When starting a nonprofit organization, financial planning is a priority.
Initial Costs and Legal Fees
To get your nonprofit up and running, there are some standard fees you will need, which can range from $283 to over $700. These include expenses such as:
- Incorporation fees: $0 to $250 (depending on the state).
- Hiring an employee is optional. You need to decide if you will hire employees, use volunteers, or both.
- The average cost is $858.79 in state and federal fees for permits and regulations.
- On average, the entire process can run upwards of $3,000.
- Starting a nonprofit will cost between $2,875 and $17,740, plus additional operational expenses.
Identifying a Need and Choosing a Niche
Identify a Need and Choose Your Niche. There may be several organizations or foundations already raising funds in your area.
Starting Up and Operating Costs
What are the startup costs for a nonprofit?
- Incorporation fees to become a legal entity, ranging $50-$500 depending on the state.
- A $275 IRS filing fee to process 501(c)(3) nonprofit applications.
- Rent for your nonprofit depends on the location and can vary greatly.
- A lawyer’s assistance could cost over $2,000, but online services are cheaper.
- The startup process has many steps including planning and establishing a mission statement.
Funding and Compensation
What are startup costs for nonprofits?
Types of grants:
- Corporate giving programs
- Private foundations
- Federal programs and endowments
- State and city grants
You can put yourself in a salaried position to pay yourself running a nonprofit.
In New York, additional costs include:
- $75 to file nonprofit Articles of Incorporation
- $10 for a name reservation
- $30 for a certificate of type
Budgeting for Sustainability
Factors affecting costs:
- Filing for tax exemption
- State filing fees
- Fundraising
- Operational expenses
Starting with Limited Funds
How do you start a nonprofit with no money?
- Create core values
- Research costs and budget
- Fundraise for startup costs
- Incorporate
- File for tax-exempt status
FAQs
- What are typical startup expenses?
- How much does incorporating a nonprofit cost?
- Can I use personal funds?
- Can I start without staff?
A nonprofit fulfills a community need and requires committed leaders. Define your purpose and be prepared for IRS scrutiny to maintain nonprofit status. With realistic planning, a nonprofit can be worth the effort.