Welcome to our step-by-step guide on how to start a nonprofit in Oregon! Once you identify a niche need in your community or field and decide to take steps to make a lasting impact, we know that you’ll want to get started as soon as possible. In this article, you’ll learn how to grow your…
Welcome to our step-by-step guide on how to start a nonprofit in Oregon! Once you identify a niche need in your community or field and decide to take steps to make a lasting impact, we know that you’ll want to get started as soon as possible. In this article, you’ll learn how to grow your initial team, file your Articles of Incorporation, apply for tax exemptions, and begin fundraising.
With your unique vision, you’re already on your way to helping others and making a lasting difference. We’re here to help you remain compliant with local, state, and federal laws and regulations. With this 14-step guide, we break down all the necessary steps and explain efficient and easy ways to get them done.
Choosing the name of your nonprofit is a necessary first step. It will help you clarify your mission and branding, and is also how most people will meet and recognize your organization.
You should start by confirming that the name you want to use is available. Oregon requires that individual corporation names be “distinguishable” from all other names being used or doing business in the state. Search the official business registry database to see if any other businesses are already using a name similar to the one you want.
A few other rules to keep in mind are:
You should also review the IRS guidelines on characters or symbols, as they will affect your EIN application.
Pro tip: Make sure the name you choose is available as a domain name and social media handle to limit confusion and strengthen your brand. Consider buying your domain name and claiming your handle before filing.
Incorporators and Directors are an important part of your organization, but they’re also a requirement for filing with the state of Oregon and the federal government. You’ll have to start building your team early on, but they will also bring important experiences and perspectives to the start-up process.
Your incorporator is the person(s) who signs and delivers your Articles of Incorporation. It is a short-term role that can be filled by one or more people, and can also be you.
Directors are the people who make up the governing body of your nonprofit. If you’re a public benefit corporation, Oregon requires you to have at least three directors. You only need one if you’re a mutual benefit or religious organization. There are no residency or membership requirements, but there is a term limit of five years.
You’ll also need to comply with the IRS requirements, since their rules come into play when you apply for 501(c) status, and your forms must match. The IRS requires a minimum of three Directors over 18 years old.
Given the key role of Directors, we recommend seeking out a group of people with diverse experiences and skills. They should be able to help you raise funds, connect with your community, and address genuine needs through your mission. You can find some amazing insights and tips on finding your board members in our article here.
A registered agent is another necessary and important part of starting your nonprofit. It is the person or service responsible for accepting legal documents on your organization’s behalf.
This can be an individual or a service, but in Oregon, your registered agent must be located in the state and have an office that is open during regular business hours.
Pro tip: Don’t list yourself as the registered agent. Not only do you have to be in the office during all business hours to accept legal documents (meaning you can’t leave for outside meetings), the address is also listed in the public record and can receive a lot of junk mail.
Filing your nonprofit’s Articles of Incorporation marks the legal creation of your organization. It must include your organization’s name and location, as well as other important details, and it must be signed and delivered by your Incorporator(s).
Oregon outlines the full requirements for filing Articles of Incorporation and instructions on their site, but you’ll need to include:
You can file your Articles of incorporation online, by mail, or by fax. You file online through the Oregon Business Registry, which has an instant turnaround time. If you file by mail or fax, you’ll need to submit physical Articles of Incorporation, and you’ll hear back in 7 to 10 business days for the former, and 1 to 2 for the latter. There is a $50 agency fee regardless of your submission method.
Pro tip: Be careful to review how to apply for 501(c) status before submitting since the IRS has its own set of requirements and the language will need to match on both submissions.
While you need to file an initial report after incorporating it in many states, this is not required by Oregon. You will, however, need to file annual reports to stay compliant.
An Employer Identification Number (EIN) is a unique, nine-digit number assigned to organizations by the IRS. It’s like a social security number for organizations and is necessary to open a company bank account, pursue tax exemption, and allow donors to receive tax benefits. You’ll need to get your EIN before you can apply for 501(c) status.
