Please choose from the following
commonly asked questions.
I want to start a nonprofit organization.
What steps do I need to take to get my nonprofit agency started?
- Should I?
Before you get started, you should explore if creating a nonprofit is
really the right choice. There are more than 21,000 nonprofits in
Dallas alone and there is very limited funding available. Ask
yourself if you are prepared to compete for those limited funds.
- Review
"Get Ready Get Set: What You Need to Know Before Starting a Nonprofit"
- Review "Forming
a Nonprofit Tax-Exempt Corporation in Texas"
- Research other nonprofits in the area who may already be doing
what you want to do and explore ways to partner with them.
- File for a Certificate of Formation with the Secretary of
State
A nonprofit corporation is created by filing a certificate of formation
with the Secretary of State in accordance with the Texas Business
Organizations Code ("BOC"). "Nonprofit corporation" means a corporation
no part of the income of which is distributable to members, directors,
or officers [BOC, Section 22.001(5)]. A nonprofit corporation may be
created for any lawful purpose, or purposes permitted by the BOC. Not
all nonprofit corporations are entitled to exemption from state or
federal taxes.
Download
Certificate of Formation forms
- Apply for Tax Exempt Status with the IRS
Download the Tax Exempt forms or contact the IRS at 1-800-829-3676 or visit the IRS District office
at 1100 Commerce Street for IRS Publication 557,
Form 1023, Form ss-4
and Form 8718. Publication 557 explains the process which you must follow
to complete Form 1023 for the IRS to review prior to their issuing a
determination letter. Funders and others may ask to see a copy of your
determination letter as proof that you are a “qualified”
nonprofit organization.
Fee to file for tax exemption/request determination letter:
$300 - $900
Download Forms
View the steps of interactions with the IRS
FAQs About Applying for Tax-Exemption with the IRS
- Apply for Texas Franchise & Sales Tax Exemption with the
Texas Comptroller
Certain 501(c) tax-exempt organizations may qualify for exemption from
franchise and sales taxes in Texas. Refer to the website listed below
for a list of eligible organizations and, if appropriate, submit the
proper exemption application (AP-204, AP-205, AP-206, AP-207, AP-209)
along with a copy of the articles of incorporation and the IRS
determination letter.
http://www.window.state.tx.us/taxinfo/exempt/
- Develop your Bylaws
Your bylaws will guide your organization’s day to day
operations. These should be drafted carefully and may require the
assistance of an attorney experienced in nonprofit law.
- Develop a Board of Directors with at least 3 unrelated
members.
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Where can I obtain the nonprofit
start-up forms?
All of the nonprofit start-up forms can be obtained by calling the IRS
at 1-800-829-3676 or on to their website at
http://www.irs.gov/formspubs/index.html.
IRS Publication 557
- Reviews process to apply for Tax Exempt Status
Instructions for Form
1023
Form 1023 -
Application for 501c3 Tax Exemption
Instructions for Form SS-4
Form SS-4 -
Application for Employer Identification Number
Form 8718 - User Fee
for Exempt Organization
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Where do I file my Certificate of
Formation (formerly called Articles of
Incorporation)?
The Certificate of Formation is filed with the Secretary of State's office in Austin. They may be contacted at (512) 463-5586. More information may be found by clicking the following link: http://www.sos.state.tx.us/corp/nonprofit_org.shtml.
Download
Certificate of Formation forms
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Are there costs involved in filing the 501(c)(3)
paperwork with the IRS?
Fees range from $300 - $900. See IRS form 8718 to determine the
appropriate filing fee.
Form 8718
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Is it necessary to hire an attorney
when applying for a 501(c)(3)?
It is always wise to consult with an attorney familiar with nonprofit
law to assist you in drafting your articles of incorporation and by-laws
for your organization, as well as the completion of IRS forms 1023.
Technical assistance in completing form 1023 is also available from the
IRS by calling toll free at 1-877-829-5500.
If your agency serves the low-income population, assistance may also be available through Texas C-Bar:
http://www.texascbar.org/
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How do I apply for exempt status
from the limited sales, excise and use tax?
An organization must complete an Application for Exemption and file with
the Texas Comptroller of Public Accounts. For more
information and to obtain a form, please visit the Texas Comptroller Website:
http://www.window.state.tx.us/taxinfo/taxforms/93-forms.html
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Is there an agency like the Center
in another part of the Country?
The Alliance for Nonprofit Management – Resource for and listing
of management support organizations (MSOs), individual professionals and
a range of national/regional, umbrella, research and academic, publishing
and philanthropic organizations that provide technical assistance (training
and consulting) to nonprofits.
Search for a Consultant or Provider in your area using the search at the
bottom of the page.
In another area in Texas?
Texas Nonprofit Management Assistance Network - a network of centers
and organizations, strategically located throughout Texas, that delivers
quality management support services and resources to the nonprofit sector.
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What is a Form 990?
Just as individuals and corporations must file annual "tax returns,"
nonprofits must file annual "information returns." (Churches, government
agencies, individuals, and businesses need not file Form 990.) Federal
Form 990 ("Return of Organizations Exempt from Income Tax") and Form
990EZ compile financial information, program activities, names of board
members, and other basic information. Form 990EZ is a shortened version
of Form 990 for smaller organizations.
More
information on Form 990 & 990-EZ
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Should I hire a CPA?
Hiring an accountant can assist your organization in a number of ways,
from helping to set up accounting systems to developing a budget and system
for your monthly review of budget vs. actual results. More information
about hiring a CPA and about accounting and financial matters in general
can be found at: http://www.managementhelp.org/np_progs/fnc_mod/fnance.htm.
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How do I set up a Board of Directors?
The first step in setting up your board is to recruit board members.
Additional information regarding setting up and
maintaining your Board can be found at: http://www.mapnp.org/library/boards/boards.htm#anchor585925.
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How do I recruit staff?
Opportunity 501 is a nonprofit job listing for Texas published by the Center for Nonprofit Management. Postings are listed in an online job bank, as well as in a print edition mailed to 2,500 nonprofits, career centers and universities. To review current postings, click here. Rates start at just $80 and include both an online and print listing. Ads can also be posted within 24 hours for immediate exposure. For more information on posting a job, click here.
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