from federal tax on any income that's related to the organization's exempt purposes.
- Your Nevada non-profit may automatically receive Nevada's state tax exemption.
- Some sales and purchases are exempt from the general excise tax (GET).
- Your non-profit may qualify to receive public and private grant money.
Disadvantages:
- Because your non-profit is not owned by you or your shareholders, you probably 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 non-profit.
- Your non-profit's finances are subject to public inspection.
- Fundraising activities are outside the organization's stated exempt purpose and are subject to the GET.
Requirements and Mandatory Forms for Creating a Non-profit
- Articles of Incorporation, filed with the Nevada Secretary of State Filing Division
- Name reservation request form
- Incorporator's statement
- Bylaws
- Certificate of Acceptance of Appointment by Registered Agent
- IRS Form 1023: Application for Recognition of Exemption
- Form SS-4: Application for employer identification number
- IRS determination letter
- Form G-6: Application for Exemption from the payment of general excise taxes (GET)
- IRS Form 990: Annual Information Return
- The names, addresses and phone numbers of your officers and registered agent, and the number of your nonprofit's directors, submitted to the Nevada State Attorney General's Office
How to Retain Your Non-profit Status
After forming your Nevada not for profit organization, you must follow specific guidelines to retain your nonprofit status.
- Keep detailed records of all sources of income.
- File annual reports.
- Keep unrelated activities separate from your non-profit and pay separate taxes on any income generated by them. This income could jeopardize your nonprofit status if it makes up a substantial portion of your business.
- Ensure that the time and resources spent on your non-profit are related to your organization's exempt status.
- Maintain detailed records of corporate meetings.
- Ensure that your non-profit's assets are distributed to another tax-exempt group when and if it dissolves.
- Don't make loans to any of your directors or officers.
- Don't issue shares of stock, or pay dividends or other shares of income to members, directors or officers.
What it Costs to Form a Nevada Nonprofit
- The Nevada's Attorney General's Office charges $50 to file non-profit Articles of Incorporation.
- A name reservation fee is $25.
- The fee for your organization's annual list of directors, officers and registered agent is $25.
- The IRS charges a $400 application fee to organizations that expect to earn less than $10,000 in total income over a four-year period. If you expect that your nonprofit will realize gross receipts in excess of $10,000 in a four-year period, the fee is $850.
Applying for Grants and Loans
Non-profits apply for grants and loans to support the general expenses of operating the organization, as well as a specific and related set of activities. When a funder awards a grant, the funds must be used toward the project for which the money was intended.
Nevada and National Non-profit Resources
State of Nevada Attorney General (PDF): This site has more information about applying for grants on behalf of your non-profit.
Nevada Nonprofit News: The Nevada Grant Professionals Association offers articles on donations, funding, and grants, as well as lists of nonprofit professional associations.
Nevada.GrantWatch.com: Get information on federal, state, city, corporation, foundation and international grants at this website.
USA.gov: This page offers information and services about grants, loans, management and tax information for non-profits. It also has funding directories for all states.
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.
