Congratulations, you’re ready to take the first steps towards building an organization that will benefit your community and contribute to your field!
Starting a nonprofit in NY is a rewarding experience, but working through the legal requirements can be confusing and overwhelming. We want to help you understand your state and federal regulations, what forms you need to fill out and in what order, and how you can start a nonprofit organization in NY smoothly and effectively.
In this 16 step guide, we will show you how to obtain NY agency approval, prepare your Articles of Incorporation, get your EIN, and apply for 501(c) status. This will allow you to start growing your nonprofit, accept donations and apply for grants, and claim your tax-exempt status. Here, we’ll answer some of your most pressing questions – let’s go!
You may already have a great name selected for your organization, but there are a few rules you should be aware of. First, you must follow these naming guidelines outlined by NY:
If your name includes characters or symbols, you should also review the IRS’ guidelines.
Pro tip: An online search of your name to see what else might come up, and confirming that it’s an available social media handle and domain name are additional useful steps.
Once you have a name that you’re happy with and meets these requirements, you can hold the name for up to 60 days by reserving it with NYS. You do this by filing an Application for Reservation of Name, which can only be sent by mail with a $10 fee.
At this point, you’ll need to confirm what your nonprofit corporation structure is going to be. NYS defines nonprofit corporations as two basic structures: religious and non-religious.
If your nonprofit’s purpose is to allow members to meet for divine worship or religious observations, then you can file as religious. Every other purpose must be filed as non-religious, and as Type A, B, C, or D. If your organization falls into multiple types, you will file as the latter type; meaning if you’re both Type A and B, you will file as Type B, etc. The Types are classified as:
If you have any questions or confusion over terms or designations, you can review section 102.
Next, you’ll need to build your inaugural Board of Directors, which is the governing body of your organization. You’ll want to bring together a group of people with diverse experiences and viewpoints who can speak to your field, the work you’re looking to do, and the community you’re serving.
In NY you need at least three directors over eighteen (the IRS has the same requirement). There is no residency or membership requirement, and they can serve a term of one to five years. Each committee needs at least three directors.
The incorporator is the person who will sign and deliver your nonprofit’s Articles (or Certificate) of Incorporation. This is a short-term role and can be filled by anyone, it can even be more than one person.
There are also a few state guidelines for appointing a registered agent, which is the person or service responsible for accepting legal documents on your organization’s behalf. For NYS, this means they must be located in NY and operate within normal business hours.
NY requires that certain businesses obtain the approval of the state agency that matches the purpose of their organization. You will need to reach out to the corresponding agency for your nonprofit type; obtain written consent from them for starting your business; then attach this consent to your Certificate of Incorporation when it’s filed.
Here are a few business types and their corresponding agencies:
Each state has its own requirement for filing your Articles of Incorporation in addition to the IRS requirements required for filing for 501(c) tax exemption (outlined in Step #13). The language has to match across your forms; the IRS requirements need to be submitted with your original Articles of Incorporation, so it’s important to confirm if there are any additional requirements outlined by the IRS that aren’t required by your state.
You will need to include
The filing will take about fourteen business days, but you can expedite it to within twenty-four hours for an additional $25; same day for $75; within two hours of receipt for $150.
Initial reports are an outline of the initial state of your business upon formation. This usually includes your business address, the name and information of your registered agent and initial directors, and your business purpose.
While several states require you to file an initial report after filing your Articles of Incorporation, this is not required by NYS.
Employer Identification Numbers (EIN) are nine-digit numbers assigned to organizations by the IRS. Similar to an individual’s social security number, they are unique identifiers used for tax purposes and opening bank accounts.
You can obtain one for free by applying online, by phone or fax, or by mailing in a filled-out Form SS-4. The online application needs to be completed in one session and you will receive your EIN immediately.
A faxed application will take four business days and mail will take four to five weeks.
Organization is an important part of a well-run nonprofit. If you haven’t already, now is a great time to build a filing and storage system.
As you continue to build and legalize your nonprofit, you’ll gather several important documents that you will need to reference later on.
First, find a safe place to store things like your EIN, Certificate of Incorporation, copies of all forms you’ve filed, and meeting agendas and notes; then design and stick with a clear organizational system that will allow you to easily find when you need them.
Your initial governing documents and policies include your conflict-of-interest policy and your nonprofit bylaws.
A conflict-of-interest policy is meant to regulate key members of your organization, like your directors. It should outline what you and these members need to do if a conflict of interest arises that would prevent them from putting your organization first while doing their job there.
Nonprofit bylaws, on the other hand, outline how your organization will be governed; and should encourage accountability to your community and mission, while following NYS laws.
You should include an outline of your nonprofit’s purpose, meeting requirements, and board regulations, among other things. Check out our article on how to draft nonprofit bylaws to get started.
From here, you should hold your inaugural meeting of the Board of Directors to go over your governing documents and policies, and to designate officers. NYS requires you to appoint a President, at least one Vice-President, a Secretary, and a Treasurer. Each will have a one-year term. The same person can fill multiple offices, as long as they aren’t the President or Secretary.
You’ll need to confirm your bylaws and conflict of interest policy at this meeting in order to apply for federal tax-exempt status; you should also discuss a company bank account and important accounting decisions like your tax year. You’ll want to have a plan and take detailed notes; so be sure to send an agenda before the meeting and assign someone to take notes.
