How to start an Idaho 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 Idaho 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 Idaho:
 

PROS

CONS

Idaho nonprofits are exempt from Idaho income tax. Nonprofit corporations provide their shareholders, directors and officers with protection from liability. Some Idaho nonprofits have advantages in fundraising, especially 501(c)(3) nonprofits. A nonprofit corporation can outlive its original organizers, unlike partnerships and associations. Grants from some federal and state government organizations may require nonprofit status. Not-for-profit organizations may be exempt from property taxes on all or part of their real property.

Although nonprofits are good for managing large numbers of members, they're not a good choice if you want to retain personal control of your organization. Nonprofits require more time and money to create and maintain than sole proprietorships or partnerships.

How to form a nonprofit in Idaho

1. Developing a business plan for your Idaho 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 Idaho 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 Idaho

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 Idaho nonprofits: If your corporation is a 501(c)(3) nonprofit, you must submit Form 1023, Application for Recognition of Exemption, to the Internal Revenue Service. Exemption from Idaho state income tax is automatic for nonprofits that have obtained 501(c)(3) exempt status from the IRS. Nonprofits are not generally exempt from sales tax in Idaho, but exceptions are sometimes granted. The Idaho Tax Commission makes the final decision regarding sales tax exemptions.

5. Applying for grants and loans in Idaho 

Grants and loans from federal, state, and private sources are a major source of funding for Idaho 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 Idaho

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

• Nonprofit corporations must file annual reports with the Idaho Office of the Secretary of State on or before the end of the month of the formation anniversary date.
• A nonprofit corporation should maintain complete books and records of accounts, as well as minutes of board meetings. Keep these records at your registered office.

Idaho nonprofit resources

• Idaho Nonprofit Center: The mission of the Idaho Nonprofit Center is to provide resources and advocacy to the Idaho nonprofit sector. Their website provides information on starting and operating a nonprofit, and help on obtaining grants.

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 Idaho, like tax breaks and protection from personal lawsuits, but it also comes with extra paperwork and public financial records. After forming an Idaho 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