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Just like any business, a new nonprofit generally needs money to get off the ground. You’ll need to pay a fee to establish a nonprofit in your state, as well as another fee to file for nonprofit status with the Internal Revenue Service (IRS). Based on your location, it can cost from about $300 to $1,200 or more in state and federal fees to start a nonprofit organization in the U.S.
On top of that, you’ll likely face other administrative and operating costs, such as legal fees, office rent, equipment, supplies, marketing, and staff. Read on for a closer look at how much it costs to start a nonprofit organization, as well as tips for how to get the funding you need to get up and running.
Key Points
• Filing fees for forming a nonprofit vary by state, ranging from $8 to more than $200.
• Applying for tax-exempt status with the IRS costs $275 or $600, depending on whether you file Form 1023-EZ or Form 1023.
• Expenses for marketing, office supplies, technology, and staff salaries should be budgeted to ensure smooth operations from the start.
• Initial investments in fundraising tools and compliance with state regulations (e.g., annual reports, permits) are essential and may add to startup costs.
• You may be able to pay for nonprofit startup costs with startup grants, crowdfunding for nonprofits, fundraising, and small business loans.
What Are the Costs Associated With Starting a Nonprofit?
How much it costs to start a nonprofit organization will depend on where you plan to open it, the type of nonprofit you want to create, and whether you’ll need office space and staff. Here’s a look at some nonprofit startup costs you may need to budget for.
Filing Fees
To get your startup nonprofit going, you’ll have to pay some filing fees. This includes incorporating with the state where you’ll be running your nonprofit (for specific costs, see the chart below).
Once you have your articles of incorporation, you’ll need to apply for tax-exempt status with the Internal Revenue Service (IRS). There are two options: If you file Form 1023, the fee is $600; if your nonprofit meets certain criteria, you can file Form 1023-EZ and pay only $275.
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Legal Fees
To officially form your nonprofit, you’ll likely need some help from a lawyer to make sure you’re doing everything correctly. You may be able to get by with an online legal service or you may need to hire a lawyer. In some cases, lawyers will reduce or waive their fees to assist a nonprofit.
Legal consultation and professional services for drafting bylaws or business plans can add from $500 to $2,000 or more in startup costs.
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Office Space and Equipment/Supplies
Unless you can operate your nonprofit out of your home, you’ll need to rent an office and pay monthly rent, utilities, and internet fees. Whether you work from your home or a rented space, you’ll need to account for any equipment or office supplies you’ll need, including computers/laptops and some type of fundraising software.
Employees
Unless you plan to run the nonprofit on your own, you’ll likely need to hire some staff. Staff workers may be part-time, full-time, or freelance. What their roles will be and how many employees you’ll need will depend on the size and type of nonprofit you’re forming. You’ll also want to budget a salary for yourself.
Marketing
To achieve your goals, you’ll need to get the word out about your nonprofit. A strong marketing program can help advocate for your mission, as well as attract donors and volunteers. Marketing costs may include a website, blog, newsletter, and social media. You may be able to do some of these things yourself; other projects will likely require hiring outside help, such as a website designer.
Ongoing Compliance Costs
As a nonprofit, you’ll need to meet federal compliance requirements, as well as any state or local requirements that may apply. If you’re getting funding from a grant, there may also be compliance obligations attached to that. Additionally, there may be annual filing requirements, both federal and state/local, and, depending on your organization, you may have other obligations as well. Fees for compliance experts may range anywhere from $1,000 to $5,000 or more annually.
How Much Does It Cost to Start a Nonprofit in Each State?
Once you’ve developed your nonprofit idea, written your mission statement, and assembled your board, you’ll need to establish your nonprofit as a business in your state. Your state may have rules about naming your organization and/or a site where you can search online to make sure the name you want hasn’t been taken already. You may be able to reserve and/or register a name by paying a fee, which can run from nothing to $25 or more.
