How to Start a Nonprofit Organization in the USA (501(c)(3) Step-by-Step Guide)

Want to start a nonprofit organization in the United States? This comprehensive, step-by-step guide will show you exactly how to start a nonprofit in the USA, including how to apply for 501(c)(3) tax-exempt status, how to register your nonprofit, and how to legally fundraise.

Whether you’re creating a charity, foundation, or nonprofit startup, follow these 10 essential steps to launch a legally recognized and IRS-approved nonprofit organization.

✅ Why Start a 501(c)(3) Nonprofit Organization in the United States?

A 501(c)(3) nonprofit is a charitable organization that is recognized by the Internal Revenue Service (IRS) as tax-exempt. Starting a 501(c)(3) nonprofit in the USA allows you to:

  • Receive tax-deductible donations

  • Apply for federal, state, and private grants

  • Operate free from federal income tax

  • Establish credibility with donors and partners

  • Create long-term social impact with a legal structure

If you’re serious about creating a charity or nonprofit in the U.S., registering as a 501(c)(3) is the gold standard.

📌 Step 1: Define Your Mission and Create a Nonprofit Business Plan

Before you register your nonprofit, you need a clear and compelling mission. Your mission statement will define your purpose, target audience, and how you’ll deliver impact.

Your nonprofit business plan should include:

  • Mission and vision statements

  • Program areas and services

  • Organizational structure

  • Budget and projected financials

  • Fundraising strategy

  • Key performance indicators (KPIs)

This plan will support your IRS Form 1023 application and future grant proposals.

📌 Step 2: Choose a Name for Your Nonprofit Organization

Your nonprofit name must:

  • Reflect your mission clearly

  • Be unique in your state

  • Be legally available and not trademarked

  • Have a matching domain name for your website

Search your state’s business registry, check the U.S. Patent and Trademark Office (USPTO), and reserve a domain name as soon as possible.

📌 Step 3: Incorporate Your Nonprofit in a U.S. State

To form a nonprofit organization, you must legally incorporate in a U.S. state.

How to incorporate a nonprofit:

  1. Choose your state of incorporation (usually where you’ll operate)

  2. File Articles of Incorporation with the Secretary of State

  3. Include IRS-compliant language about charitable purpose and asset distribution

  4. Pay the required state filing fee (typically $50–$150)

Once approved, your nonprofit becomes a legal entity.

📌 Step 4: Appoint a Board of Directors

The IRS requires that your nonprofit have a board of directors to oversee operations and governance.

Minimum requirements:

  • At least 3 unrelated board members (in most states)

  • Documented roles and responsibilities

  • Conflict-of-interest policy

Choose board members who bring financial, legal, fundraising, or program expertise.

📌 Step 5: Write Your Nonprofit Bylaws

Bylaws are the internal rules for how your nonprofit will operate.

Your bylaws must cover:

  • How the board is structured

  • How decisions are made

  • Officer roles (President, Secretary, Treasurer)

  • Meeting procedures and voting rights

  • IRS-required clauses for 501(c)(3) eligibility

Keep your bylaws on file — you’ll need to submit them when applying for tax-exempt status.

📌 Step 6: Apply for an EIN (Employer Identification Number)

An Employer Identification Number (EIN) is your nonprofit’s federal tax ID number.

You’ll need an EIN to:

  • Open a nonprofit bank account

  • Apply for 501(c)(3) status

  • Hire employees or contractors

  • File taxes and annual reports

Apply for your EIN online for free at the IRS website.

📌 Step 7: File IRS Form 1023 or 1023-EZ to Get 501(c)(3) Status

To officially become a tax-exempt 501(c)(3) organization, you must apply to the IRS.

Choose the right form:

  • Form 1023 – Standard application for larger nonprofits or complex missions

  • Form 1023-EZ – Streamlined application for smaller nonprofits (under $50K annual budget)

Submit with:

  • Articles of Incorporation

  • Bylaws

  • Narrative of activities

  • Budget and financials

  • Filing fee ($275–$600)

Once approved, you’ll receive an IRS determination letter confirming your 501(c)(3) tax-exempt status.

📌 Step 8: Register Your Nonprofit with State Charity Officials

Most states require charities to register before fundraising or soliciting donations.

You may need to:

  • File a charitable solicitation registration

  • Apply for state tax exemptions

  • Submit financial disclosures or annual renewals

Check with your state’s Attorney General or Division of Charitable Organizations for requirements.

📌 Step 9: File Annual IRS Form 990 (Nonprofit Tax Return)

To stay compliant, your nonprofit must file IRS Form 990 each year.

Which version to file:

  • Form 990-N (if gross receipts are under $50,000)

  • Form 990-EZ (if receipts are under $200,000)

  • Full Form 990 (for larger organizations)

Failing to file for 3 years in a row will result in automatic revocation of your tax-exempt status.

📌 Step 10: Launch Your Programs and Start Fundraising

With your legal status secured, it’s time to activate your mission.

Key steps to launch:

  • Build a website for your nonprofit

  • Start collecting donations (use platforms like Givebutter, Stripe, or PayPal)

  • Apply for grants (local, state, federal, private)

  • Promote your cause on social media and email

  • Deliver your charitable programs and track impact

Make sure to keep good records for donors and board reporting.

🎯 Summary: 10 Steps to Start a Nonprofit in the USA

  1. Define your mission and write a nonprofit business plan

  2. Choose a name and secure your domain

  3. File Articles of Incorporation

  4. Appoint your board of directors

  5. Draft your nonprofit bylaws

  6. Apply for your EIN from the IRS

  7. File IRS Form 1023 or 1023-EZ for tax-exempt status

  8. Register with your state charity office

  9. File IRS Form 990 every year

  10. Launch, fundraise, and grow your nonprofit impact

🚀 Ready to Start a Nonprofit in the USA?

Starting a 501(c)(3) nonprofit can feel overwhelming—but with the right strategy, legal structure, and compliance steps, you can build a lasting, impactful organization.

Need help? Consider consulting a nonprofit attorney or accountant to guide you through incorporation and IRS approval.

Please contact us here for more details

Forbes provides useful information on how to set up a US charity here.
Investopedia also provide useful information