How to start a Minnesota 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 Minnesota

1. Developing a business plan for your Minnesota 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 Minnesota 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 Minnesota

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.

5. Applying for grants and loans in Minnesota 

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

The State of Minnesota has more information about applying for grants on behalf of your nonprofit.

What to do after forming a nonprofit organization in Minnesota

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

• File an annual report with the Attorney General's office each year by the fifteenth day of the seventh month after your fiscal year ends.
• File your annual renewal with the Secretary of State each year by Dec. 31.
• Maintain a board of directors consisting of at least three people.
• Keep accurate records books. These should include your Articles of Incorporation, bylaws, tax-exempt filings, meeting minutes and financial transactions. All records should be easily available for inspection.
• Do not make loans, issue shares or distribute dividends to your directors, members or any other individuals.
• If you have income over $1,000 from unrelated commercial activities, pay taxes on that income.
• Make sure unrelated commercial activities do not make up too many of your organization's activities.
• File the appropriate Return of Organization Exempt From Income Tax with the IRS (Form 990, 990EZ or 990N), based on your annual gross receipts, or total assets as of the end of the year.
• Do not engage in political campaigning or try to influence legislation.

Minnesota nonprofit resources

1. Minnesota Council of Nonprofits: Find information on planning and starting a nonprofit at this site. The Council also offers training sessions, networking lunches and more, all geared toward helping nonprofits reach their goals.
2. Minnesota Secretary of State: The Minnesota Secretary of State provides links to additional information about nonprofits. You can also file your nonprofit online.

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