The gem state got its name because it’s home to nearly every type of gemstone in the United States, but the real jewels are the state’s nonprofits. More than 10,000 active tax-exempt organizations reflect the state’s commitment to making an impact on society. If you’re considering starting a nonprofit in Idaho, this comprehensive guide will walk you through the steps.
There are 10,106 active tax-exempt nonprofit organizations in Idaho. With a population of 1.901 million, that means one nonprofit for every 188 people. This shows how powerful the nonprofit field is in the state! It should also assure you that you’re on the right path.
This article offers a step-by-step guide to making starting a nonprofit in Idaho more accessible. As you follow each step, collect and store documents in a safe location for the future.
Are you ready to get started? Great! Starting a nonprofit is best when handled by a team. To make this process easier and more successful, form your nonprofit board in the beginning and ensure that all members have a job before tackling these steps.
Nonprofit names in Idaho must include one of these terms: corporation, incorporated, company, limited, Corp., Inc., Co., or Ltd. If your business is a professional entity, you can choose the words chartered, professional association, professional corporation, P.A., P.C., or CHTD. Also note that, if your name does include the word ‘company’ or its abbreviation, it cannot include the word or symbol for “and.”
Don’t get stuck: With these restrictions and requirements, you may have a difficult time finding a name you like. Download our nonprofit naming checklist to help you get started.
Your nonprofit mission statement describes your organization’s purpose. In the simplest terms, it should share why you exist, who you can help, and how you can help them. It’s best to decide on a mission statement at the start of your organization so you can use it on federal and state documents that ask for your nonprofit’s purpose.
Check out these great mission statement examples for some inspiration. For help writing your statement, download our free Mission & Vision Statements Worksheet.
After choosing a name and mission statement, it’s time to create a business plan that will serve as a roadmap for your organization. A business plan can also introduce your new nonprofit to potential funders and solicit start-up funds.
Start with your executive summary to share your nonprofit’s mission and purpose and provide a market analysis of your organization’s primary donors and beneficiaries. This section should also detail what needs you plan to address in the community and how you will meet those needs.
The executive summary is the last thing readers will see, but it’s helpful if it’s the first thing you write!
Your nonprofit will have programs and services to meet the needs of your community. When writing a business plan, you’ll want to provide as many details as possible that show how these programs will help you fulfill your mission. You should also share images and infographics to explain complex problems or solutions.
Your marketing plan will describe your organization’s ideal donor and beneficiary. Use market research to develop a picture of this individual, including their:
Be sure to also include how you plan to reach these ideal donors and beneficiaries with information about your nonprofit to encourage donations and sign-ups.
Your operational plan must include your primary location and legal requirements. When sharing your organization’s government and structure, be sure to include an organizational chart.
This section is your chance to share how your organization can make a difference with potential funders. Be as detailed as possible and use statistics whenever possible.
As a new nonprofit, you won’t have financial statements to share in your business plan yet. Instead, you’ll want to research other similar organizations to see how they raise and spend money. Create a list of potential fundraising streams to give to funders when applying for startup funds.
This section must include a list of board members along with pictures and resumes. You can also add marketing and educational materials for your nonprofit and upcoming events.
An Incorporator must sign the articles of Incorporation for your nonprofit. You must have one Incorporator, but you can have more.
Idaho nonprofits must have a minimum of three board directors. There is no residency requirement. The Internal Revenue Service (IRS) also requires nonprofits to have at least three directors to apply for tax-exempt status. They recommend you have more to ensure your organization can run complex operations and fundraising activities.
Board member terms are one to five years. Nonprofits must have a president, secretary, and treasurer appointed by the board. Except for the president and secretary, these roles can be held by the same person. All board committees must have a minimum of two directors.
Idaho has different rules for religious organizations. Churches and other religious nonprofits must have at least one board director and do not need any officers.
A registered agent receives all legal notifications for the organization. Registered agents can be individuals or businesses. If it’s a business, it must be located in Idaho and have regular business hours.
Idaho nonprofits can file their articles of incorporation online for $30. You can expect to receive notification within one week, but there is a $20 expedited fee to receive it in one business day.
You can also file your Idaho articles of incorporation through the mail for $50 ($30 filing fee + $20 manual processing fee).
To file your articles of incorporation, you will need:
If you plan to apply for tax-exempt status with the IRS, you must include a purpose clause and provision for the dissolution of assets. The wording for these additions can be found here.
All organizations must apply for an employer identification number (EIN) with the IRS before applying for tax-exempt status, paying taxes, hiring staff, or filing state business licenses and permits. There is no filing fee. File online and receive your EIN immediately. If filing by phone, fax, or mail, expect it to take up to five weeks.
You must also hold your nonprofit’s first board meeting and elect board directors and officers before applying for tax-exempt status with the IRS. During this meeting, you’ll also want to approve a resolution to open a bank account and assign board members to committees.
Before your first board meeting, you must create your organization’s bylaws and conflict of interest policy. These documents must be voted on and approved before applying for tax-exempt status.
Your organization’s bylaws must include the following:
The IRS rewards 501(c)(3) federal tax exemption for organizations with the following purposes:
Churches do not have to file for tax exemption with the IRS, but many do so to increase their authority and trustworthiness.
Nonprofits that earn under $50,000 for the first three years can file Form 1023-EZ for $275. There is an eligibility worksheet to determine if your organization qualifies. All other nonprofits must file Form 1023 and pay $600. It can take up to six months to receive your determination letter from the IRS.
Most other nonprofits must file Form 1024 for tax exemption.
Nonprofits with tax-exempt IRS status are automatically exempt from paying state income tax in Idaho. If your organization plans to make retail sales, you must register for a seller’s permit. Nonprofits expecting to hire staff must also open an Idaho withholding account.
Register online or fill out this PDF and mail it.
While nonprofits are not required to register with the state of Idaho before soliciting donations, they must register with the attorney general ten days before any telephone solicitation.
Idaho nonprofits planning a raffle or other charitable game must register with the state lottery. A non-refundable $100 fee is charged for the first raffle license. You must make checks payable to the Idaho State Lottery.
All Idaho nonprofits must file an annual report to remain in good standing with the state. This is also an opportunity to spread the word about your organization’s mission and raise funds. Check out these tips to create a compelling annual report.
Did you know? Nonprofits can use annual reports to apply for grant funding and appeal to donors. Check out this article for tips on how to share your organization’s impact and raise more funds.
Starting a nonprofit in Idaho is a journey of passion, dedication, and community impact. The steps outlined in this guide will help you through this complicated process.
Remember to build a solid team to help you with each step. When faced with unexpected challenges, seek support from your nonprofit board and community.
When you’re ready to get started, check out this list of affordable features from Donorbox for an idea of how we can help you fulfill your mission through a suite of innovative fundraising tools.
Learn more about Donorbox on our website and check out The Nonprofit Blog for more fundraising tips, how-to guides, and actionable advice.
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor