How to Start a Nonprofit in Delaware

Introduction

Do you have a cause that you would love to see the world become more aware and engaged with? Maybe it’s animal rights, or human rights, or environmental justice. Whatever it is, Delaware has laws that can help you start your own nonprofit corporation.

Choose a Name for your Nonprofit

While choosing a name for your nonprofit, keep the following points in mind.

• Choose a name that describes your mission.

The first thing people need to know about you is what you do, so make sure the title of your organization makes it clear. This can be tricky with acronyms or abbreviations, but if you need to use one, try using “the” in front of it (for example, “The National Association for Advanced Life Support”). Don’t forget to check that this name isn’t already being used by another business—you don’t want someone else claiming rights to it!

• Choose a name that’s easy to spell and pronounce.

You might be tempted not to worry too much about this since most people won’t actually have contact with your organization beyond donating money through its website, but trust us—people will have questions. And when they search Google for answers, they’ll look at the first result that comes up. This means if their eyes start bleeding because they have no idea how to pronounce something like “Futility Foundation” then there’s very little chance they’ll stick around long enough to learn more about what you do.

File the Articles of Incorporation

To start a nonprofit in Delaware, you will need to file the articles of incorporation. The articles are the first step in establishing your organization as a legal entity. They will include details such as your organization’s name, address, and purpose.

You’ll need to designate at least one incorporator who will sign off on all documents related to running your nonprofit (including contracts and tax forms).

Establish a Board of Directors

You must establish a board of directors. The board will serve as the managing body of your organization and oversee its operations, finances, and policies. A minimum of three people must be on the board. However, most organizations have five to seven members. The articles will state what you can and cannot do with regard to setting up your nonprofit’s board. It is important that you follow these guidelines closely because if you don’t it could result in fines or suspension from doing business in Delaware. For example:

• You cannot have anyone under the age of 18 serving on the board
• There must be at least one member who lives outside of New Castle County

Apply for Tax-exemption Status

The next step to starting a nonprofit is to apply for tax exemption status. There are several different types of tax exemptions you can apply for, and each has its own set of qualifications and requirements. The most common types of nonprofits are 501(c)(3), 501(c)(4), 501(c)(5) and 501(c)(6) organizations.

A 501(c)(3) is a charitable organization that must operate exclusively for educational purposes or scientific research, with no part of its earnings benefiting any private shareholder or individual. You cannot start a non-religious school if you’re a non-profit organization–and technically, neither can religious schools if they operate as non-profits–but other than that restriction on your mission statement, there aren’t any restrictions on what type of work your organization does or who it serves as long as it doesn’t violate the law (e.g., it can’t discriminate against race or gender).

File the Required Annual Report

The annual report is a legal requirement for every nonprofit. It contains basic information about your nonprofit and its activities, including:

• The names, addresses, and occupations of all board members.
• A narrative summary of the organization’s mission, services, programs and accomplishments during the most recent fiscal year.
• A copy of the IRS Form 990 or 990-EZ that was filed in accordance with section 6033(a) or 6034(a) by December 31st (or if applicable an extension request).

Takeaway

Starting a nonprofit in Delaware is a great way to leverage your skills and interests to do good in the world. If you are passionate about your cause and want to make a difference, pursuing nonprofit status is a great way to get started.

Conclusion

We hope that this post has helped you understand how to start a nonprofit in Delaware. If you have any questions, do not hesitate to contact us at our office or through our website.