How Long Does It Take to Incorporate a Non-profit? Starting a Nonprofit: Timeline and Process

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Incorporating a nonprofit and obtaining tax-exempt status can take around 6 months to a year to complete the necessary steps.

Steps to Incorporate a Nonprofit

  • Register as a nonprofit in your state of operation.
  • File articles of incorporation with the state’s corporations department.

The tax-exempt status application with the IRS typically takes 1 to 6 months to process. Additionally, the following steps are involved in starting a nonprofit:

  1. Research
  2. Draft bylaws
  3. Build a board
  4. Create programs and services
  5. Secure funding

The online filing for Articles and Initial Report takes 1-3 days, while IRS reviews the applications in typically 6-9 months. Incorporation itself takes several weeks, and applying for 501(c)(3) status also takes additional weeks.

Legal Requirements and Common Questions

The creation of corporate bylaws is required, and a nonprofit company must have at least three directors. Here are some common questions and their answers:

  1. Can I start a nonprofit alone?
    While possible, having a board and team is advisable.
  2. What are the costs?
    These vary based on filing fees, legal fees, licenses. Be sure to budget for expenses.
  3. Can I receive a salary as founder?
    Yes, your board will decide on a reasonable salary.

After submitting your forms to the IRS, expect to be contacted within 3 to 12 months.

Filing with the IRS

To obtain tax exemption, an organization must apply by filing IRS Form 1023. The 1023-EZ form takes 2-4 weeks for processing, while Form 1023 can take 3-6 months, and sometimes up to a year.

  • For organizations processing over $50,000 annually, an expedited 1023-EX form is available for 2 to 3 week processing.

The IRS review process can be extensive and can take 2-12 months to complete. During times of IRS delays, wait periods for the EZ form have been observed to be 8-10 weeks, and 3-6 months for the 1023 form. Form 1023’s processing time is typically 3-6 months, regardless of the application’s complexity.

To ensure the process goes as smoothly as possible:

  1. File as a nonprofit corporation in your state first.
  2. Obtain articles of incorporation.
  3. Then file for an Employer Identification Number (EIN).

The benefit of the 1023EZ is that it’s an online form with a very high approval rate. However, the exact timing depends on the current backlog.

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