How to Become a 501C3

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A 501 (c) 3 nonprofit organization is essentially an organization whose goal is to meet one or more needs in a community. Nonprofits do not allocate profit; they are organized under rules that prevent the distribution of profits to owners.Types of nonprofit services include advocacy, arts, civic, cultural, education, health and human service. They can be large, like the Red Cross or Boy Scouts, or very small, such as those that have volunteer-only staff or operate only in one community.

Things You'll Need

  • Lawyer
  • Accountant
  • Prepare your mission statement, which will let people know what your organization is about, what it does, for whom and where in one or two sentences; it is also a way to stand out from other organizations.

  • Create a Board of Directors. Most states require this. The usual number is three board members, but this number differs state to state. Be sure to choose individuals who stand by your mission and are eager to give their talents and time.

  • Draft and file Articles of Incorporation. Articles of Incorporation are the official statement of creation of your organization. It keeps you, your board and staff from legal liabilities your organization might encounter. You must file these with your state’s appropriate agencies.

  • Draft bylaws. These are simply the regulations of how your organization will run. They aren’t required, but are important for helping manage your organization.

  • Develop a budget. Your organization’s success relies very much on this. However, budgeting doesn’t stop at the beginning, so be prepared for startup and future costs.

Tips & Warnings

  • Other things to remember: file for 501 c (3) status; apply for a federal employer identification number (EIN); file for local and state tax exemption; fulfill charitable solicitation law requirements; and apply for a nonprofit mailing permit.
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