NYS doesn’t offer a consolidated state tax registration application, so you’ll need to identify and register for any individual tax accounts that are relevant to your organization and submit them to the NYS Department of Taxation and Finance. If you’ll be conducting business in NYC, you’ll also need to register for city taxes with the City of NY Finance Commissioner
Review the NYS Tax Guide for New Businesses to confirm what tax accounts you’ll need to register for.
As a nonprofit, you’ll be able to get federal tax exemption, which will save you money and will help with applying for grants and sponsorships.
You’ll need to apply for 501(c) status with the IRS to get this exemption, which you can do by filling out Form 1023-EZ, Form 1023, or Form 1024; it depends on your eligibility:
You’ll also need to submit your Certificate of Incorporation, which must include your organization’s purpose (review acceptable purposes), restrictions on activities and distribution of assets in case of dissolution, and limitations on distributions.
When the IRS approves your application, they’ll send you a Determination Letter recognizing your exemption.
The IRS fully outlines the different statuses and filing requirements, but given the difficulty and importance of this part of the process, it’s worth considering working with a specialist.
Once you’ve filed for federal tax exemption, you should also look into NYS tax exemptions. You can file with the NYS Department of Taxation and Finance for exemption from:
None of these forms have a filing fee.
If you plan on soliciting and accepting charitable donations, you’ll need to register with the NYS Attorney General (Charities Bureau).
If you’ll be soliciting donations outside of NYS, you should review the other state’s requirements and register if required. But inside of NYS, any charitable and nonprofit corporations must register.
Your initial registration can be online, has a $25 fee, and will take about two to three months. You’ll need the signature of your President and CFO (or Treasurer) and the Attorney General’s provided checklist for any forms or attachments.
If your charitable organization will receive less than $25,000 and you don’t use a professional fundraiser; or it’s a religious, educational, or membership organization, PTA, government agency, hospital, skilled nursing facility, treatment center, volunteer firefighter, or ambulance service, historical society, or appeals for individuals; you can register a one-time exemption form online.
Once your initial registration is complete, you’ll need to file annually four and a half months after the end of your fiscal year. You will need your Form 990, unredacted Form 990 Schedule B, fundraising contacts, and some will need their audited financials. This can cost $0-$1500, depending on your net worth.
If you made more than $250,000 in gross revenue and support in a year, you’ll need to file annual financial reports. This costs $25 and you should file them four and a half months after the end of your fiscal year.
But if you’re a 501(c)(3) charity that made an in-kind donation of over $10,000 to a 501(c)(4) during a reporting period; or a 501(c)(4) charity that spent over $10,000 on covered communications; you’ll also need to file an annual financial report within thirty days of the close of each applicable reporting period.
Pro tip: Soliciting and accepting donations can be smoother and more effective by allowing donors to give online. Tools like Donorbox help you get started with online fundraising. With customizable donation forms that easily embed into your website, we can help you meet your campaign goals and stay organized.
Since there are a lot of potential licenses and permits you’ll need to apply for in NYS, you should review New York’s Business Express site.
You can search by business type and locality to see what may be relevant to your needs. You can also call your local county/city/town/village clerk to ask about local requirements.
You’ve filed your state and federal forms, are tax-exempt, and have your initial board. You’re all set to start growing your nonprofit organization and helping out your local, state, or even national community!
You’re in a great spot to start building your social media presence, digital content, brand identity, and audience. Use what you’ve already put together, like your policies and Board of Directors. A mission statement can grow from your bylaws since you’ve already outlined your organization’s principles and standards of accountability. Your initial Board can help you grow your audience and select key staff members as you grow in size.
A strong fundraising campaign and donation strategy are also important next steps.
We’re here to help you grow and create an impact with effective tools and features. Check out our Nonprofit Blog for useful articles, tips, and resources.
In this section, we’ll help you by answering some common questions associated with starting a nonprofit in NY.
NYS’ Corporation and Business Entity Database have a complete list of all names currently being used.
You should conduct a search with the name that you would like to use. Select “all” under name type, and “contains” under search type to confirm that your name is neither the same as, nor too similar to an existing corporation.
You can also submit a written request to the Department of State (Division of Corporations) asking for the availability of your name. There is a fee of $5 per name search request.
“Backer” and “cover sheet” are similar terms for the sheet of information that must be submitted with any forms you are filing.
They have to include the name of the document you are submitting, the corresponding statute that requires this filing, your name and address (or that of the filer).
You will receive a filing receipt or rejection letter to this address. If the forms are preprinted, the backer should be on the last page.
Once you file your Certificate of Incorporation, the Department of State sends a filing receipt to the Incorporator’s listed address.
This receipt will include the date you filed, the name of your organization, a snapshot of the information in the certificate, and an outline of the fees paid.
Confirm that all the included information is correct, as this is your proof of filing. Keep it in a safe place with your other records, too, since you can’t get another copy.
To get copies of any documents you filed with the Division of Corporations, you’ll need to submit a written request to the NYS Department of State (Division of Corporations).
The request should include your organization’s name, your DOS ID number or the exact date of formation/authorization, the document(s) you’re requesting, whether you want a plain or certified copy, and the address you want the copies mailed to. Plain copies cost $5, certified copies cost $10.