How to Start a Nonprofit in North Carolina

Introduction

Starting a nonprofit organization is not as difficult as you might think. In fact, it’s not that much different from starting any other company. However, there are some things to keep in mind if you want to make sure your new nonprofit is compliant with state law and federal tax regulations. To help you get started on the right track, here are 10 steps that will help ensure your non-profit corporation meets all legal requirements and starts off on the right foot:

Decide on a name and check to see if it’s available.

Your organization’s name should be easy to spell, pronounce, and remember. It should also have no negative connotations (like “tiger” or “diamond”).

Once you’ve chosen your name, check it on the internet to see if it is already being used. The state and federal governments also maintain lists of available names that they allow organizations to use. You can use these free databases by searching online.

File your Articles of Incorporation for your nonprofit corporation.

As you’re forming your nonprofit corporation, the first step is to file your Articles of Incorporation. The Articles of Incorporation are a legal document that establishes your corporation by naming its name and purpose, defining who can invest in it, setting out voting rights and appointing directors. When creating your Articles of Incorporation you’ll need to include certain information:

• The name of the nonprofit corporation
• The purpose for which it was created
• Its principal business address (not necessarily its mailing address)
• The names and addresses of all incorporators

Draft and adopt bylaws for your organization.

A nonprofit’s bylaws are the rules that govern how your organization operates, including everything from how to hold meetings to what kinds of positions exist within the organization. While there are many different types of bylaws, they all serve the same purpose: to make sure everyone involved with your nonprofit is on the same page when it comes to how things work.

Bylaws should be written in plain English so that anyone can understand them, as well as updated regularly—and distributed to all board members and volunteers so everyone has access to them.

Register with the IRS.

Once your nonprofit corporation has been approved by the NC Secretary of State, you must also register with the IRS. This is a requirement of federal tax law and failure to do so may result in audit, fines and penalties.

Registering with the IRS is an easy process that should be completed within 27 months of incorporation. You can register online with their EZ-Brief application form or download Form 1024, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

Recruit qualified board members.

You’ll need a board of directors to help you manage the nonprofit. Your board members should be able to provide guidance and expertise, as well as contribute financially. They can also contribute time in the form of serving on committees or helping with fundraising events.

Be sure to recruit new board members who are willing to help out with recruitment: Many people are interested in starting nonprofits but won’t take the plunge without a little encouragement from trusted friends and family who have already been through it themselves.

Set up your accounting system and get a tax ID number.

• Setting up an accounting system
• Getting a tax ID number
• Creating a compliance checklist for the state of North Carolina and federal tax law

Prepare to fundraise.

• Prepare to fundraise. Before you start a nonprofit, it’s important that you have a fundraising plan in place. You will need to know how much money you need to raise, and how you will spend those funds. The more detailed your organization’s budget is, the easier it will be for donors to understand what they’re donating toward.
• Understand the types of fundraising activities available and which ones will work best for your cause. There are many different ways that nonprofits can raise money: through direct mail campaigns or telemarketing calls; by hosting events such as bake sales or silent auctions; by asking employees at large companies for donations from their paychecks through payroll deduction programs (known as “offering letters”); and more! Some nonprofits focus on just one type of activity while others try several different approaches until they find one that works best for them. It’s important to note that each type of activity has its own legal requirements: For example, if someone donates $50 via check mailed directly from their bank account then this counts as an individual contribution which means there may be limits placed on how much money can be collected this way every year depending upon what tax status granted

Get insurance including liability, professional liability, workers’ compensation and directors and officers insurance if necessary.

You’ll need the following types of insurance:

• Liability insurance. This type of policy protects you from lawsuits resulting from accidents that happen during your nonprofit’s activities, such as an injury caused by a slip-and-fall in the office. Liability protection is extremely important for nonprofits because it can ensure that you have enough money to pay any judgments or settlements without having to close your doors.
• Professional liability insurance (also known as errors and omissions insurance). This type of coverage protects against claims made against you by clients, customers and other third parties relating to services provided under your entity’s name after the date when professional services were rendered (this date is called an “elimination period”).
• Workers’ compensation insurance. This policy covers medical costs related to injuries sustained while employees are performing their duties at work, regardless of fault or negligence on either side; it also covers lost wages if an employee cannot work due to a work-related injury or illness. If your business has employees who are not independent contractors (such as janitorial staff), then this type of coverage may be necessary for those individuals too—not just those who own businesses themselves!

Create a compliance checklist for the state of North Carolina and for federal tax law.

To help you ensure that your charity is following all applicable laws, we have created a compliance checklist for the state of North Carolina and for federal tax law.

Once you’ve decided on a name, it’s time to create an official nonprofit corporation by filing with the secretary of state.

Starting a nonprofit takes commitment, but it can be very rewarding.

Before you start your nonprofit, it’s important to remember that while starting a nonprofit can be challenging, it also can be very rewarding.

But before you start your nonprofit, there are two things you need to remember:

• You must set goals and make them achievable. If you don’t know where you want to go or what your organization will look like by the end of the year (or three-year plan), how will you know if your efforts are working? It’s important to keep these in mind when planning for success.
• Don’t worry about what other people’s goals are—you’ll never achieve anything if all of your time is spent worrying about others’ accomplishments instead of focusing on yours!

Conclusion

The process of starting a nonprofit in North Carolina is not an easy one, but it can be very rewarding. If you want to make a difference in your community and grow personally as well as professionally, then it may be time to start your own nonprofit!