Starting and Funding a Nonprofit

Learn what a nonprofit really is: state nonprofit status versus federal tax-exempt status, what 501(c)(3) covers, other exempt groups, why there are no owners, public charities versus private foundations, and why nonprofits can still bring in money and pay people fairly.

Learn the steps to start a nonprofit in order: articles with purpose and dissolution language, bylaws and a board, an EIN and a bank account, Form 1023 or 1023-EZ, the 27-month window, state registration, and fiscal sponsorship as another path.

Learn the real benefits of 501(c)(3) status (no federal income tax, deductible gifts and what's new for 2026, grants and other perks, volunteers) and the trade-offs that come with them: public filings, no candidate endorsements, lobbying limits, and assets that belong to the mission.

Learn where nonprofit money comes from: individual donors, foundation and government grants (SAM.gov, Grants.gov, the single audit), sponsorships versus advertising, events and memberships, earned income, unrelated business income tax, and why the mission has to stay in the driver's seat.

Learn how nonprofits pay people the right way: reasonable compensation, private inurement and private benefit, excess benefit penalty taxes, the three-step rebuttable presumption, the small-organization shortcut, conflict policies, public pay on Form 990, and an example of a board setting a founder's salary.

Learn how a nonprofit stays compliant year after year: disclosures for gifts with something in return, the $250 written-acknowledgment rule, which Form 990 to file, the three-year automatic revocation trap, state filings, restricted gifts, record keeping, and one compliance calendar.

Learn how a nonprofit grows and stays open: stronger grant applications, donors who stay and give monthly, the public support test, an operating reserve, credit and loan options, when to hire, measuring outcomes instead of just activity, and sharing your impact.