Starting Your Nonprofit
When you're starting a non-profit in Oklahoma, there are a number of factors to consider, especially if you want to form 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 must still meet certain requirements to protect yourself and to 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 on the efforts and values that will guide your non-profit to meeting its goals.
Considerations for Starting a Nonprofit
- Incorporation protects your personal assets from lawsuits against your nonprofit and its creditor claims. It also protects your trustees, officers and volunteers.
- Oklahoma nonprofits are usually exempt from federal tax on any income that's related to the organization's exempt purposes.
- Oklahoma exempts nonprofits from paying sales taxes on items it purchases, as long as they're used exclusively toward the purpose for which the organization was formed.
- Your nonprofit may qualify to receive public and private grant money.
- Because your nonprofit isn't 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 non-profit.
- Your non-profit's finances are open to public inspection.
Requirements and Mandatory Forms for Creating a Nonprofit
- Certificate of Incorporation, filed with the Oklahoma Secretary of State. Your Certificate must include a required purposes clause and a dissolution of assets provision.
- Name reservation request form
- Incorporator's statement
- Registered agent
- IRS Form 1023: Application for Recognition of Exemption
- Form SS-4: Application for employer identification number
- IRS determination letter
- Registration with the Oklahoma Tax Commission to obtain an Oklahoma corporate tax exemption
- Form 13-16-A, filed with the Oklahoma Tax Commission to obtain the Oklahoma sales tax exemption.
- Registration as a charitable organization with the Oklahoma Secretary of State
- IRS Form 990: Annual Information Return
How to Retain Your Nonprofit Status
After forming your Oklahoma not for profit organization, you must meet 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 non-profit, and pay separate taxes on them. Unrelated activities can jeopardize your nonprofit status if they make 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.
- Make sure that your non-profit distributes its assets to another tax-exempt group, when and if it dissolves.
- Do not make loans to any of your directors or officers.
- Do not issue shares of stock or pay dividends or other shares of income to members, directors or officers.
- File a Return of Organization Exempt from Income Tax form with the IRS each year, if it's required based on your annual gross receipts.
What It Costs to Form an Oklahoma Nonprofit
- Oklahoma's Secretary of State charges a $25 filing fee for non-profit Certificates of Incorporation.
- A name reservation fee is $10.
- An Initial Registration Statement is required before you solicit funds, and this costs $15.
- 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 non-profit will earn more than that, the fee is $850.
Applying for Grants and Loans
Grants you receive can be used for general purposes, or to help meet the operating expenses of your organization. If a grant is awarded for a specific project, you should take steps to restrict the funds to that project.
Oklahoma & National Nonprofit Resources
Fundsnet Services: This site provides a list of available Oklahoma community investment programs from banks and private funders.
The Oklahoma Center for Nonprofits This is an association for nonprofits that offers links to nonprofit resources, as well as suggestions for how to run your organization more effectively. It also connects nonprofits with funding opportunities.
Oklahoma Grant Watch: The Oklahoma Grant Watch can help you research federal and local foundations for your nonprofit. You can explore corporate and international grant resources here for a wide variety of nonprofit activities.
USA.gov: USA.gov 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.