How to Start a Nonprofit in New Hampshire
Introduction
Starting a nonprofit in New Hampshire can be challenging, but it’s a great way to give back to the community!
New Hampshire is home to thousands of nonprofits working on everything from breast cancer research and animal welfare, to education and poverty relief. Nonprofits play an important role in our state by helping people who need it most. But if you’re thinking about starting your own nonprofit, there are steps you’ll need to take before you’re officially ready for business—and they don’t all happen overnight!
Know the steps to take.
The process of starting a nonprofit in New Hampshire generally follows these steps:
- Make sure that your proposed mission fits under one of the 501(c)(3) IRS tax-exempt classifications.
- Apply for tax-exempt status using Form 1023. This form must be filed with the IRS.
- If you have any assets, such as cash or property, make sure those assets are properly transferred to the new organization because they may not be transferable later on if they’re not properly transferred now.
Understand your purpose.
Once you’ve established your nonprofit’s purpose and mission, it’s time to start building a team. The members of this team will be some of the most important people in the organization, so it’s important to choose them wisely.
Research your competition.
Research your competition. In order to determine if there is a need for your organization, you will want to research the organizations that already exist in New Hampshire. First, compare your nonprofit with others that are similar in size and focus. You can use this information to help guide you as you set up your own mission statement and goals/objectives. The larger budgets of other nonprofits may also be useful when determining how much money would be needed for operations and programs.
Come up with a business plan.
If you’re serious about starting a nonprofit, it’s important to have a plan. Your business plan should include:
- A mission statement that describes what your organization will do, why it exists and who its customers are.
- Goals and objectives that spell out in detail how these services will be delivered.
- An analysis of the market for your proposed services, including an assessment of competition and potential funding sources.
- Financial projections detailing costs and revenue over one or more years (depending on the industry). This information can help you determine whether it makes sense to pursue the venture at all. It also serves as an ongoing tool for monitoring progress toward achieving goals and objectives while developing strategies for growth when appropriate.
- A management plan outlining how employees will be recruited and trained; how they’ll work together under a central direction; how tasks will be assigned so as not to waste time on unnecessary ones; etc.. This part also includes details about record-keeping practices so that everyone knows what’s being done where the money comes from where expenses go (etc.).
Reserve your nonprofit’s name.
Before you begin the process of incorporating, you must reserve your nonprofit’s name. The names of nonprofit organizations cannot be identical to those of other New Hampshire organizations.
You can check this by visiting the Secretary of State’s website, which has a database searchable by name, city, or type of entity (including nonprofits). The IRS also requires that your organization is able to distinguish itself from other groups with similar names.
In addition to reserving your organization’s name, it’s important to perform due diligence and make sure that there are no legal issues associated with it. You should:
- Check the entity status with state government offices such as the secretary of state and attorney general’s office;
- Check for any potential trademark issues; and
- Ensure that there isn’t an existing company registered in New Hampshire under this same business name.
Solicit directors and find an agent.
Once you’ve got a solid idea of what you want to do, it’s time to get your team together. In order to start a nonprofit organization in New Hampshire, you need two things:
- Directors—people who are interested in the cause and able to devote at least 15 hours per month toward its mission. These directors will help with the day-to-day business and fundraising work of running your organization.
- An agent—someone who can help navigate all of the paperwork involved with filing for 501(c)(3) status as well as other legal necessities such as drafting bylaws, finding office space and setting up bank accounts and tax ID numbers.
Incorporate your business.
One of the first steps to starting a nonprofit is to incorporate your business. Incorporation is a legal process that creates a separate legal entity (often called a corporation), giving it its own set of rights, duties, and liabilities. This new entity can then independently enter into contracts, sue or be sued in court, and otherwise act as an independent party on behalf of its members.
A corporation may be incorporated either by filing articles with the secretary of state or by filing articles with the IRS in order to obtain federal tax-exempt status for your organization under Section 501(c)(3) of the Internal Revenue Code (IRC). The choice between these two types of corporations depends entirely on what type of organization you want your nonprofit to be: If you plan on applying for federal tax exemption under IRC Section 50l(c)(3), then you must incorporate federally through IRS Form 1023; however, if not incorporating federally through IRC Section 511(c)(4), then you’ll need only file articles with your state’s secretary of state office pursuant to N.H.’s Uniform Commercial Code (UCC) Article 7A-1 et seq.
Develop bylaws and file articles of incorporation.
- Develop bylaws and file articles of incorporation.
- Form your board of directors and have them sign the nonprofit’s bylaws.
- File a certificate of organization with the secretary of state, using the articles of incorporation as proof that you are a legal entity in New Hampshire.
Secure tax-exempt status.
Once you’ve determined that your organization is eligible for tax-exempt status and have decided on an appropriate name, it’s time to apply.
You can find out more about applying for 501(c)(3) nonprofit status online. The application process typically involves filling out Form 1023 (the application for tax-exempt status), submitting copies of any required documents, paying initial fees and annual renewal fees, and waiting roughly a year or two while the IRS reviews your application. After this period has passed, you’ll receive a letter telling you whether or not your request was approved (and if so, granting approval). If granted approval by the IRS, then congratulations—your nonprofit is now officially recognized as tax-exempt!
Starting a nonprofit in New Hampshire can be challenging, but it’s a great way to give back to the community!
Starting a nonprofit in New Hampshire can be challenging, but it’s a great way to give back to the community! There are many steps to starting a nonprofit, and each one takes time and effort. Before you begin this process, make sure that your passion is strong enough to carry through all of these steps. You’ll need to:
- Decide what type of organization you want to create (nonprofit or charitable), if your focus will be on education or health care, etc.
- Find an attorney who specializes in nonprofits or even small businesses because they have more experience with these types of organizations than lawyers who specialize in other industries like bank acquisitions or real estate transactions; this has been found useful when trying times occur later down the road where legal advice may be needed urgently without notice from anyone else present at any given moment during business hours (i.e., weekends).
Conclusion
The process to start a nonprofit in New Hampshire can be daunting, but it’s worth it! The state offers many resources for new nonprofits and provides the forms necessary for incorporation within a few days. The hardest part is probably getting your board members together, but once you have that completed, the rest will fall into place.
