How to Start a Charity or Foundation: Step by Step

Have a mission in mind but you’re not sure how to create a 501c3? We’ve created a free nonprofit startup checklist for anyone looking to start making a difference ASAP. At Charitable Allies, our nonprofit attorneys have helped over 600 nonprofit organizations across the country with getting their 501c3 status. If you’d like our legal team to complete the paperwork for you, packages that include what you need to get a nonprofit started start at $1550. Not quite ready to take the plunge? Read the checklist below to see what you need to prepare! Or find the downloadable PDF version below.

What kind of organization is your nonprofit startup?

Public Charity

The majority of 501c3 organizations fall into this category including humane societies, social services, youth programs, and more! If you’re looking for how to start a charity, you’ve come to the right place!

Church or Place of Worship

This category includes churches, temples, mosques and other places of worship that have religious history, regular congregations, and a recognized creed. These are different than ministries.

Private Foundation

These organizations are typically funded by a single or a small pool of individuals and include corporate foundations, family foundations, and more. Keep in mind, some grant-making organizations are public charities and some are private foundations. If you’re not sure which classification is right for your nonprofit startup, reach out to our team for assistance.

Social Welfare Groups

501c4 social welfare organizations are nonprofits that are more politically active through activities like lobbying for certain candidates or public policies. Donations to 501c4s are not tax deductible.

Business Leagues, Social Clubs, and Other

Organizations in this category are tax-exempt, but are not 501c3 or 501c4 organizations. They range from 501c5 (labor and agriculture organizations) to 501c13 cemetery organizations. We can still assist most tax-exempt organizations in their setup, regardless of if they are 501c3 organizations or not.

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Schedule a consultation with our legal team today! When you’re wondering how to create a 501c3 or other type of nonprofit, we’ll walk you through the process, timeline and cost.

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Who (or what) will you serve?

A charitable class is a group of people (or another defined group, i.e. endangered animals or a historical site) that the IRS considers eligible to receive services and is large enough that aiding them provides benefit for the larger community. You’ll need to serve a charitable class that is not too specific (like serving one particular family), but not so broad that it can’t be easily defined.

How will you help?

You need to have a way of providing help to your target group. What type of services will you provide and how will you provide them? For most nonprofit startups, you should focus on providing 1 or 2 programs to start. Don’t worry, if you have more than one program idea in mind, your organization can always provide more charitable services as you grow. As long as you’re still serving your charitable mission, you’re welcome to add more ways to serve.

Do you have a board?

All nonprofits must have a board. No one can go it alone! You’ll need at least three board members including yourself, most of whom are not related to one another by blood or marriage. If you’re curious about what kind of people you might want on your first board, we have an article covering that topic here.

How much will it cost to provide your programs?

It's important to understand what resources you'll need to carry out your programs. To start a nonprofit, plan for several startup costs including the IRS fee to file for tax exempt status, which ranges from $275 to $600. If you'd like our help starting a nonprofit, our startup packages start at $1550. You’ll also need to think about any costs to running your program like supplies, hiring staff, or renting or buying space.

How will your charitable program be funded?

Developing and maintaining a source of income is a critical component of starting a nonprofit. The old adage is no money, no mission. Most nonprofits are funded in a variety of ways, by a variety of people and organizations. Will you collect program service revenue? Will you apply for grants or hold fundraising events? Will you pursue government funding? There are tons of possibilities, but it’s wise to go into the process with a plan in place.

Can you maintain and upkeep an organization?

Starting a nonprofit is more than just learning how to create a 501c3 initially. Filing, reporting, and record-keeping are essential administrative tasks that maintain the nonprofit. For example, you'll need to file a 990 with the IRS each year containing financial details about your nonprofit in order to keep your tax exempt status active. Many states also require you to register to fundraise and keep that status active with a filing each year. Keeping a calendar with all the due dates and tasks needed can be helpful for people tracking basic nonprofit startup compliance.

Nonprofit Startup Checklist

How to Start a Charity: What to Prepare

Need help with your nonprofit startup?

Schedule a consultation with our legal team, we can help streamline the process! When we talk with people about how to start a charity, we walk through the costs, timeline and steps.

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