Introduction
Starting a nonprofit organization in California can be an exciting and rewarding experience. Nonprofits are organizations that are created to provide services or benefits to the public without the goal of making a profit. While starting a nonprofit can be a complex process, it is possible to do so by following the right steps. This guide provides a step-by-step overview of the process for starting a nonprofit organization in California, from understanding legal requirements to filing with the Secretary of State and IRS.
Research California’s Legal Requirements for Starting a Nonprofit
The first step in starting a nonprofit in California is to research the legal requirements. It is important to understand what type of nonprofit you want to create, as well as the rules and regulations for operating in California. There are several types of nonprofits in California, including charitable, religious, and educational organizations, each with its own set of legal requirements.
According to the California Attorney General’s Office, “The laws governing nonprofits depend on the type of nonprofit being formed. Some nonprofits may be required to register with the California Attorney General’s Registry of Charitable Trusts and file annual reports; others may need to register with the Franchise Tax Board or the Secretary of State.” 1
Determine the Type of Nonprofit You Want to Create
When deciding what type of nonprofit you want to create, it is important to consider the goals and purpose of your organization. Different types of nonprofits have different requirements and restrictions, so it is important to choose the one that best fits your organization’s mission. The most common types of nonprofits in California are charitable, religious, and educational organizations.
Understand the Rules for Operation in California
Once you have determined the type of nonprofit you want to create, it is important to understand the rules for operation in California. The California Attorney General’s Office provides detailed information about the rules and regulations for nonprofits in California, including information about fundraising, financial reporting, and corporate governance.
Develop a Mission Statement for Your Nonprofit
Once you have an understanding of the legal requirements for starting a nonprofit in California, the next step is to develop a mission statement for the organization. A mission statement should clearly define the purpose of the organization and identify the goals and objectives. According to the Stanford Social Innovation Review, “A mission statement should be a clear and concise description of your organization’s purpose, goals, and values. It should articulate why your organization exists, what it seeks to accomplish, and how it will go about doing it.” 2
Identify the Board Members and Officers of the Organization
The next step in starting a nonprofit in California is to identify the board members and officers of the organization. The board of directors is responsible for managing the affairs of the nonprofit, while the officers are responsible for carrying out the day-to-day operations. It is important to establish the size of the board, as well as the roles of each member.
Register with the Secretary of State
The next step in starting a nonprofit in California is to register with the Secretary of State. To do this, you must file the Articles of Incorporation, which is a document that provides information about the organization, such as its name, purpose, and address. Once the Articles of Incorporation are filed, you will receive a Certificate of Registration from the Secretary of State.
Obtain an EIN from the IRS
After registering with the Secretary of State, the next step is to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number that is used to identify a business for tax purposes. To obtain an EIN, you must fill out Form SS-4 and submit it to the IRS. Once you have obtained an EIN, you can use it to open a bank account for the nonprofit.
Draft Articles of Incorporation
In addition to filing the Articles of Incorporation with the Secretary of State, you must also draft a set of Articles of Incorporation for the organization. These documents should include information about the organization, such as its name, purpose, and address. They should also detail the purposes of the nonprofit, such as providing services or benefits to the public.
Submit the Application for Tax Exempt Status to the IRS
Once the Articles of Incorporation have been drafted, the next step is to submit an application for tax exempt status to the IRS. To do this, you must fill out Form 1023 and submit it along with financial documents and other supporting materials. If the application is approved, the nonprofit will be granted tax exempt status.
Conclusion
Starting a nonprofit organization in California can be a complex process, but it is possible to do so by following the right steps. This guide provides an overview of the process for starting a nonprofit in California, from understanding legal requirements to filing with the Secretary of State and IRS. By researching the legal requirements, developing a mission statement, and registering with the Secretary of State and IRS, you can successfully start a nonprofit in California.
For more information about starting a nonprofit in California, please visit the California Attorney General’s website https://oag.ca.gov/charities or contact a qualified attorney.
1 California Attorney General’s Office, “Nonprofit Organizations”, https://oag.ca.gov/charities/nonprofits.
2 Stanford Social Innovation Review, “How to Write a Mission Statement and Sample Statements”, https://ssir.org/articles/entry/how_to_write_a_mission_statement.
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