You can apply for an EIN for free online, by phone or fax, or by mailing in a filled-out Form SS-4. If you file online, be aware that you must complete it in one session. You’ll get your number immediately. If you fax or mail the application, you can expect to hear back in 4 business days for the former, or 4 to 5 weeks for the latter.
If you haven’t taken this step already, now is the time to do so. A well-run nonprofit must have an effective and understandable organizational system in order to run smoothly.
As you continue to submit new forms, receive account numbers and identifiers, and draft critical documents, you’ll need to be able to keep them somewhere that is both safe and handy. This will make your next steps easier and faster and will help you remain compliant for years to come.
While you might start off with a relatively small team, you’ll still want to make sure the system is structured and can easily grow in scope. As your nonprofit and employee base grows, you’ll want something that everyone can use and understand.
Before you can apply for 501(c) status with the IRS, you’ll need to draft and approve your nonprofit bylaws and conflict-of-interest policy since you have to submit them with your application.
Bylaws are the roadmap for how your nonprofit will be run, in addition to your Articles of Incorporation. You’ll want to include your mission, meeting requirements, and board structure, among other things, and be transparent and accountable to your community. If you’re unsure of where to begin, we have some tips and tricks outlined in our article here.
A conflict-of-interest policy is an important way to monitor the behavior of the key stakeholders in your organization, like Directors. They should not be personally benefiting from their role, nor prioritizing the interests of themselves or another organization while making decisions on your organization’s behalf.
We recommend drafting these documents in advance of your initial Board of Directors meeting so they can be discussed and approved then.
The inaugural meeting of your Board of Directors is another important and necessary step. Here, you’ll discuss and approve your nonprofit bylaws, conflict of interest policy, general operating structure, and elect officers. You should also discuss ratifications, like opening a company bank account.
In Oregon, an organization must have a President, Treasurer, and Secretary. They can be a member of the Board, and the same person can’t simultaneously be one of those three officers. You can elect additional officers as you need them, and in those roles, the same person can hold more than one position.
At this meeting, you’ll also need to elect one of the officers to take minutes at all the following meetings and authenticate records of the corporation. The agendas and meeting minutes should be stored somewhere safe and easily accessible.
Now, you’ll need to identify all the individual tax accounts, licenses, and permits you may need to legally run your nonprofit. Because Oregon doesn’t have a consolidated application for registering for all state taxes, you’ll have to apply individually and submit it to the Department of Revenue. You can also find any necessary forms on Oregon’s forms and publications library.
If you’re planning on having employees, you’ll need to register with the Secretary of State’s Corporation Division for payroll taxes. If you’ll be engaging in lobbying or political activities, you’ll be subject to a proxy tax. More information on these and other potential taxes is outlined on Oregon’s website.
If you find that you have to pay corporate excise tax (if, for example, you have unrelated business taxable income), then you should review Oregon’s Department of Revenue site. Most nonprofits are exempt from this tax once they receive 501(c) status, but there are exceptions.
You’re finally ready to file for 501(c) federal tax exemption. This will save you money on business-related expenses and will be necessary when you start applying for grants and seeking sponsorships.
If you’re unsure about whether your nonprofit is eligible, check out our article on how you can start a 501c3 nonprofit.
In order to file as a 501(c) organization, you need to apply with the IRS by filling out one of these forms:
All of these forms also require you to include your Articles of Incorporation. And remember to take your time, this is one of the more tedious steps. Also, the IRS estimates it takes the average applicant 100 hours to complete.
Once your application letter is approved by the IRS, you’ll receive a determination letter recognizing your exemption. If it’s not approved, they send a letter of explanation.
Pro tip: While the IRS outlines the different statuses and filing requirements, you should consider working with a specialist. This is an important and difficult part of the process, and even small errors can cause delays and confusion.
If you’ve received a federal tax exemption from the IRS, you don’t have to file for Oregon state tax exemption. Once you have your determination letter in hand, you’re automatically exempt from Oregon’s corporation excise and income tax.
There are two notable exceptions: if you’re running a not-for-profit home for the 1) elderly or 2) a people’s utility district, you’ll need to apply for tax exemption in Oregon.
