How to start an Arizona nonprofit

Start by doing research. Is your nonprofit serving a mission in the community? And do you have the means to maintain it? Then make your case: write your mission statement, think about a name, and select your directors carefully. After that, all there’s left to do is file. 

Advantages and disadvantages of having an Arizona nonprofit organization

A nonprofit is an entity or association created to promote and maintain the well-being and greater good of a community, in which profits (or surplus) are directed towards the business and mission rather than divided among the owners and shareholders. Here are the pros and cons of having one in Arizona:
 

PROS

CONS

Registering your organization creates a separate legal entity. Doing so forms a legal buffer between your organization and its trustees, officers, members, or any other individuals involved in its management and leadership. Assets that might be at risk in a lawsuit or for creditor claims belong solely to the nonprofit. In Arizona, some nonprofits are able to qualify for tax-exempt status and relieve themselves of the requirement to pay corporate income tax. Depending on a nonprofit corporation's tax-exempt status, it may also be exempt from paying property taxes on all or part of its real property.

If having control, autonomy, and independence in running your corporation is important to you, then nonprofit status may not be appropriate. Nonprofit corporations are not owned by their individual members or stockholders. The CEO's employment is at the discretion of the board of directors. The planning process for new nonprofits requires a significant amount of time and effort.

How to form a nonprofit in Arizona

1. Developing a business plan for your Arizona nonprofit

• Define the purpose and goals of the organization.
• Research the issues and determine what resources you have and need.
• Establish your priorities.
• Market your idea to possible volunteers and board members.
• Create a budget and timeline.

2. Writing a mission statement 

A mission statement clarifies your goals and explains how you plan to meet them. As a guideline, describe what, where, when, and how your nonprofit's purpose will be met, as well as who is going to help your nonprofit meet it. It may take a few tries to narrow your ambitions down into a workable plan.

Although you're creating a nonprofit because you want to give back to your community, you still have to meet certain requirements to protect yourself and to ensure that you achieve 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 including the efforts and values that will guide your nonprofit to these goals.

3. Choosing a unique name 

Your nonprofit's name must be distinguishable from existing names registered with the Arizona Secretary of State. This means it shouldn't be the same as or too similar to another organization's name. The name should also not be misleading to the public – it must accurately reflect the nature and purpose of your organization.

4. Filing your Articles of Incorporation in the state of Arizona

This is the legal document that brings the business to life. It includes important information like the nature of the company and the location of the corporate headquarters. Once accepted, the corporation becomes its own legal entity.
 

Other forms and requirements for Arizona nonprofits: Cover sheet for corporate filings. Articles of Incorporation, whether your not-for-profit corporation is tax exempt or not tax exempt. Application for authority to conduct affairs in Arizona. Certificate of disclosure for corporations and financial institutions. Annual reports. In addition to the required forms, you might also want to file other documents to help ensure that your Arizona nonprofit runs smoothly. Some of these include: Application for reservation of a corporate name. Application to register name of foreign corporation. Application for renewal of registered name. Articles of domestication for nonprofit corporations. Articles of amendment for nonprofit corporations. Application for new authority of foreign nonprofit corporations.

5. Applying for grants and loans in Arizona 

Grants and loans from federal, state, and private sources are a major source of funding for Arizona nonprofits. A not-for-profit corporation is responsible for complying with grant requirements and keeping appropriate records. It's important for nonprofits to keep money received from grants separate and apart from the nonprofit's general fund. A good reputation in administering grant monies helps nonprofits obtain more funding from these sources. 

What to do after forming a nonprofit organization in Arizona

After forming your Arizona nonprofit organization, you must follow specific guidelines to retain your status:

• You must publish your Articles of Incorporation in three consecutive publications of a newspaper with general circulation.
• You'll have to make decisions about members, directors, and officers.

Arizona nonprofit resources

• ASU Lodestar Center for Philanthropy & nonprofit Innovation: The Center was formed to promote nonprofit leadership and managerial practices so nonprofits can best accomplish their missions. This site can locate valuable leadership and management resources to increase effectiveness and enhance skill sets.

Still have questions? Learn more about how to register your own nonprofit with Rocket Lawyer and get started today!
 

Key takeaways Starting a nonprofit takes planning, like creating a mission statement, picking a name, and choosing responsible directors to lead the group. There are good things about having a nonprofit in Arizona, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming an Arizona nonprofit, it’s important to stay organized, follow state laws, and stay focused on helping the community to keep your nonprofit status.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a nonprofit organization?
• How to start a nonprofit organization
• How are nonprofits taxed?
• How to get 501(c)(3) tax-exempt status
• How to register a nonprofit by state