Starting a 501(c)(3) charity takes four core steps: organize a board and governing documents, incorporate as a nonprofit in your state, get an Employer Identification Number from the IRS, and file an exemption application on Form 1023 or Form 1023-EZ. The IRS user fee is $275 for the streamlined form and $600 for the full one. Approval can come in a few weeks or take more than six months, depending on which form you file and how clean the application is.
Get Your Mission, Board, and Bylaws in Place
Write a specific mission statement before anything else. The IRS wants to see that your organization exists for one or more exempt purposes under Section 501(c)(3): religious, charitable, scientific, literary, educational, fostering amateur sports competition, or preventing cruelty to children or animals.1Office of the Law Revision Counsel. 26 U.S. Code 501 – Exemption From Tax on Corporations, Certain Trusts, Etc. “Helping the community” is not enough. Say what you’ll do, who you’ll serve, and how.
Pick a name and check availability with your state’s business filing office before you print anything.
Recruit an initial board of directors. Most states require at least three, and these people carry legal responsibility for governance and finances. The IRS asks about them on your application, and the composition of the board signals whether the organization exists to serve the public or a handful of insiders.
Draft bylaws covering how directors are elected and removed, how often the board meets, what makes a quorum, and the duties of each officer. You usually don’t file bylaws with the state, but the IRS requires a copy with your exemption application.
Adopt a conflict of interest policy before you apply. Form 1023 asks whether you have one, and the IRS calls the policy “a strategy we encourage organizations to adopt as a means to establish procedures that will offer protection against charges of impropriety involving officers, directors or trustees.”2Internal Revenue Service. Form 1023: Purpose of Conflict of Interest Policy Not having one can slow down your application. A workable policy requires directors to disclose financial interests, recuse themselves from votes where they have a conflict, and sign annual affirmations.
Designate a registered agent with a physical address in your state of incorporation who can accept legal notices during business hours.
Incorporate as a Nonprofit in Your State
Filing articles of incorporation with your Secretary of State (or equivalent office) creates the nonprofit as a legal entity. You need this before you can get an EIN or apply to the IRS.
Articles typically list the organization’s name, the registered agent, the initial directors, and the stated purpose. Two additional provisions matter more than founders often realize, because leaving them out will get your 501(c)(3) application rejected or delayed:
- A purpose clause limiting your organization’s activities to exempt purposes under Section 501(c)(3).
- A dissolution clause stating that if the organization shuts down, any remaining assets go to another 501(c)(3) or to a government entity for a public purpose.3Internal Revenue Service. Charity – Required Provisions for Organizing Documents
Some states have default dissolution language in their nonprofit statutes, but the IRS wants the clauses in your articles. Put them in explicitly.
State filing fees run from under $30 in some states to several hundred dollars in others. Once the state approves your articles, you’ll receive a certificate of incorporation.
Apply for an EIN
Get an Employer Identification Number from the IRS before you apply for exemption. Apply online at no cost. The session takes about 15 minutes and issues the EIN immediately on approval. You’ll need the Social Security number or taxpayer ID of the responsible party, and the IRS advises forming your state entity first so nothing gets held up.4Internal Revenue Service. Get an Employer Identification Number The online session can’t be saved and times out after 15 minutes of inactivity, so have your information ready before you start.
File the 501(c)(3) Application With the IRS
This filing turns your state nonprofit into a federally recognized tax-exempt charity. Section 501(c)(3) status exempts the organization from federal income tax and makes donations tax-deductible for donors.5Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations You’ll file one of two forms, both submitted electronically through Pay.gov.6Internal Revenue Service. About Form 1023, Application for Recognition of Exemption Under Section 501(c)(3)
Form 1023-EZ ($275)
The streamlined application is available to smaller organizations. You qualify if your annual gross receipts have not exceeded $50,000 in any of the past three years, you don’t project exceeding $50,000 in any of the next three years, and total assets don’t exceed $250,000.7Internal Revenue Service. Instructions for Form 1023-EZ
Form 1023 ($600)
The full application is required for any organization that doesn’t meet the 1023-EZ thresholds. It asks for narrative descriptions of your activities, financial projections, compensation arrangements, and copies of your organizing documents.8Internal Revenue Service. Form 1023 and 1023-EZ: Amount of User Fee
Both applications require a copy of your articles of incorporation, bylaws, and your EIN.
