Are you planning on starting a nonprofit in Utah? Do you want to make changes in your community and the world? You’ve come to the right place. This article provides a step-by-step guide to help you fill out required state and federal forms, build a board, choose a name, develop a business plan, and more. Get ready to take the journey of a lifetime and enjoy the ride!
Utah is home to five national parks, the Rocky Mountains, and other natural wonders. Anyone who has visited the state will agree that it is one of the most beautiful locations in the country. Utah is also home to over 12,341 active nonprofits. These organizations care for many of the state’s natural wonders and the over three million people residing in the state. In this article, we’ll share a step-by-step guide on how to start your own nonprofit in Utah.
If you’re ready to make a difference in your community and the state of Utah, you’ve come to the right place. The following step-by-step guide will walk you through registering with the state and federal government. We’ll also provide tips on choosing a name, developing a mission statement, writing a business plan, and building a powerful board.
When choosing a name for your nonprofit, corporation names in Utah can but do not need to contain the following words and corporation:
Other than that recommendation, Utah has very few suggestions. Finding a name that shares your organization’s mission, speaks to your target market, and follows your state’s rules can take time and effort. If you’re having trouble finding a name, we’ve created a naming checklist to help. Once you’ve chosen one or two, visit this website to see if it’s available.
Choosing a mission statement for your nonprofit is as essential as selecting a name. Since your nonprofit’s purpose statement must be the same on all state and federal applications, choosing a mission statement in the beginning will make the process easier. Your mission statement also influences your organization’s marketing and culture.
The Internal Revenue Service (IRS) requires 501(c)(3) nonprofit organizations to benefit the public with one of the following purposes:
With this purpose, you have a focus, but now it’s time to create a unique mission statement for your nonprofit. A mission statement should include who you’ll help, why they need your help, and how you’ll do it. Visit our article on how to create your organization’s mission statement here.
While you’re filing the necessary paperwork to start a nonprofit, building a solid foundation and future fundraising is essential. A nonprofit business plan is one of the best ways to do this. A business plan helps you to:
Although some may consider business plans unnecessary and old-fashioned, this tool will make filing necessary state and federal paperwork easier and help you find critical startup funds.
The first section of your nonprofit business plan will lay out the organization’s programs and services. How will you fulfill your mission? What makes you different from other organizations with the same purpose? Answering these questions will have a significant impact on funders. Remember, people’s attention spans are limited, so it’s best to include images and infographics when explaining complicated ideas.
Your programs and services are critical, but you must also know your target market. Your marketing plan is where you should provide details on two types of markets: donors and beneficiaries. You’ll need information on their demographics, interests, and giving ability. Your marketing plan should include communication plans for potential donors, foundations, partners, etc.
Operational Plan
The next section will help you create your organization’s bylaws, which are required when applying for tax exemption with the IRS. Your operational plan should include day-to-day activities, necessary legal requirements, and any insurance you may need. An organizational chart will help you provide details on the roles and responsibilities of your nonprofit board and staff.
The effect your nonprofit has on your community is its greatest appeal to funders. In the beginning, your organization’s impact is entirely in your mind. It’s vital to spend time on this section of your business plan and elaborate on how your organization can reach its goals.
Typically, business plan financials will include bank statements and reports. Since you don’t have any, you’ll need to research your competitors. Visit GuideStar and research similar nonprofits’ tax documents for examples of revenues and expenses. This information will give you a solid foundation for your organization’s budgets.
Executive Summary
An Executive Summary is the first thing the funders read, but it should be the last thing you write. This section gives an overview of your business plan and describes your organization’s mission plan, target market, and how you’ll meet the needs of your community.
This section provides a space for additional documentation you may need, including:
A strong and passionate team is another necessity when starting a nonprofit. The state of Utah has a few regulations for forming this team. The first step is to choose someone to sign your articles of incorporation. This can be one or more individuals, but most nonprofits choose the founder. Choosing your board of directors is much more critical.
Utah requires a minimum of three directors on a nonprofit board. The IRS also requires three, but they recommend more to ensure an effective board to run operations and fundraising activities. Utah board members must be 18 years or older and have a one-year term limit. There are no residency or membership requirements. Board committees must include a minimum of two directors.
Nonprofit officer requirements must be defined in your organization’s bylaws or by board resolution. The same individual can hold two or more offices, but Utah requires that there must be at least one officer to prepare meeting minutes and keep and authenticate records. Board officers must also be at least 18 years old.
Pro Tip: These regulations are meant to help you get started, but there is much more to building an effective board of directors. We’ve written several articles to help you build a board and recruit more members.
All nonprofits must have a Registered Agent to receive all legal documents for the organization. An individual or a company can do this, but the company must be in Utah and hold regular business hours. Several companies offer this service.
Once you’ve built a solid foundation for your nonprofit, you can start filing state and federal applications. Utah nonprofits must file articles of incorporation online, in person, by mail, or by fax.
Before you begin, you will need the following information on hand:
After filing your articles of incorporation, you must file for an employer identification number with the 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.
Before filing for tax exemption with the IRS, you must hold your nonprofit’s first board meeting. This board meeting is an opportunity to elect your officers, assign board members to committees, and start onboarding and training. It’s also time to finalize and adopt the organization’s bylaws and conflict of interest policy and approve opening a bank account.
Your nonprofit bylaws are a roadmap for your board of directors. Nonprofit bylaws must include the following:
The IRS does not allow any board or staff member to benefit financially from an exempt nonprofit’s earnings. Your organization’s conflict of interest policy will provide rules to follow when individuals in leadership have conflicting priorities.
Nonprofits that benefit the public can apply with the IRS as 501(c)(3) organizations and file either Form 1023-EZ or Form 1023. Organizations 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 501(c)(3) nonprofits must file Form 1023 and pay $600. It can take up to six months to receive your determination letter from the IRS.
Nonprofits that primarily benefit their members may also qualify for some benefits from the IRS. These organizations must use Form 1024 and pay $600 to become 501(c)(4) organizations with the IRS.
501(c)(3) nonprofits are automatically exempt from paying income taxes in Utah. 501(c)(3) nonprofits can also file for sales tax exemption. Organizations that own or expect to own property must register with Utah County within 120 days after the property is acquired. Nonprofits must file for annual property tax renewals by March 1st.
Utah Nonprofits are not required to register before soliciting donations
Utah nonprofits must register annually with the Utah Division of Corporations & Commercial Code. Registration is due on the organization’s anniversary and can be filed online, in person, or by mail. There is a $10 filing fee and a $10 late fee.
Transparency with the government and donors is critical for the long-term success of your organization. In addition to registering with the state, Utah nonprofits should also create an annual report to provide transparency and show donors what they’re up to. Check out Donorbox’s guide to a nonprofit annual report to see how to use this tool to raise more funds for your new nonprofit.
Next Steps
Starting a nonprofit can be an exciting opportunity to make a difference in your community and change the world. After reading through our step-by-step guide, we hope you’re ready to begin this journey. As you fill out the required applications and form a solid foundation for your organization, remember you don’t have to do it alone. Building a team to help you along the way is an essential step in this process. Donorbox would love to be part of that team. Visit our website to see what we have to offer and join thousands of other nonprofits changing the world today!
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