Starting a nonprofit in Iowa can offer untold opportunities to positively impact your community. This guide is designed to walk you through each step, from naming your organization to filing for tax-exempt status and beyond. Following these steps can lay a strong foundation for your nonprofit’s success and fulfill your mission to serve others.
Looking to start a nonprofit in Iowa? Whether your cause is an animal shelter, food bank, museum, or something else entirely, nonprofits can foster civic engagement, drive economic growth, and strengthen communities.
Starting a new nonprofit is a huge step. This comprehensive guide will walk you through the process and help you begin the process of starting a nonprofit in the state of Iowa.
Are you ready to get started? This step-by-step process ensures you meet all legal requirements and build a strong organization. We also offer a downloadable checklist to follow when forming your nonprofit!
Iowa does not have many rules for choosing a name for your nonprofit. The only issue may be finding one that hasn’t already been chosen – search for available names here.
If you’re having difficulty finding the right name, check out our nonprofit naming checklist.
Choosing a mission for your organization can be just as challenging as choosing a name. 501(c)(3) nonprofit organizations must benefit the public with one of the following purposes:
Your organization’s mission statement will have one of these purposes: share what issue you hope to address, who you will help, and how. Choosing your mission before filing to start a nonprofit makes the process easier because your organization’s purpose must be the same on all documentation.
The next step may seem unnecessary, but a business plan gives you a roadmap to follow for your first three to five years. Business plans can be used to:
Your nonprofit’s business plan will include the following sections.
A detailed plan for your nonprofit’s programs and services will help you visualize what your nonprofit can be before it starts. List the products, programs, and services you’ll provide and how they’ll affect your community. Provide enough information to paint a picture, and include images and infographics to help explain complicated details.
Your marketing plan is essential to understand your beneficiaries and donors better. This plan will describe your target markets, competitors, and any potential partners. It will also help you outline a plan to reach these primary audiences.
An operational plan describes how your nonprofit plans to serve your beneficiaries. Your operational plan should give an overview of your organization’s day-to-day activities. It will also delve deeper into your partnerships and the necessary legal requirements and insurance you may need.
When describing your operations, you must explain the necessary people and roles. An organizational chart can help you explain how these roles fit together.
Pro tip: If you have an organizational chart, you can include it in the appendix to help illustrate how your organization operates. Learn more about the six types of nonprofit organizational charts and see them in action in this free e-book.
An impact plan can be equally as important as your organization’s financials. Foundations and donors will give to your organization based on the impact you’ll have. In the beginning, the effect you plan to have on your community will be the most significant appeal to these funders.
Since you don’t have any financial reports of your own, you can do a little research to find out how your competitors raise and spend their money. In this section, create a financial plan to show how fundraising activities can help fund your operations.
The executive summary is the first thing your funders will read. This section should explain your organization’s mission, detail your target market, and explain how you can meet the needs of your community.
When writing your executive summary, you must customize this section to match your reader.
Your business plan’s appendix is where you can share additional information,, such as your IRS determination letter, board member resumes, and marketing pieces.
Incorporators must sign the Articles of Incorporation for your nonprofit. You need at least one incorporator but can have more.
Your board of directors is the governing leadership of your nonprofit organization. Iowa requires nonprofits to have at least one director on the board. Nonprofits that apply for tax-exempt status with the Internal Revenue Service must have at least three, but it is essential to have enough directors to help run your organization and raise funds.
There is no residency or membership requirement in the state of Iowa. Board member terms are one year, and committees must have a minimum of two directors.
Registered agents receive legal notices for the nonprofit organization. Your registered agent can be an individual or company, but companies must be located in Iowa and hold regular business hours.
Iowa nonprofits must file articles of incorporation with the Iowa Secretary of State. The fee to file is $20, and organizations can file online or by mail. Organizations must include the following when filing this document:
After filing your articles of incorporation, you must file for an employer identification number with the Internal Revenue Service (IRS). You can file Form SS-4 immediately online or by mail. Corporations will receive a certificate of acknowledgment from the secretary of state’s office.
Nonprofits must hold their first board meeting before filing for tax-exempt status with the IRS. This board meeting is an opportunity to elect your officers, assign board members to committees, and start onboarding and training.
After electing your nonprofit’s board members, you must create and approve your organization’s bylaws. Your nonprofit’s bylaws provide a map for your organization’s leadership team to follow and must include the following:
Finally, you must also approve your organization’s conflict of interest policy, which provides rules to follow when individuals in leadership have conflicting priorities.
After your first board meeting, you can apply for tax-exempt status with the IRS. Most nonprofits will apply as 501(c)(3) organizations and file either Form 1023-EZ or Form 1023.
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 are membership organizations and must use Form 1024 and pay $600 to file for tax-exempt status with the IRS.
Any nonprofits that receive tax exemption from the IRS are exempt from paying state taxes in Iowa. These organizations only have to file state tax returns if they have unrelated business income.
Nonprofits in Iowa, however, are not automatically exempt from paying sales taxes on goods and services, even if exempt from federal and state taxes. They must pay sales tax like other for-profit organizations, even when purchasing items across state lines. Exemptions are made for private nonprofit schools, religious organizations, and charitable organizations that purchase purpose-driven items.
Iowa does not require nonprofits to register before soliciting donations, but professional fundraisers and charitable trusts must register with the state’s attorney general.
Iowa nonprofits must register with Iowa’s Department of Inspections, Appeals & Licensing before hosting charitable raffles or bingo events. All applications must be received at least thirty days before the campaign begins.
The license type depends on the time needed for the campaign. The fee ranges from $15 to $150.
Applications must be printed, mailed, or dropped off at the department’s location or emailed.
All Iowa nonprofits must file a report with the secretary of state every other year (on odd years). This report must include the nonprofit’s primary office address, the nonprofit’s registered agent’s address, and whether the nonprofit has members.
Nonprofits can also use their annual reports to solicit gifts from foundations and donors. You can share your organization’s annual report on your website, social media platforms, and third-party websites like Guidestar.
After completing the necessary steps outlined in this guide, you’re ready to make a difference in the lives of others and raise funds.
As you continue to build a successful nonprofit, it’s essential to seek support from fellow nonprofit leaders, mentors, and community members who share your passion. With determination and strategic planning, your nonprofit can thrive and contribute to a brighter future for Iowa and beyond.
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