The next step is to register your nonprofit by filing your articles of incorporation. Fees and required forms to do this will depend on what state you plan to operate in. Here’s a look at fees for nonprofit articles of incorporation for each state.
| State | Nonprofit Articles of Incorporation Fee |
|---|---|
| Alabama | $100 + minimum $50 county fee |
| Alaska | $50 |
| Arizona | $10 |
| Arkansas | $45 online; $50 paper application |
| California | $30 + $20 statement of information |
| Colorado | $50 |
| Connecticut | $165 + $50 first report fee |
| Delaware | $89 |
| Florida | $70 |
| Georgia | $100 + $40 notice of registration + $50 initial registration |
| Hawaii | $26 |
| Idaho | $30 |
| Illinois | $50 |
| Indiana | $30 |
| Iowa | $20 |
| Kansas | $20 |
| Kentucky | $8 |
| Louisiana | $75 |
| Maine | $40 |
| Maryland | $226.60 |
| Massachusetts | $35 |
| Michigan | $20 |
| Minnesota | $90 online; $70 by mail |
| Mississippi | $50 |
| Missouri | $25 |
| Montana | $20 |
| Nebraska | $10 |
| Nevada | $50 + initial list filing fee |
| New Hampshire | $30 |
| New Jersey | $75 |
| New Mexico | $25 |
| New York | $75 |
| North Carolina | $60 |
| North Dakota | $40 |
| Ohio | $99 |
| Oklahoma | $25 |
| Oregon | $50 |
| Pennsylvania | $125 |
| Rhode Island | $35 |
| South Carolina | $25 |
| South Dakota | $30 |
| Tennessee | $100 |
| Texas | $25 |
| Utah | $30 |
| Vermont | $125 |
| Virginia | $75 |
| Washington | $40-$80 |
| Washington, D.C. | $80 |
| West Virginia | $25 |
| Wisconsin | $35 |
| Wyoming | $25 |
How to Fund Your Nonprofit Startup Costs
Once you have an idea of how much money you will need to start your nonprofit, your next question will likely be — where can I get it? The good news is that there are several different funding options for nonprofits at all stages. Here are a few you may want to consider.
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Grants
When you’re launching a new nonprofit, a startup grant can provide the funds you need to rent office space, hire employees, market your nonprofit, and initiate programs. Grants for new nonprofits are offered by grant-giving foundations, local and state governments, and corporations. You might start your search at Grants.gov.
Small Business Loans
While small business loans are generally associated with for-profit businesses, nonprofit businesses can also sometimes qualify for different nonprofit small business loans.
If you have strong personal credit and your startup nonprofit is already generating revenue, you might try applying for a loan or small business line of credit through your local bank or credit union (if they lend to nonprofits).
Otherwise, you could consider exploring alternative business loan options, which are typically offered by online lenders.
Recommended: How to Apply for a Small Business Loan
Crowdfunding
There are many different types of crowdfunding, but the type nonprofits typically use is the donation-based crowdfunding model. This involves asking large numbers of people to donate small amounts of money, typically via an online crowdfunding platform. You can launch a crowdfunding campaign to raise startup funds for your nonprofit or to fund a specific program within your organization.
Fundraisers
Fundraisers are often the primary means a nonprofit uses to generate revenue. You may choose to do a mix of virtual and in-person charity events, such as a walk-a-thon, gala dinner, concert, trivia night, or online auction. Note that in many states you may need to register for charitable solicitation before engaging in fundraising activities.
The Takeaway
How much it costs to start a nonprofit isn’t a cut-and-dried matter. Total startup costs will depend on your state’s filing fees, whether you need to fill out a Form 1023 or 1023-EZ with the IRS, and what type of office, equipment, and staff you’ll need to launch and operate your nonprofit.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What are the startup costs for nonprofits?
If you look at how much it costs to start a nonprofit organization, you’ll notice that the main initial costs are filing and administrative fees. Once your organization is registered, you’ll encounter other costs, such as office space, supplies/equipment, staff, and marketing.
What is needed to start a nonprofit organization?
If you’re creating a nonprofit, you’ll need a mission statement and business plan, a board of directors, and an employer identification number (EIN). You’ll have to register articles of incorporation as a nonprofit in your state and file for tax-exempt status with the Internal Revenue Service (IRS).
What expenses do nonprofits have?
Nonprofits typically have expenses such as salaries and wages, program costs, office supplies, rent, utilities, and marketing. They may also incur costs for fundraising activities, administrative overhead, insurance, and legal services.
How long does it take to create a nonprofit?
Creating a nonprofit can take anywhere from a few months to a year, depending on the size and extent of the organization and its anticipated activities, your resources, and the time you have to devote to it.
Can I start a nonprofit with no money?
If you don’t have money and are wondering how much it costs to start a nonprofit organization, there’s good news. You may be able to start a nonprofit with very little money – but there are fees involved in registering your organization and some legal and professional services you may need to get set up. You may be able to save money if you can start with a lawyer willing to donate their services and if you can run the organization single-handedly from home.
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