You also won’t need to file for state sales tax exemption because Oregon doesn’t currently charge sales tax at the state level. You can check with your local assessor to see if you might be exempt from property tax, as well.
In Oregon, you’ll need to register for charitable solicitation annually in order to fundraise and ask for donations in the state. If you plan to fundraise in other states, you may need to register there as well.
You’ll register through the Oregon Department of Justice (DOJ) unless you’re eligible for exemption. If you’re a religious organization where people worship, a mutual benefit nonprofit, or an educational institution without Oregon property that only solicits alumni, you can apply for exemption by writing a letter to the DOJ explaining why you’re eligible. You’ll also need supporting documents.
All other organizations will have to file a Form RF-C and submit it via email or mail. The addresses are listed at the top of the form and there is no fee for this. You can expect to hear back in 4 to 6 weeks. In addition to information on your nonprofit and officer signatures, you’ll need to attach:
After your initial registration, you’ll need to file an annual report by submitting a Form CT-12 within 4 and a half months after the end of your organization’s fiscal year. You can submit this report and pay fees through Oregon’s online portal, or you can mail the physical form. This will cost between $10-$200, depending on your revenue and you’ll need to include your IRS form 990 as well as the list of your officers and directors.
Pro tip: professional services like Donorbox are easy ways to solicit and organize donations. Our customizable donation forms easily embed into websites, and with company matching options and goal meters, you can bring your campaign to the next level. Check out our article on why nonprofits choose Donorbox over PayPal for more information on why this might be the right choice for you.
Depending on your purpose and activities, you might need to register for additional business licenses and permits. These requirements vary from state to state; also, they change within the localities of each state. Hence, it’s worth reviewing resources like the Small Business Administration Business License and Permit Lookup Tool, where you can search by locality and business type.
Oregon also provides resources you can review, outlining potential state and local requirements, and offering a license directory search tool.
Congratulations! You’re now well on your way to starting your nonprofit and making a difference in your community. This process may feel daunting at first, but with dedication and perseverance, you can successfully found a nonprofit in Oregon.
Don’t forget, we’re here to help you. Visit our nonprofit blog for tips and resources, our YouTube channel for easy-to-follow videos, and check out our donation tools, today.
Good luck turning your vision into reality!
In this section, we’ll answer some commonly asked questions on how to start a nonprofit in Oregon, to help you further along the way!
The final cost of starting a nonprofit in Oregon can vary, depending on the forms you’re eligible to file. It costs $50 to incorporate in the state, then filing for 501(c) status costs either $275 or $600, depending on the form.
So, starting a nonprofit in Oregon can cost between $325 and $650.
The exact timeline for starting a nonprofit in Oregon is hard to predict and will vary with each individual. For the legal documents, you can expect certain turn-around times. Once you file your Articles of Incorporation, you’ll hear back instantly if you file online, in 1-2 days if you fax the form, or in 7-10 days if you mail it. Your EIN will be immediate if applied online, or it will take 4 business days if faxed, and 4-5 weeks if mailed. When you apply for 501(c) status, form 1023-EZ takes 1 month and forms 1023 and 1024 take 3-6 months.
So, your forms can take anywhere from 1 month to 7 ½ months.
If your organization is a mutual benefit corporation or religious and you’re not planning to apply for 501(c) status, you only need one board member. If your organization is a public benefit corporation or you’ll be applying for 501(c) status with the IRS, you’ll need at least three board members.
To learn about a nonprofit’s tax status, you can visit the IRS website where they have useful information, tools, and resources for nonprofits. You can also review the different types of 501(c) nonprofits and their eligibility requirements, learn about charitable contributions, understand the lifecycle of an exempt organization, and hear what to do if your exempt status is revoked.
In order to dissolve a nonprofit, you’ll have to submit Articles of Dissolution to the Office of the Secretary of State. They provide instructions for the form, that are worth reviewing. If you’re a religious organization or public benefit corporation, you’ll also have to give the Oregon Attorney General written notice before filing Articles of Dissolution.
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Sarah Simpson
