How to start an Iowa 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. 

How to form a nonprofit in Iowa

1. Developing a business plan for your Iowa 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 Iowa 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 Iowa

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.

If you intend to apply for 501(c)(3) status, make sure your Articles include a section specifying how you will meet the requirements of this status. Without this language in your Articles, the IRS will not grant tax exemption.

After you've filed, you'll want to hold an organizational meeting to elect directors if you don't already have them. You will also want to create Bylaws to formalize your nonprofit's operating rules.

5. Applying for grants and loans in Iowa 

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

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

• You must file biennial reports with the Iowa Secretary of State between Jan. 1 and April 1 in all odd-numbered years.
• You must keep accurate and current records, including your Articles, bylaws and financial records.
• Refrain from trying to influence legislation, although you can educate the public about issues as long as you don't advocate for a side.
• Do not participate in political campaigns.
• File Form 990, Return of Organization Exempt From Income Tax, with the IRS each year, if your annual receipts require it.
• If you have income over $1,000 from unrelated activities, file Form 990-T with the IRS and Form 1120 with the Iowa Department of Revenue and Finance.
• Do not issue shares or distribute dividends to directors, members or anyone else.

Iowa nonprofit resources

1. Iowa Principles and Practices for Charitable Nonprofit Excellence (PDF): This booklet outlines many of the state and federal regulations surrounding nonprofits and discusses ethical concerns as well.
2. Iowa Secretary of State NonProfit FAQ: This page provides answers to frequently asked questions about nonprofits.

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