How Much Does it Cost to Start a Nonprofit?
Can you picture yourself completely immersed in your community?
Connecting local organizations to widen the number of resources available in the name of the public good is no easy feat. And no matter where you are in your dreams to begin a nonprofit, the cost of pulling it off looms overhead until the day you become incorporated. The good news? You’re exactly where you need to be.
Filing fees you should expect to pay
The dream isn’t so distant. And as you sit down with your business plan with a hot cup of coffee, you can begin to visualize the organization you want to build. But before you get there, there are a few tasks to take care of in the interim. Like every business plan, for profit or not, there are always fees associated with establishing your organization.
Articles of incorporation
Incorporating your nonprofit is an essential part of securing your organization's name while limiting liability and building credibility. There are plenty of templates and instruction resources you can find on your prospective state's website. The secretary of state is the person who determines this number, so you can expect to pay anywhere from $50-$400 depending on where you live.
Cost of filing with the IRS
The cost of filing with the Internal Revenue Service of the United States is an investment that you will earn back in no time. Filing with the IRS is the route you’ll take to claim a tax-exempt status. You can expect the user fee for form 1023 to be $600.
If you're likely going to raise under $50,000, you can use the EZ form instead which will cost you around $275. You can request an annual report to determine things like which part of your funding is tax deductible and more when the end of the year approaches.
Legal fees
Your nonprofit will engage with general legal services throughout its lifetime. In the beginning, this might look like hiring an attorney to help you with the start-up process. An attorney can offer support by checking off the boxes and ensuring that your nonprofit remains compliant throughout its birth.
Administrative and operational costs
Like any business, there are plenty of unforeseen costs that accrue as you unfold your master plan. Administrative and operational costs are inescapable. But if you know the costs you’re fielding, and look for them ahead of time, you can have a better understanding of exactly how much your start-up costs may add up to.
Renting out an office space
Your team, staff members, the Board of Directors, or volunteers, will need a place to work. Office spaces are usually the first step to opening your doors. With background checks, security deposits, and first, and last months' rent, you could be looking at a hefty lump upfront.
Employees and payroll cost
As you staff your nonprofit, there are obvious things to take into consideration. The cost of living and the type of work you expect your employees to do are a big part of your success. If you decide to offer health insurance down the road, that’s another expense to take into consideration.
Miscellaneous costs to account for
As you build out your nonprofit organization, you’ll want to broaden the scope and consider other areas that are going to need attention shortly after you officially open.
Creation of a website for your nonprofit
Website creation is an essential part of fundraising, which, for many nonprofits, is their main work form of revenue. Your website is where your future donors may go to collect information about your mission statement and core values, make a donation and fill out paperwork for volunteering, events, and other significant happenings.
Marketing and social media
Your marketing and social media team are your megaphone. From their fingertips, the reach they’ll have as they propel you and your mission forward is a core part of your growth. Branding, Search Engine Optimization, and consistent, uniform, social media posting keeps your supporters across the globe engaged and informed.
Google Ad Grants
Google Ad Grants support nonprofits and their ability to cast their cause and mission to the world around them. Google Ad Grants help connect people looking for a cause to support with the cause itself– and in this case, it’s your nonprofit. If your nonprofit qualifies, you’ll have access to up to $10,000 per month for search ads that will be displayed on Google.com.
The story of Mark Goldsmith's social entrepreneurship
Social entrepreneurs work relentlessly as they draw from past experiences in their work and use those transferable skills to change the world. To learn more about how Mark Goldsmith went from a 35-year business executive to creating one of the most vital and successful nonprofits in New York City, head on over to his website and pick up a copy of his latest book.