Steps for Forming a 501(c)(3) Nonprofit Organization

1. Choose a name for your nonprofit. (While you're at it, select and reserve a Web domain name.)

2. Form your incorporating board of directors (often only three people are needed).

3. Write Articles of Incorporation including a statement of your purpose and submit them to the appropriate office in your appropriate state government with the required fee. (See the CD for the web sites of appropriate state offices.)

4. Wait for a response from your state. (In some states you can expedite the process by paying a surcharge.)

5. Obtain a Federal Employer Identification Number, submitting IRS Form SS-4 (See the CD for Form SS-4).

6. Develop organizational bylaws-the rules by which you will operate.

7. Hold your first board meeting.

8. Review IRS Publication 557, instructions for filing for tax exemption. (See the CD for these instructions or call 1-800-TAX-FORM.)

9. File IRS Form 1023 if you are applying to become a 501(c)(3) tax exempt organization (preferably within 15 months of the date of incorporation). Other kinds of nonprofits organizations may file Form 1024. (See the CD-ROM for a copy of Form 1023.)

10.Pay filing fees of $500 if you anticipate having revenue of over $10,000 per year, or $150 if you anticipate having revenue of less than $10,000 per year and the accompanying Form 8718.

11. Sit back and relex. Celebrate when your letter of determination arrives!

12. Register as a charity within your state (See the CD for Web sites of appropriate state offices.) While you're at it, check your state's laws: some require you to apply for a separate (in addition to federal) tax exemption.

Along the Way to your Nonprofit Status

1. Consider using a fiscal sponsor so you can begin offering programs and developing a reputation.

2. Once you've incorporated and filed IRS Form 1023 you can begin to operate and even solicit contributions as long as you tell donors the application has been filed.