Starting a nonprofit in Indiana means you’re ready to use your passion and dedication to create a meaningful impact on your community. This comprehensive guide will walk you through the essential steps from defining your mission to navigating legal requirements. Let’s dive in and lay the groundwork for your nonprofit journey!
Congratulations! You are about to join the other 42,777 nonprofits in Indiana that make a meaningful contribution to their communities and the state as a whole.
In this article, we’ll explain the steps to starting a nonprofit in Indiana and provide a solid foundation for your organization, giving you the tools you need to succeed!
Are you ready to get started? Great! As you work your way through the following step-by-step guide, you may wonder why you’re spending time building your board and creating a business plan before filing any paperwork with the state or federal government. But these initial steps will help make starting a nonprofit in Indiana easier and set you on the right path when fundraising for your organization.
Let’s start with your nonprofit’s name. Indiana requires that all corporation names include the words corporation, incorporated, company, or limited or the abbreviations for Corp., Inc., Co., or Ltd. Organizations must also ensure the name they’ve chosen is available.
While that can make choosing a name seem simple, you may need more time to come up with a name than you think. If you’re struggling to find the perfect name, our nonprofit naming checklist can help!
After your name, choosing your organization’s mission is a crucial step. A nonprofit must have a purpose that serves the public. Your mission statement will tell the world about the problem you plan to address, who you will help, and how.
Coming up with your organization’s mission statement before filing any paperwork can make the process easier. The Internal Revenue Service (IRS) and the state of Indiana require you to share your nonprofit’s purpose. These statements must be the same on all documentation, or you could lose your tax-exempt status.
Creating a business plan for your nonprofit is equally important as your organization’s name and mission statement. A business plan helps you define your organization’s purpose, messaging, and strategic goals.
A nonprofit business plan is an excellent tool for your board of directors and staff and a requirement for appealing for startup funding.
This is the best place to start when creating a plan for your nonprofit. You’ve likely already worked it out in your head, but it’s important to put your programs and services on paper for all to see.
This section allows you to explain how these programs can address major problems in your community and help beneficiaries. Ensure you share as much information and details as possible, including images and infographics, to paint a clear picture.
This section is meant to provide a detailed analysis of your target audience, competitors, beneficiaries, and donors. From here, your marketing plan should detail your organization’s events, campaigns, and other activities. You must be as specific as possible when describing these initiatives.
Your operational plan gives an overview of your organization’s day-to-day operations. You’ll include how you work with partners and suppliers, legal requirements, and necessary licenses and insurance.
If you have an organizational chart, include it here to share essential people and roles within your organization.
Your nonprofit’s impact plan should show how your organization will affect your community. You must specify how your organization’s programs and services will make a difference. You’ll want to spend time perfecting this section since it will be the primary reason behind any funding you receive initially.
As a new nonprofit, you won’t have the accounting details to support your financial plan. You can research similar nonprofits to learn how your competition finds and spends its money.
Your financial plan must also include a fundraising plan, startup costs, and plans for using potential surplus funds.
The executive summary is the first thing readers see but is typically the last thing you write. This section gives an overview of what you’ve already provided. It should share your nonprofit’s mission and summarize the marketing, operational, and financial plans.
You can include any additional documents to promote your organization in this section. Examples of this include:
You can use your business plan to solicit potential board members. Indiana nonprofits must have a minimum of three board directors. The IRS also requires three board members to gain tax exemption but recommends more to run operations or raise funds sufficiently.
Indiana has no residency or membership requirement. Board director terms must be one to five years, and committees must have at least one director.
Nonprofits must also have at least one officer to prepare meeting minutes. Most organizations have a president, vice president, treasurer, and secretary. The same individual can hold two or more offices.
When finding board members, it’s important to remember that skills can be taught, but passion cannot. With the right training and onboarding material, your board can become a powerful leadership team and play a meaningful role in your organization and the community.
Registered agents receive legal notices on behalf of the nonprofit organization. Your registered agent can be an individual or company. Companies must be located in the state of Indiana and hold regular business hours.
Nonprofits can file articles of incorporation at Indiana’s INBiz website for $30. You can expect to receive approval within 15 minutes when filing online.
Nonprofits can file the articles in person or by mail for $50, but it can take up to seven days to receive a response.
Before filing your articles of incorporation, make sure you have the following information:
The first step in filing for tax exemption with the IRS is to apply for an employer identification number. You can do this immediately online by filing Form SS-4, or by mail, which will take four to six weeks.
Before filing for tax exemption with the IRS, you’ll want to hold your nonprofit’s first board meeting. During this meeting, you’ll vote on your board officers, assign each board member to committees, and start the onboarding process for all members.
Your nonprofit board must keep track of your organization’s finances. It’s the responsibility of your board treasurer to provide financial reports at all board meetings. Use your first meeting to approve the opening of a bank account to collect your nonprofit’s funds to make this process easier.
Next, you must vote on and approve your organization’s bylaws. Your bylaws are like a map for your leadership team to follow and must include the following:
You must also approve your organization’s conflict of interest policy. This policy provides rules to follow when individuals in leadership have conflicting priorities.
The IRS approves tax exemption for all 501(c)(3) organizations. These organizations must have one of the following purposes:
While churches do not have to file for tax exemption with the IRS, they may want to develop their authority and trustworthiness. Many funders look for IRS documentation and annual reports before providing financial support.
When filing for tax exemption, nonprofits have two options. 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.
501(c)(3) organizations must benefit the public. 501(c)(4) and other organizations must benefit their members. These nonprofits must use Form 1024 and pay $600 to file for tax-exempt status with the IRS.
Nonprofits that have tax-exempt status with the IRS can also file for state tax exemption with the state. File Form NP-20A through INTIME and gain access to Form NP-1, which provides documentation that you are registered as a nonprofit and are tax-exempt for businesses.
You will need a separate Form NP-1 for each vendor.
Indiana does not require you to register before soliciting donations.
If your nonprofit plans to hold raffles, bingo, or other charitable games, you must register with the Indiana Gaming Commission. Be sure to file any required documentation in advance.
Indiana nonprofits must also file a Nonprofit Organization’s Report (Form NP-20R) found in INTIME. The due date for this form is based on the last two digits of your FEIN and applies to fiscal year filers whose tax years end before August 1, 2022.
After this date, your organization and new nonprofit customers must file by May 15 every fifth year.
To maintain transparency, it’s best to create and share your annual report with supporters every year. We’ve provided annual report tips to help explain the best ways to do this.
Congratulations on completing this guide to starting a nonprofit in Indiana! Staying committed to your organization’s mission and laying out a strong foundation prepares you to make a meaningful difference in the lives of those you serve.
Visit our website to see how Donorbox can help raise funds for your new nonprofit.
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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