Starting Your Non-profit
When you're starting a non-profit in New Hampshire, there are a number of factors to consider, especially if your goal is to create a 501(c)(3) organization.
Creating a Mission Statement
You're creating a non-profit because you want to give back to your community, but you still have to work within certain guidelines if you're going to protect yourself and ensure that you're meeting 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 the values and efforts that will help you meet your goals.
Considerations for Starting a Non-profit
- Incorporation protects your personal assets from lawsuits and creditor claims. It also protects your trustees, officers and volunteers.
- New Hampshire nonprofits are usually exempt from federal tax on any income that's related to the organization's exempt purposes.
- Your New Hampshire nonprofit may automatically receive New Hampshire's state tax exemption as well.
- Some sales and purchases are exempt from the general excise tax (GET).
- Your nonprofit may qualify to receive public and private grant money.
- Because your nonprofit is not 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.
- Fundraising activities are outside the organization's stated exempt purpose are subject to the GET.
Requirements and Mandatory Forms for Creating a Non-profit
- Articles of Agreement, filed with the New Hampshire Office of the Secretary of State
- Name reservation request form
- Incorporator's statement
- IRS Form 1023: Application for Recognition of Exemption
- Form SS-4: Application for employer identification number
- IRS determination letter
- IRS Form 990: Annual Information Return
- The names, addresses and telephone numbers of your officers and registered agent, as well as the number of your directors, submitted to the New Hampshire State Attorney General's Office every 5 years.
How to Retain Your Non-profit Status
After forming your New Hampshire not for profit organization, be sure to follow specific guidelines to retain your non-profit status:
- Keep detailed records of all sources of income.
- File annual reports.
- Keep unrelated activities separate from your nonprofit and pay separate taxes on any income they generate. These activities could jeopardize your nonprofit status if they make up a substantial portion of your business.
- Ensure that your time and resources are related to your organization's exempt status.
- Maintain detailed records of corporate meetings.
- Make sure that assets are distributed to another tax-exempt group when and if your nonprofit dissolves.
- Do not make loans to your directors or officers.
- Do not issue shares of stock or pay dividends or other shares of income to members, directors or officers.
What it Costs to Form a New Hampshire Non-profit
- New Hampshire's Attorney General's Office charges a $25 filing fee for nonprofit Articles of Agreement.
- There is a $5 fee for recording your Articles of Agreement with the town or city clerk where the mailing address of your corporate office is located.
- New Hampshire's name reservation fee is $15.
- Filing Form 990 with the New Hampshire Department of Justice, Charitable Trusts Unit, costs $75.
- A fee of $25 is due every 5 years when you file your annual report.
- The IRS charges an application fee of $400 to organizations that expect to earn less than $10,000 in total income over a four-year period. This fee increases to $850 if you expect that your organization will exceed $10,000 in gross receipts over a four-year period.
Applying for Grants and Loans
Grants may be for general purposes, or they may help meet the operating expenses of your organization. If a grant is awarded for a specific project, you should restrict the funds to that project.
New Hampshire and National Non-profit Resources
NewHampshire.GrantWatch.com: This site offers information regarding federal, state, city, corporation, foundation and international grants.
Plymouth State University: Plymouth State's Lamson Library includes a directory of New Hampshire charitable trusts, resources for grant seekers, and grant writing tips.
USA.gov.: This website offers information and services about grants, loans, management, tax information and 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.