How Long Approval Takes
As of early 2026, 80% of Form 1023-EZ determinations were issued within 22 days. The full Form 1023 is much slower, with 80% of determinations issued within about 191 days.9Internal Revenue Service. Where’s My Application for Tax-Exempt Status If the IRS needs more information, it will contact you, and delays in your response push the timeline further. A complete, well-organized application is your best defense against back-and-forth.
If the IRS returns your application as substantially incomplete, it returns your user fee too. You’d have to fix the issues and resubmit with a new payment. An adverse determination can be protested within 30 days.
Public Charity or Private Foundation?
Every 501(c)(3) is classified as either a public charity or a private foundation. The IRS presumes your organization is a private foundation unless you demonstrate otherwise, and you make that case inside your exemption application.10Office of the Law Revision Counsel. 26 USC 509 – Private Foundation Defined
Most new charities want public charity status. Public charities face fewer regulatory restrictions, and donors can deduct larger contributions: cash gifts to a public charity are deductible up to 60% of the donor’s adjusted gross income, versus 30% for gifts to most private foundations.11Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts That difference directly affects fundraising.
To qualify as a public charity, your organization generally needs more than one-third of its total support from the general public, government grants, or other public charities. Churches, schools, and hospitals qualify automatically. If your charity will be funded primarily by one donor or a single family, expect private foundation status, which brings rules on minimum distributions, self-dealing, and excise taxes on investment income.
What You Give Up: Political and Lobbying Limits
Before you commit to this status, know two hard constraints that come with it.
A 501(c)(3) organization cannot participate or intervene in any political campaign for or against a candidate for public office. That includes endorsements, campaign contributions, statements favoring or opposing candidates, and distributing campaign literature.12Internal Revenue Service. Frequently Asked Questions About the Ban on Political Campaign Intervention by 501(c)(3) Organizations: Overview It’s an absolute prohibition, not a spending limit.
Lobbying is treated differently. A 501(c)(3) may lobby, but lobbying cannot be a “substantial part” of the organization’s activities. Many charities make the 501(h) election, which swaps the fuzzy “substantial part” standard for concrete dollar limits tied to the organization’s exempt-purpose spending, with an excise tax on excess expenditures.13Office of the Law Revision Counsel. 26 USC 4911 – Tax on Excess Lobbying Expenditures
Register to Fundraise in Each State
Federal exemption doesn’t give you the right to solicit donations everywhere. Roughly 40 states have charitable solicitation laws requiring registration before you ask residents for contributions.14Internal Revenue Service. 15Internal Revenue Service. Form 990 Series Filing Requirements for Exempt Organizations
- Form 990-N (e-Postcard) for organizations with gross receipts normally $50,000 or less.
- Form 990-EZ for organizations with gross receipts under $200,000 and total assets under $500,000.
- Form 990 for organizations at or above $200,000 in gross receipts, or $500,000 in total assets.
Miss the filing three years in a row and your tax-exempt status is automatically revoked. There’s no grace period beyond what the statute provides.16Office of the Law Revision Counsel. 26 USC 6033 – Returns by Exempt Organizations The IRS sends a notice after two consecutive misses, but small organizations miss that too. Once you’re on the published revocation list, donors lose the ability to deduct contributions to you.17Internal Revenue Service. Automatic Revocation of Exemption
Beyond federal filings, most states require annual reports from nonprofit corporations, and states where you’ve registered to fundraise expect annual renewals with updated financials. These deadlines don’t always align with your federal dates, so track them separately. Keep detailed financial records, board meeting minutes, and copies of all organizational documents. Those records protect your exemption if the IRS or a state regulator asks questions, and they protect the board by showing directors met their governance duties.