One of the most asked questions about starting a nonprofit is how much it costs. Unfortunately, giving a single amount—or even a range—is difficult because the costs can vary greatly by organization and state.
To help you develop an estimate for your specific organization, we will outline the required costs—such as for filing fees—and the additional operational costs you may potentially need to factor in.
Keep in mind that foundations and other grantmakers do not give grants for start-up or filing fees. The money to pay for these initial costs will typically come from the nonprofit’s founders, board members, volunteers, community members, or other interested parties.
Every nonprofit organization must be registered to operate at the state level. State fees typically include filing fees for:
- Articles of incorporation
- Charitable registration
- Business registration
- Miscellaneous fees (such as for sales tax permits, annual registration fees, gambling license, name registration, and others)
Again, these fees vary by state. To find out the fees in your state, visit our Nonprofit Startup Resources, click on your state in the map, and refer to our state-specific Start-up Guides. We particularly recommend the state start-up guides from Harbor Compliance, which list state-specific filing requirements and their costs.
IRS costs (tax-exempt application)
To be recognized as a 501(c)(3) tax-exempt organization, you must file an exemption application with the IRS. Organizations have two application options:
- Form 1023 - $600
- Form 1023EZ - $275
These costs were as of 2022.
Charitable solicitation registration costs
Most states require that nonprofits that solicit donations from their residents be registered with the state before seeking donations. This applies for any type of fundraising: in person, online, or by mail.
At a minimum you will probably want to be registered in the state your nonprofit is in but if you have a “Donate Now” button on your website—and theoretically accept donations from anyone across the country—you may look in to whether you will need to register in additional states.
Some people fill out all of the state and IRS forms themselves, but it is recommended to consult with an attorney to help you with the initial incorporation process. Legal costs can vary greatly so get estimates for this cost.
If you need free or low-cost legal assistance, learn more: Where can I find "pro bono" tax or legal assistance for my nonprofit?
Other operational costs
Aside from the required state and IRS filings, your nonprofit may have additional costs for day-to-day and operational needs, such as for:
- Office space
- Accounting services
- Website & marketing costs
- Program costs
Be sure to factor in any of these types of operational needs into your business plan so you can get an accurate budget.
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