Starting a nonprofit in Wisconsin can get confusing. There are several steps you need to take, plus forms your organization must file with the State and the IRS before soliciting donations. This article will walk you through the process, help ensure you follow all rules and regulations, and show you how best to form and promote your organization.
Starting a nonprofit can be time-consuming and may feel overwhelming. The process is also different in each U.S. state. Wisconsin has several steps to take and forms to fill out to establish a nonprofit organization. In this article, we’ll show you how to start a nonprofit in Wisconsin with steps we hope will make the process easier.
Ready to start your nonprofit in Wisconsin? You’ll be joining more than 40,000 organizations across the state! These nonprofits have varied missions and serve various fields, from education and healthcare to various religious organizations, and beyond.
No matter the mission you aim to take on, there are 12 crucial steps you need to take before launching your own nonprofit in Wisconsin.
As you work your way through the process, you may come up with questions and need further information. We’ve written several additional articles to help you choose which type of nonprofit to form, build your own board of directors, find start-up grants, and more.
Let’s get started!
The first step in starting a nonprofit in Wisconsin (or, really, anywhere) is naming it! Choosing a nonprofit name can be fun – with some creativity, you can come up with a compelling name that will interest people and make them want to learn more about your organization.
Before making it legal, be sure to visit Wisconsin’s Department of Financial Institutions (DFI) website to search for your name and check its availability. Note that Wisconsin nonprofit organization names must include one of these words: corporation, incorporated, company, limited, or abbreviations for corp., inc., co., or ltd.
Pro tip: Your nonprofit’s name will play a critical role in the brand and reputation of the organization, so be sure it appropriately reflects your mission. Use this Naming & Branding Worksheet to kickstart your naming process and keep reading to learn more about establishing your mission.
As a nonprofit, your organization is required to provide a service that benefits the public. This purpose is the reason you exist and will help you promote your organization’s programs and raise funds from donors and foundations. Crafting a compelling mission statement is a must when it comes to communicating your purpose to the public.
Finalizing your mission statement early will also help simplify the process of starting a nonprofit. The state of Wisconsin and the IRS require you to include your organization’s purpose when filing forms. Because this purpose must be the same on all forms you file, it’s best to just use your mission statement!
Need help writing your own mission statement? Use this free worksheet to guide you.
Nonprofits need to have incorporators and directors to start and run efficiently.
In Wisconsin, nonprofits must assign at least one incorporator to sign the organization’s Articles of Incorporation. Nonprofits must also have at least three members on their board of directors – and the roles of president, secretary, and treasurer must all be filled. Wisconsin does not have a residency or membership requirement, but each member must serve at least a one-year term.
The Internal Revenue Service (IRS), however, recommends that nonprofits have additional board members to cover all responsibilities, including governing, planning, and promoting the organization to the community.
Pro tip: Forming your board of directors is an essential early step when starting a nonprofit. It’s best to start on the right foot when building your board and onboarding your members to ensure the health of your organization.
A registered agent is responsible for receiving legal notices for the nonprofit organization. They must reside in the state and can be either an individual or a company. If they’re a business, they must be open during regular business hours.
Now that you have your leadership team, you can file your nonprofit’s Articles of Incorporation. You can file online or by mail for $35. Be sure to file Form 102 for non-stock corporations.
When filing, you must include the name and address of your registered agent and each incorporator. It’s also required that you list the address of your organization’s principal office, but this does not have to be located in Wisconsin.
On a separate page, you must also include:
Every organization must have an Employer Identification Number (EIN). This nine-digit number is essential to apply for tax-exempt status with the IRS, open a bank account, and file taxes. You must also have an EIN to hire staff or contractors.
Once you’ve formed your organization’s board of directors, you’ll want to hold your first board meeting as soon as possible. During this meeting, there are several details that must be finalized and tasks to complete, including:
Your bylaws are the official governing document for your organization and will cover your organization’s purpose, the number of board members, roles and elections, your organization’s accounting period, and more.
The IRS provides recommendations for this document in Form 1023. It ensures you do not have any conflicts of interest that could affect your board members’ ability to serve your nonprofit.
Wisconsin requires you to have a president, secretary, and treasurer. You can have one individual hold more than one of these roles, but it is best to spread the responsibilities around to get the most out of your board and limit burnout.
Not all nonprofits will have membership programs, but it is an excellent way to collect recurring gifts that your organization can depend on. When deciding on a membership program, your board must discuss eligibility, dues, rights of members, and termination.
Your board must meet regularly to oversee the organization’s governance and vote on strategic plans and budgets. During your first board meeting, and in your organization’s bylaws, determine how and when your board will meet. You must have a quorum to vote on the budget and other resolutions, so make sure all board members are aware of the importance of regular attendance.
Establishing a separate bank account is crucial for running a nonprofit; online fundraising tools require a nonprofit bank account to collect funds. Before you end your first board meeting, your members must approve a resolution to open a bank account.
Corporations, limited liability companies (LLCs), and unincorporated associations and trusts can apply for tax-exempt status with the Internal Revenue Service (IRS). Eligible nonprofits can gain this status using Form 1023 or Form 1023-EZ. Complete the eligibility worksheet to determine which form to use.
Applying for IRS exempt status costs $600 for Form 1023 and $275 for Form 1023-EZ. It can take one month to receive a letter of determination if you file Form 1023-EZ, but it can take up to six months when filing Form 1023.
501(c)(3) nonprofits, churches, school districts, American Indian tribes, and Wisconsin government units qualify for Wisconsin’s Certificate of Exempt Status (CES) number and can make purchases exempt from state taxes.
Nonprofits must register with the Wisconsin Department of Revenue after receiving their EIN. You can register online and receive your permit/certificate within seven to ten days. The original registration fee is $20 for a two-year period, and renewal fees are $10.
Nonprofits with paid employees and/or those who expect to receive $25,000 or more in donations (not including raffle income, government grants, or membership fees) each year must file Form 296 to register with the Department of Financial Institutions. A $15 non-refundable fee is required.
Charitable organizations that do not solicit donations in Wisconsin, churches, veterans’ organizations, and others do not have to register. Visit the website to see if you are exempt.
Pro tip: You’ll also want to begin looking for a way to solicit donations so that you’re ready to fundraise as soon as possible. Check out our list of fundraising software solutions to get started!
Some nonprofits may have to file additional business licenses and permits. For example, those who wish to run a raffle or bingo game must file with the state.
All Wisconsin nonprofits must file annual financial reports within 12 months of the end of their fiscal year. Organizations that receive $25,000 or less can file Form 1943. Those who file IRS Form 990 must file Form 1952. If your organization does not qualify for either form, you can use Form 308.
Wisconsin requires nonprofits to submit a reviewed or audited financial statement that follows GAAP principles and is independently certified by a public accountant. There is no fee to file an annual financial report.
Pro tip: Produce annual reports for your supporters that include financial statements as well as beneficiary stories, impact data, and more to boost transparency and showcase what you have accomplished. Listen to this episode of The Nonprofit Podcast to learn how to create effective and impactful annual reports for your new nonprofit.
Starting a nonprofit in Wisconsin requires a thorough and systematic process. Gaining 501(c) status with the state and the IRS is pivotal to obtaining tax benefits and soliciting financial support from donors, corporations, and foundations. In addition to the required state and federal forms, choosing a compelling name, determining your organization’s mission, and building your board can take time.
The process may seem intimidating, but you don’t have to do it alone. When possible, solicit help from board members and other nonprofit leaders in your community who know how to start a nonprofit in Wisconsin.
We’ve written several additional articles to help as you begin your nonprofit journey. Read these blogs for more tips and resources to get you started.
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