How to Start a Nonprofit in North Dakota
Introduction
If you have a cause that you’re passionate about, starting a nonprofit organization can be an excellent way to channel that energy into positive change. Nonprofits are designed to serve the public interest, and they need to be organized in order to receive tax-exempt status. In North Dakota, creating a tax-exempt nonprofit requires certain legal steps. If you follow these five steps, then your new non-profit will be up and running in no time!
Step 1: Choose an Idea for Your Nonprofit
If you’re ready to start a nonprofit, the first step is to choose an idea for your organization. You should pick a purpose that’s relevant to your community and will be sustainable over time—ideally, something that other nonprofits aren’t already doing.
You should also pick an idea that is unique and different from other nonprofits. It’s not enough to do good work; you need to stand out in the crowd! This can be done by offering specialized services or having a unique mission statement (or both!).
Lastly, choosing something you are passionate about will help ensure that all of the hard work involved with running a nonprofit doesn’t become too much of an uphill battle. The last thing anyone wants to do is drag themselves through their days working tirelessly toward an organization they don’t actually care about!
Step 2: Write a North Dakota Nonprofit Business Plan
A North Dakota nonprofit business plan is a written document that outlines your goals, strategies, and how you will achieve them. It’s an important document because it helps get funding from investors or grantmakers. In addition to having this vital information, a business plan also allows you to create a realistic timeline for achieving your goals and gives you a framework for making decisions along the way.
If you don’t have the skills or experience writing a business plan yourself (and most people do not), it’s worth hiring someone who does have these skills and experience to draft one for you. You can find such people online as well; just make sure they have experience working with nonprofit organizations in North Dakota! You should also ask about their fees upfront so there are no surprises later on down the line; most people charge between $100-$1,000 per page depending on their skill level and experience level within this field.
Your business plan should include:
- A mission statement (no more than four sentences) that defines why exactly this organization exists in its current form; what problem(s) does it seek to solve? What impact will it make on society? Why should anyone care about what this organization does?
- A description of what products/services would be offered by this group if all goes according to its current design plans–what kind(s) of work would be done every day/week/year? How many clients do we think we’ll serve each year? How much money do we expect them?
Step 3: Form Your North Dakota Nonprofit Corporation
This is the most important step. Choosing the right name for your nonprofit is vital, as it will help you attract donors and volunteers. Registering with the Secretary of State will give you official recognition as an organization in North Dakota and bring you one step closer to securing 501(c)(3) status with the IRS, which allows you to start soliciting tax-deductible donations.
You also need to decide on a board of directors—people who are willing to dedicate their time and energy towards making this nonprofit successful! Once they’re selected, have them choose a registered agent (a person or firm that acts on behalf of your organization when it’s not around), and apply for tax exemption from the state by filling out IRS Form 1023 or 1024 (depending upon whether or not your filing status is single/married filing jointly), file Articles of Incorporation with the Secretary of State (if applicable), and select an accounting method such as cash basis accounting instead of accrual basis accounting.
Step 4: Apply for Federal Tax Exemption
Once you’ve incorporated, you can apply for federal tax exemption. This means that the IRS will recognize your organization as a 501(c)(3) nonprofit and will not require you to pay income tax on any donations that come in. There are several benefits of being recognized as an exempt organization:
- You don’t have to file annual 990s (the form required by nonprofit organizations).
- You can receive tax-deductible donations from individuals (who must itemize their deductions) and corporations.
- You qualify for certain types of matching grants from the government or foundations based on this status.
Applying for federal tax exemption is fairly straightforward—you just need some basic information about your organization, including its name, address, purpose and activities. It may take up to 60 days before they respond once they approve your application; if they decline it or ask more questions about something, in particular, be sure to respond within 30 days so that they don’t automatically revoke your eligibility!
Step 5: Apply for State Tax Exemption
The state of North Dakota has four forms for you to choose from when applying for tax exemption: ND-100, ND-100EZ, ND-100A and ND-100B.
If your nonprofit is not a religious organization but still qualifies under Internal Revenue Code 501(c)(3) as a charitable organization then you’ll use one of the forms listed below:
- Form ND-100 (PDF) – This form must be completed by all qualifying organizations that wish to receive an exemption from state taxes. It’s due in February every year and must be accompanied by a copy of your IRS determination letter stating that you are exempt under IRC 501(c)(3). The process takes four to six weeks after submission.
Starting a nonprofit organization in North Dakota is similar to the process in most other states.
Starting a nonprofit organization in North Dakota is similar to the process in most other states. The difference is that North Dakota has more stringent requirements for nonprofits to maintain their tax-exempt status. If you are starting a new nonprofit in North Dakota, it is important to understand how this impacts your organization and how you can navigate these added rules.
The IRS requires all 501(c)(3) organizations applying for tax-exempt status to submit Form 1023 and pay an application fee. The form must be completed by an attorney or accountant experienced in nonprofit law—or someone who has had training as an “exemption specialist” from one of several approved educational institutions or workshops—and should include copies of any supporting documents such as articles of incorporation, bylaws or mission statements detailing why your organization exists. You will also need an Employer Identification Number (EIN) from the IRS before submitting Form 1023; this allows them to verify information about donors who may want credit card gifts after receiving federal tax deductions during annual giving campaigns run by charities around Easter each year).
Conclusion
Starting a nonprofit organization in North Dakota is similar to the process in most other states. The first step is to pick an idea for your organization and then write a business plan to help you get started. After that, you need to form your nonprofit corporation so that it can become tax-exempt under federal and state law. Finally, apply for federal tax exemption and state tax exemption so that donors can deduct their contributions from their own taxable income
